By Esther Agbo

Lagos State Commissioner for Housing, Honourable Moruf Akinderu-Fatai has said that the state faces a significant housing shortfall, with an estimated gap of 2.3 million homes.

This revelation was made at the Stanbic IBTC Home Ownership Summit, held on Tuesday where the Commissioner was represented by the Permanent Secretary of the Lagos State Ministry of Housing, Engineer Abdulhafiz Gbolahan Toriola.

The summit emphasised the urgent need for collaborative efforts from both the public and private sectors to address the housing deficit and foster home ownership as a pillar of economic stability in Lagos.

During his keynote address, Engineer Toriola underscored the escalating demand for housing in Lagos and the consequent business opportunities in the sector.

“In Lagos, the demand for housing is ever-increasing, and the importance of facilitating home ownership cannot be overemphasised, considering the 2.3 million housing gap that requires strategic attention from governments across board and stakeholders across the value chain,” he said.

The Lagos State government has made strides to address this deficit, delivering over 10,000 flats across 39 state-owned estates, with ongoing projects expected to add nearly 2,000 more units.

“In bridging this gap, the state government via direct intervention has delivered 39 estates across the state, amounting to 10,060 flats, with ongoing projects adding approximately 1,938 more flats.

“Lagos State has launched multiple affordable housing schemes to cater to people with different incomes, we have the low, medium, and high. The Ministry of Housing takes care of the low and medium, while the LSDPC takes care of the high.

“The program aims to provide housing at subsidised rates and enables more Lagosians to enter the property market. It includes the allocation of 40 per cent rebate for civil servants. There is the open balloting for private workers where people apply online,” Toriola noted.

The summit, themed “Building Wealth through Home Ownership,” also featured insights from the Chief Executive of Stanbic IBTC Bank, Mr. Wole Adeniyi.

Adeniyi highlighted the critical role of home ownership in financial stability and wealth creation. He said, “As access to affordable housing remains a pressing issue, our Home Loan solution offers hope. With competitive interest rates, flexible equity contribution, and personalised guidance, our bank aims to bridge the gap and make home ownership attainable for our stakeholders.”

Additionally, Prince Adeniyi Aromolaran, an Executive Director with the Lagos State Development and Property Corporation (LSDPC), proposed home ownership as a strategic approach to staff retention. “I have proposed this as a staff retention strategy. To hold a staff for five years is now very tough, but if a company were to acquire a property and say, we want to build for our staff at this level.”

“The land belongs to the organisation, but we give the apartments to individuals. If you work with us for five years, we tell you from the get-go, an amount is set every year, so that by your fifth year, when you celebrate long service award, we give you a certain amount towards house ownership,” he said.

By Esther Agbo

Lagos has witnessed significant shifts in its real estate market over the past few years, driven by economic, demographic, and infrastructural factors. Known for its vibrant economy and status as a major business hub, Lagos continues to attract local and international investors, leading to a generally upward trend in property prices.

The real estate sector in Nigeria is forecast to grow to $2.26 trillion in 2024, of which residential estate will contribute $1.93 trillion or 85.4 percent. Analysts who made the forecast observed that the growth would occur despite challenges such as a weakening currency, inadequate infrastructure, multiple taxes, high construction costs, and other issues affecting the sector.

Lagos real estate market has mirrored the city’s economic health. During periods of economic prosperity, particularly when Nigeria’s oil sector flourished, the city experienced a substantial rise in real estate prices. High demand for both commercial and residential properties, fueled by the influx of businesses and individuals seeking opportunities, drove these price increases.

However, during economic downturns, such as times of political instability or global economic recessions, the market showed resilience, although the growth rate slowed. Lagos’ ability to recover quickly compared to other regions in Nigeria can be attributed to the constant demand for housing and commercial spaces in the ever-expanding city.

Comparing current real estate prices to those a decade ago reveals a significant increase. This rise is due to inflation, higher construction costs, and the growing demand for properties in a city experiencing rapid population growth and economic expansion. Currently, the real estate prices in Lagos show either stability or moderate increases, varying across different parts of the city and types of properties.

According to a recent report by the Nigerian Institution of Estate Surveyors and Valuers (NIESV), property prices in Lagos have seen a significant uptick in 2024. The surge is most prominent in high-demand areas such as Victoria Island, Ikoyi, and Lekki, where prices for prime residential properties have increased by an average of 15 per cent compared to the previous year. This rise is attributed to the influx of expatriates and affluent Nigerians seeking luxurious accommodations, coupled with limited land availability in these prestigious locales.

On the other hand, the burgeoning middle-class population is driving demand in emerging neighbourhoods like Yaba, Surulere, and Ajah. These areas are experiencing rapid development, with new housing projects aimed at providing more affordable options for middle-income earners. According to data from the Lagos State Ministry of Housing, housing units in these regions have appreciated by approximately 10 percent in the past year. This trend is expected to continue as developers focus on constructing more budget-friendly housing to meet the needs of a growing urban population.

