“For reasons bordering on improved infrastructure and the crimpling impact of economic downturn which has compelled some individuals, families and corporate institutions to downgrade and change locations, Landed property prices in Lekki is the fastest rising among the prime island locations in Lagos.”- Business Day
But land prices in Banana Island which is the most expensive neighbourhood in Lagos and also in Nigeria as whole, has remained relatively stable over the last two quarters of the year. The reason for this is simple. This island settlement has achieved the peak of its price hike and it is limited in supply while its high values limits demand.
Lekki Phase 1 in general and Admiralty and Freedom Way in particular have benefitted from the reconstruction of both roads with Admiralty Way now being seen as a major commercial thoroughfare. Also the reconstruction of the Lekki-Epe Expressway has led to mass movement of Lagos residents towards that axis, leading to increased demand for land for housing development.
As at the second quarter of this year, while Ikoyi appreciated 31 percent (year-to-date), Banana Island appreciated just 4 percent (YTD), representing at N373,000 (US$1,226), N359,000 (US$1,181) respectively, but Lekki Phase 1 appreciated 34 percent (YTD) within a lower price of N207,000 (US$579).
Munachi Okoye, CEO, MCO Real Estate, notes that the residential market , which is having serious challenges at the upper tier with falling demand and rising vacancy rate, is supported by demand from the middle market segment consisting of primarily terraced houses, town houses and flats priced at between N25 million and N60 million ($82,000 – $198,000). And Lekki benefits from this.
Gbenga Olaniyan, CEO, Estate Links, explains that “a lot of people have downgraded and this is why looking at apartments between Lekki Phase 1 and Chevron, they are occupied. This is because the N3 million to N3.5 million renters in Lekki Phase 1 have move down to this axis to pay N2 million rent”.
He cited a company that relocated from an apartment in Ikoyi where it was paying $70,000 per annum to a flat where it is now paying just N6 million per annum. “What they have done is to leave a more luxurious property to another that is cheaper”, he said in an interview.
Presently, in the housing market, what people are looking at, over and above facilities, is security. Once there is security with generator to give light and pump water, the house is good to go. By this, the definition of luxury flat has changed a bit.
Source: Busness Day