Despite rising inflation and the Naira’s depreciation against the dollar, real estate professionals believe that there is no better time to invest in the Lagos property market than now.
Their recommendations are based on rising land values and property prices throughout the Lagos market, particularly in the Lekki-Epe and Lekki Free Trade Zone (LFTZ) areas.
They pointed out that rising inflation has increased the appeal of real estate as an asset class to investors in this corridor looking to hedge against inflation while still earning decent rates.
This attraction, according to them, has resulted in the rise of investments in housing and landed properties.
Findings by the Nigerian Tribune revealed that due to the increase in land’s values in Lekki FTZ and environs, many developers in the axis have commenced upward review of prices of their plots in the neighbourhood.
For example, the developer of Alaro City, a massive real estate development by Rendezvous, has commenced upward review of residential plots in the new city.
Going by the new price, plots of land in Alaro city within the low density area now costs $121 per square metre (sqm); plots within medium density cost $135 per sqm; while plots within high density cost $150 per sqm respectively.
According to the company in one of its e-sale’s fliers, this was in response to the space of infrastructure rolled out within the Lekki FTZ and pace of development in the city.
The upward review of prices of plots of land affects residential plots while commercial and industrial plots remain at previous pricings.
Also, consensus survey carried out on rental and sales’ values of residential and commercial properties by members of Lagos’ branch of the Nigerian Institution of Estate Surveyors and Valuers (NIESV) in 2020, showed that land and house prices in Lekki Phase 1, Ikate, Osapa, Agungi & Chevron, Ajah, Sangotedo, Awoyaya and Lakowe on the Lekki–Epe corridor have kept increasing in values as they welcomed more development.
Immediate Past Chairman, Lagos branch of the Nigerian Institution of Estate Surveyors and Valuers,Mr. Dotun Bamgbola, explained that increasing housing and commercial retail real estate’s prices in recent times were due to population growth, inflation, and the need for trade, sometimes as a second business.
In addition, he said that the exchange rate of the Naira to major global currencies also played a major role as property owner benchmarked their returns with the Dollar and Euros in particular.
“There is also the investment of Nigerians in the diaspora in Lagos.”These are keys factors for increase in land and property values Q4 2021 till now,” he said.
Bamgbola advised would-be investors to buy property now so that they would be able to own one at a reachable price.
“You may not get your property of choice at a lower value in the market than now. As the Naira depreciates against major global currencies and inflation is not reversed quickly, property prices will remain on the upward swing.” he said.
Justifying reasons for the rise in land’s values, Mr Richard Olodu, categorised people buying land into local people and Nigerians in diaspora.
He explained that despite the scarcity of money in the country, some Nigerians still get money while some diaspora Nigerians repatriated money to Nigeria for investment including real estate.
”In 2021, the amount of money repatriated by Nigerians was greater than the revenue from oil. Since property is a basic need, people will be keen in investing in it except in the period of war,” he said.
Besides, he noted a lot of corrupt Nigerians have found property investment as an easy haven.
Olodu pointed out that property investment wasn’t volatile as other non-land-based investment, saying that people found it easier to manage, hence rise in the prices of land.
“Property investment has been appreciating in Nigeria and people see Lekki to be nearness to commercial zones and public infrastructure provision.
“Property investment is a branch of economics. It increases as population increases. The population of youths in Nigeria is still increasing and naturally, these youths and other non-served Nigerians will aspire to get his or her own piece of the world.”
“Property investment is in the same category as precious stones like gold and diamond. It is the simplest investment to forecast and speculate in.
“Unprofessional property investors follow bandwagon effect. A lot of property investors in Lekki and Epe axis,” he said.
Olodu warned that Nigerians should not be concerned with the appreciation alone, but the rate of appreciation compared with other markets.
“What is the rate of appreciation of property investments and rate of appreciation of shares bonds and savings in banks and insurance companies? What is the rate of appreciation of property in the subject area and property investment in Mowe, Shimawa and Abuja? “
According to him, property investment in Nigeria’s property markets as a whole has not been competing favourably with other property markets like Cape Town, Tunisia, Casablanca, Accra and Cape Verde (Praia).
Olodu advised that individual investors should contact estate surveyors and valuers who are knowledgeable in property investment’s analysis, while urging institutional property’s investors to invest in property outlook from specialised property investment forecasters.
Executive Secretary of AHCN, Mr Toye Eniola, described land as a fixed asset that its measure of value doesn’t decrease but appreciate in value.
According to him, because land is becoming limited, it’s becoming more competitive to get aside the fact that Lekki-Epe axis has become a choice area.
“Moreover, the axis is a new developing economic and industrial hub of the nation and with the like of Dangote refinery coming on the stream shortly and the proposed international airport along that corridor, the value of land will naturally jump up astronomically, “he said.
He enjoined any smart investor to key in now and reap the benefits tomorrow, saying the entire axis would soon experience sudden development and that vacant land would soon become so scarce. This development, he said would further trigger skyrocketing land values in the axis.
Tribune
