Over 40% of Lagos Homes Owned by Investors Amid Rising Real Estate Demand
Over 40% of residential properties in Lagos are owned by investors, reflecting a surge in real estate speculation, particularly in upscale areas like Ikoyi, Victoria Island, Lekki, and Ikeja.
A recent study highlights this trend, noting: “More than 40 per cent of residential properties in Lagos are held by investors rather than by the occupants themselves. The real estate market in this vibrant city teems with investor activity, particularly in illustrious locales such as Ikoyi, Victoria Island, Lekki, and Ikeja
. These distinguished neighbourhoods have become veritable magnets for developers and investors alike, emblematic of a robust trend towards investment-driven property ownership.” With only 10% of Nigerians able to afford home purchases, according to Central Bank of Nigeria data, this investor dominance underscores a stark affordability gap.
The study explains: “Investors frequently employ instruments such as real estate investment trusts and real estate investment groups to acquire rental properties, thereby circumventing the onerous demands of direct management. Such sophisticated investment mechanisms further illustrate the dominance of investors within the residential property market.” Attractive rental yields of 4.5% to 6% annually continue to draw investors, fueling this trend.
Ocean-view properties, particularly in coastal areas like Lekki and Abijo, command premiums up to 25% higher than inland homes. The report notes: “Consider, for instance, areas such as Ibeju naturally enhance real estate values. Residing in the areas of Lekki and Abijo, renowned for their coastal positions by the ocean, not only affords residents the luxury of mesmerising vistas but also grants access to a lifestyle imbued with an undeniable allure.” This premium reflects strong demand for strategic locations, driving property values upward.
Lagos properties appreciate at an estimated 4% to 6% annually, fueled by infrastructure developments like new roads and bridges. The study states: “Continuous advancements in infrastructure primarily contribute to this steady ascent in value. As new roads, bridges, and public facilities emerge, neighbourhoods become increasingly accessible and desirable, thereby fuelling heightened demand and consequently driving up property values.” In rapidly developing areas, appreciation can reach 10% annually, while established neighborhoods see 3% to 5% growth.
Lagos’s burgeoning population and demand for housing, driven by job opportunities and improved living conditions, sustain this market’s vibrancy. The report adds: “The city magnetically attracts individuals in pursuit of improved employment opportunities and enhanced living conditions, a phenomenon that inherently exerts upward pressure on property values. Even in localities where new developments have yet to be established, the persistent demand serves to uphold a commendable rate of appreciation.”
