Lagos
is regarded as the hub of the real estate business in Nigeria. The majority of
activities happening in the sector are in Lagos. There are few places in Lagos
where properties, especially land are on the high side in terms of
patronage.
Lagos
which means Lakes is one of the 36 states in Nigeria. Though with the smallest
landmass of 1,171.28 km.sq, Lagos is the most populous city in Nigeria with a
population estimate of 22 million. Popularly known as Eko City, Lagos remained
the commercial capital of Nigeria after the Administrative capital was moved to
Abuja in 1991. Why invest in Lagos Real estate…
Ever
Growing Population
Population
no doubt is a major growth driver for the real estate sector, Lagos is the
smallest but most populous state in Nigeria. Lagos has grown from just 1.4
million inhabitants in 1970 to approximately 22 million as of today. Lagos has
a population density of about 5000 persons/Sq.km making it one of the most
densely populated cities in Africa. It has been estimated that about 86 persons
migrate to Lagos every hour, that is more than 2000 persons every day and close
to a million persons every year. This is obviously a big advantage for the real
estate business.
LAGOS
REAL ESTATE
The
housing deficit in Lagos State in 2016 stood at about 2.5 million houses
according to real estate experts and that equalled 14.7% of the country’s total
housing deficit according to the National Bureau of Statistics (NBS).
ECONOMIC
AND INDUSTRIAL HUB OF NIGERIA
Abuja
may have displaced Lagos as the administrative capital of Nigeria, but Lagos
remains the commercial capital of Nigeria.
Lagos
is the richest state in Nigeria with a GDP of about US$33.67 billion accounting
25% of Nigeria’s total GDP. It is the 5th largest economy in Africa and home to
over 2000 manufacturing companies, 200 financial institutions and has the
largest clusters of small and medium scale enterprises in Africa. Lagos
consumes more than 50% of the country’s energy, accounts for over 90% of
Nigeria’s foreign trade flow and 80% of all Nigerian imports are handled by
Lagos ports.
Market
research shows that Lagos State has the highest property values and the most
vibrant real estate market in Nigeria.
GROWING
MIDDLE-CLASS POPULATION
Lagos
vibrant economy has led to a growing middle-class population with money to
spend on luxuries and decent accommodation. The middle segment of the housing
market remained robust despite the economic headwinds experienced by every
other sector of the Nigerian economy and this has been attributed to strong
demand from the middle class. Prices in the Lekki axis which is largely the middle-class neighbourhood grew an average of 2.8 percent when other segments of
the real estate sector declined countrywide. Lagos has the largest share of the working population in Africa; over 15.2 million of the estimated 22 million
residents are within the 15 – 64 years age bracket.
FAST
URBAN GROWTH AND DEVELOPMENT
With
a 16 percent urbanization rate, Lagos is one of the fastest-growing megacities
in the world. Lagos has attained the megacity status, which means that the
‘bush’ you are buying today will become ‘city’ faster than you imagine.
FAST
APPRECIATING PROPERTY PRICES
Lagos
is a dream destination for real estate investments because of the high rate of
returns on investments. The Market Analysis for Lagos State shows one of the
highest property values in Nigeria. The Lagos property market especially the
mid-market segments remained buoyant when property prices in states across the
country took a haircut from the recent economic recession. A piece of land that
was purchased around 2006 in Lekki for 5 million was sold for 40 million naira
nine years later, that is a seven-fold (700%) increase and it is not an
isolated case.
STABLE
POLITICAL ENVIRONMENT
Lagos
has the most stable political environment when compared to other states in
Nigeria. Since the return of democracy in 1999 Lagos has been under the control
of the same political party and this ensures a continuum in governance, this is
good for the real estate market because projects and developments are
implemented according to the master plan. It also means that important projects
that drive growths are not sacrificed on the altar of politics.
STRONG
RENTAL MARKET
Rising
property and rental prices are a reflection of the huge supply-demand gap of
affordable housing in Lagos. There are more renters than owners in the Lagos
property market due to the high cost of homeownership coupled with a very
underdeveloped mortgage market. The mortgage market is very small and
unaffordable with rates ranging from 16 – 30% and tenors between 1 – 15 years.
Study shows that over 75% of property seekers are looking for rental
accommodation. Some of the factors that we also need to mention that influence
Lagos real estate includes The Dangote refinery which would be of advantage to
many investors coming. Another valid point is the advantage of Seaview in most
of the estates in Lagos. The likes of Banana Island estate, Atlantic city
attract more investors because of this factor.
The
most attractive factor now is the new policy of the government of the state.
The allocation of land. Once you buy land in Lagos State now, it must be
allocated and that would authenticate your land. It used to be excision during
the Ambode government but it's now allocation. Once you pay for the allocation,
and you are allocated, you are guaranteed the owner of the property in
question.
–ISAAC
ABIMBADE
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