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 22million. 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.
1. 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 1.4million inhabitants in 1970 to approximately 22million as of today. Lagos has a population density of about 5000persons/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.
The housing deficit in Lagos State in 2016 stood at about 2.5 million houses according to Mr. Gbolahan Lawal, the Commissioner for Housing, that equaled 14.7% of the country’s total housing deficit according to the National Bureau of Statistics (NBS).
2. 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$33.67billion 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
3. 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 middle-class neighborhood grew an average of 2.8 percent when other segments of the real estate sector declined countrywide. Lagos has the largest share of working population in Africa; over 15.2million of the estimated 22million residents are within the 15 – 64years age bracket.
4. 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 that means that the ‘bush’ you are buying today will become ‘city’ faster than you imagine.
Ibeju Lekki in Lagos is the hottest investment destination in Africa at the moment with investments topping US$200 billion. The Lekki free trade zone (LFTZ) has attracted massive investments within the zone such as Deep Seaport, Dangote Refinery, Lekki International Airport, Golf Courses and Resorts, the 4th Mainland Bridge, the Smart City Project, etc. it has been projected that developments in Ibeju Lekki will provide up to 400,000 jobs on completion, smart investors should position to take advantage of the expected demand for residential and commercial properties in the Ibeju Lekki area.
5. 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 5million was sold for 40million naira nine years later, that is a seven-fold (700%) increase and it is not an isolated case.
6. 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 masterplan. It also means that important projects that drive growth are not sacrificed on the altar of politics.
7. 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 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 – 15years. Study shows that over 75% of property seekers are looking for rental accommodation.
Lagos is like a window to the future. Unlike the rest of Nigeria, Lagos is a great example of what is possible when the government offers energy and other initiatives to its residents.
The population of Lagos is projected to double by 2050 which will make it the 3rd largest city in the world. The growing population will need to be housed therefore real estate investment in Lagos state cannot be any brainier given its estimated 3.2% annual population growth coupled with a 16% urbanization growth rate. Strong and sustained demand for housing means that prices will continue to go up while smart investors will continue to reap handsome returns on their investments.
The best time to buy is yesterday, the next best time is NOW. Prices are never going to come down. Don’t wait to buy Real Estate, buy and wait.