Why is property expensive in Lagos? Have you ever been involved in a conversation around this question?
If you have, then you are not alone as the rising cost of property in Lagos has remained a topical issue in Lagos over the years.
What makes this topic even more crucial is the accommodation need of the constantly rising population of residents in the state.
The population of Lagos in 1991 was 5 million. However, Lagos population currently stands at a staggering 21 million.
Below are 5 reasons property in Lagos remains largely expensive:
Non-Nigerian buyers
The Nigerian real estate market has apparently felt the direct impact of money from rich foreigners who buy property in the country. A good chunk of this money comes mostly from rich Asians, Lebanese and Indians.
The acquisition of these properties is usually for both residential and commercial use.
Toyin Street situated in Ikeja in Lagos is a good example of this with Asians acquiring a property in 2016 to open a supermarket for the sale of most seafood.
There are several examples of this all around Ikeja, Lekki, and Ikoyi.
On this trend, Lagos has become similar to what many have christened the Pacific Rim ‘gateway cities.’ Such cities include Hong Kong, Singapore, London and Sydney.
The market in these cities is propelled by other things beyond just owner-occupiers. This is not just for new immigrants but investors. These investors include offshore investors.
Lagos is a grand example of how much globalisation can affect the local housing market.
Did you know that one of the biggest things that contribute to the surging cost of property in Lagos is the fact that the foreigners who buy these houses not only come into the country with huge wealth? Strangely, they continue to make a lot of money here in Nigeria.
While some of these foreign property owners live and run their properties here in Nigeria, we have those who are ‘circulatory migrants;’ there are foreigners who invest in property in Nigeria but work offshore.
A few people have argued that the wealthy foreigners only buy and invest in luxury houses. They maintain that such houses and the people who buy them do not impact prices or the districts where ‘regular’ Nigerians buy their homes.
However, what has happened over the years is a ‘trickling down effect’ that happens when wealthy immigrants influence the cost of property to become expensive
Inconsistent regulation
As people continue to troop into Lagos, the same has happened to the real estate industry in Lagos.
A typical search on Vconnect for real estate agents in Lagos turns up a total of 13,796 property agents.
A similar search on Businesslist came up with 853 companies in total and of course, there are thousands of others.
What this basically means is that the anomalies, rising cost of property and the expansion the real estate industry are born out of inconsistent regulation and failure of industry stakeholders to raise the bar.
We believe that one of the ways to guarantee public protection is to have raised the existing standards required to get a license as a real estate agent.
Lagos is a commercial hub
Nigeria has 36 states but Lagos stands out as the city with the most expensive neighbourhoods to live in.
A good point in reference is Banana Island in Lagos, which was ranked by wealth and finance magazine, Forbes as being the most expensive neighbourhood in Nigeria.
The sheer population of Lagos State and the level of commercial activity it plays host to have fused to form an alliance that has driven up the cost of property in the state.
The transformation of Lagos into a mega city has also seen properties within the state remain expensive with a strong inclination to rise even higher in the future.
Status symbol
Despite not being the capital city of Nigeria, Lagos State has over the years, become synonymous to phrases like ‘expensive urban real estate’ and popularly known as the centre of excellence.
Also, be reminded that Lagos State was once the capital city before Abuja became the capital city.
Lagos currently host the headquarters of most top notch businesses and organisations in Nigeria; a fact that drives up the prestige attached to the state and its residents.
The state’s entertainment industry remains one of the largest in Africa with its movie industry, Nollywood remaining one of the biggest in the world.
According to Al Jazeera, Nollywood is the second biggest producer of films in the world and is now priced at $5 billion.
Nollywood makes more films than Hollywood in the U.S, but less than the largest film industry, India’s Bollywood.
These are just a few of the factors that give Lagos a personality that has held and sustained the attention of the rich and powerful over the years.
Ways to get the best property deals in Lagos
There is no disputing the fact that properties are expensive in Lagos but there are ways to get the best deals off properties in Lagos.
Below are a few ways to work around getting less expensive deals within the Lagos Metropolis:
Keep an eye on repossessed property
In a lot of cases, people will fail in paying the mortgage. When this happens, the house is repossessed by the lender, which in many cases, is the bank.
Banks being what they are, are most interested in lending money and less in managing a property.
The moment the occupant of the house is evicted, the lender will most likely list the property for sale with good discount.
The truth is that properties of this kind offer some of the best deals in the real estate market. So, keep an eye out for them.
Old property listings
Another way to get great deals in Lagos is to be on the lookout for properties that have been listed on the market for quite some time.
With houses like this, you would find the owners more willing to sell at a discount as they are most likely be more eager to get it off their hands once and for all.
Go after absentee owners
Absentee owners are people who own houses but do not live in it for several possible reasons.
They might include homeowners who inherited the house of owners who simply do not want to live in the property with tenants. In this case, the owner of the property might be fed up with the headache of dealing with difficult tenants and might be convinced to sell the property.
One question…
From your personal experience, why are properties expensive in Lagos?