Prime locations like Victoria Island, Ikoyi, and Lekki, known for their better infrastructure, security, and amenities, have seen the highest growth in prices. These areas attract wealthier individuals and businesses, pushing property values upwards. Meanwhile, the city’s rapid urbanisation and appeal as an economic powerhouse have increased demand for housing in the middle and lower market segments. Unfortunately, the supply of affordable housing has not kept pace, leading to a significant housing deficit and further driving up prices.

Several key factors contribute to these trends, including Lagos economic growth, infrastructural improvements, and its position as a cultural and financial centre. Additionally, speculative real estate investments, where properties are bought with the expectation of selling them at higher prices, also play a role in the rising prices.

Despite the positive trends, the Lagos real estate market is not without its hurdles. Industry experts highlight the ongoing issues of high construction costs, exacerbated by inflation and the devaluation of the Naira. Additionally, multiple taxation and bureaucratic red tape continue to pose significant challenges for developers and investors. The Lagos State Government has been urged to streamline regulatory processes and provide incentives to attract more investment into the housing sector. Addressing these challenges is crucial for sustaining the market’s growth momentum.

Looking ahead, the outlook for the Lagos real estate market in 2024 remains cautiously optimistic. While the sector faces substantial obstacles, the underlying demand for housing, driven by population growth and urbanisation, provides a strong foundation for future expansion.

Analysts suggest that strategic investments in infrastructure and supportive government policies could further enhance the market’s potential as Lagos real estate market is poised for further growth, driven by ongoing infrastructural developments such as the Eko Atlantic City project, road expansions, and improvements in public transportation. These projects are likely to make certain areas more accessible and desirable, increasing property values.

Moreover, continued economic growth, especially in sectors like technology, finance, and entertainment, is expected to attract more businesses and professionals, boosting housing demand.

Be that as it may, several factors could temper this growth, ranging from economic downturns, political instability, or significant policy changes affecting the real estate sector could reduce demand and prices. Environmental challenges, such as increased flooding or natural disasters, could also negatively impact property values in affected areas.

In conclusion, while Lagos real estate market shows a robust upward trend, driven by economic and demographic factors, it remains sensitive to economic conditions and infrastructural developments. The city’s resilience and continuous demand for property suggest a promising outlook, notwithstanding the potential challenges that could impact future growth.

By Esther Agbo

Lagos is no doubt one of the bustling commercial states in Nigeria and it stands as a beacon of opportunity for real estate investors. Its dynamic market is deeply entwined with the broader economic and political landscape of Nigeria, a nation characterised by its oil wealth, economic volatility, and evolving policies. As we navigate through 2024, the Lagos real estate sector presents a compelling mix of promise and challenge.

Nigeria’s economy has seen its fair share of ups and downs. While oil remains a significant contributor, it’s not the sole driver. Lagos, with its diversified economy encompassing finance, services, and tourism, offers a unique stability. Despite facing hurdles like inflation and currency devaluation, the city continues to attract substantial investments, buoyed by its status as a major financial center in Africa.

Lagos’s real estate market has demonstrated remarkable resilience. From the luxury enclaves of Ikoyi and Victoria Island to more affordable neighborhoods, the city caters to a broad spectrum of housing needs.

However, a pronounced gap exists between supply and demand. The rapid urbanization of Lagos has exacerbated a housing deficit, pushing property prices upward. Efforts by successive governments to bridge this gap have met with mixed results, although recent initiatives aim to make housing more accessible for lower-income residents.

Significant infrastructural projects, such as the Lekki-Epe Expressway, have spurred real estate development, boosting property values in newly accessible areas.

Concurrently, regulatory reforms are making strides towards a more transparent market. Enhanced property documentation and efficient land registration systems are part of this drive, aiming to reduce fraud and streamline transactions.

For investors, Lagos remains a hotspot. High-end areas like Ikoyi and Lekki continue to draw interest, while emerging neighborhoods offer new opportunities. The city’s rapid growth and economic diversity promise high returns.

However, navigating the complex legal and regulatory landscape can be daunting. Foreign investors, in particular, should seek local legal counsel to ensure compliance and gain deeper market insights.

Looking ahead, Lagos’s real estate market is set to benefit from ongoing and planned infrastructure projects. Road expansions, bridge constructions, and improved public transportation are expected to enhance accessibility, making new areas ripe for development. Additionally, efforts to bolster essential services like power supply will further boost the city’s livability and attractiveness.

Investors must tread carefully. Political instability, shifting economic policies, and legal complexities pose significant risks. Environmental challenges, including coastal erosion and flooding, particularly in low-lying areas, are also critical concerns.

The forecast for Lagos’s real estate market in 2024 is cautiously optimistic. While the city’s rapid urbanization and economic diversification provide a solid foundation for growth, the inherent risks cannot be overlooked. Potential downturns could see a decline in property demand and values, and liquidity issues may arise during economic slumps.

Ultimately, Lagos offers substantial opportunities for savvy investors willing to navigate its complexities. With informed strategies and a keen eye on evolving market dynamics, the real estate sector in this vibrant city can yield significant rewards.

For those looking to invest in Lagos, the key lies in balancing optimism with caution, leveraging local expertise, and staying abreast of policy changes and infrastructural developments.

As Lagos continues to evolve, so too will its real estate market, promising a landscape rich with potential for those ready to embrace its challenges and opportunities.