Maryland, Ogudu GRA top growth areas on Lagos Mainland housing market with 20% price rise

Maryland, an upper-middle class settlement, and Obudu GRA, a sleepy and relatively urbane settlement, are among top growth areas in the Lagos Mainland housing market where, despite the slowdown in the economy, demand for housing remains high with price rising 20 percent by the first quarter of this year.

The property market in Lagos, Nigeria’s largest commercial city, is almost always a tale of two twists with both price and demand rising on the mainland while supply and price are falling on the island.

Though some market players differ on the argument on price fall and over-supply on the island, insisting that the island market remains strong with rising demand, especially for apartments. Close market watchers say part of the Lagos market is struggling in tune with the macro-economy.

“The argument for supply exceeding demand is unfounded because luxury apartments are in high demand. Poorly finished buildings with exorbitant prices constitute the pile of empty apartments constantly littering highbrow areas,” says Sijibomi Ogundele, MD/CEO, Sujimoto Construction Limited.

But Omorotimi Akinlose, CEO, Residential Auction Company (RAC), reveals that by the last quarter (Q4) of 2015, up to the first quarter (Q1) of 2016, average asking prices on Lagos Mainland rose by 20 percent and fell by as much as 25 percent on Lagos Island.

“The average asking price for a four-bedroom family house on Lagos Mainland is now estimated at N73,790,072 while the average asking price for a similar property on Lagos Island is N182,236,111,” he says  in his company’s Lagos House Price Index and 2016 Outlook Report released recently.

The report explains that the increase in growth on the mainland does not come as a surprise, as supply of housing units into the market is low and there has been an increased demand for properties from potential house buyers, listing some other fastest growth areas where asking prices on houses have increased over the course of a year as Ikeja, Magodo Phase 2 GRA, Omole, and Ilupeju.

For the Lagos Island market, the report notes, it is a different story, pointing out that the areas with the sharpest fall in asking prices in this market are seen in Victoria Island and Ikoyi where prices dropped by 37 percent and 20 percent respectively within the period under review.

“Lekki Phase 1 also saw a decline in prices by 17 percent and as earlier said, this segment of the market is highly vulnerable to factors affecting the macro-economy such as the rapid deterioration of the naira to the dollars and the changes taking place within”, the report says.

The outlook for the global economy does not excite much hope and Akinlose notes that with Nigeria set for another gloomy year and recession looms upon the already fragile economy due to falling global oil price and the weakening naira, the country’s economy is in for another tough year.

“All sectors of the economy will be severely affected as there will be a high shortage of cash in circulation. Our take on this is that although supply of housing units in the market will remain unchanged, there will be less demand from buyers which will ultimately bring a fall, not a crash, in average asking prices across all markets”, he posited.