The year 2021 holds a lot more promise and hope for millions across the globe in view of the pandemic currently putting everyone under tremendous pressure. This bated hope is connected to the emergence of a vaccine(currently being tested) that has brought relief of an end in sight, albeit with a lot of caution on the populace. However, this development has in no way altered the world’s trade as it has equally thrown Elon Musk as the biggest billionaire on planet earth.
The real estate sector has seen new innovations from more smart homes being adopted, energy efficiency designs, recyclable building components etc. In Nigeria,a lot more policies are being rolled out to solve the housing deficits and the positioning of the industry to tap into the AFCTA which implementation will largely be beneficial to the commercial rea estate sector. Despite the contraction of the economy in Q4 2020,the real estate sector kept an upward swing in terms of construction and FDI(Foreign Direct Investment) which has seen more foreign inflows that has kept the momentum upwards for construction and developers alike.
The city of Lagos being the economic powerhouse of the country kept the momentum all through 2020 and this is x-rayed by the Mckinsey report on household distribution using different variables. The report largely buttresses the emergence of a middle class that is evolving and might remain same for years to come. This development creates opportunities for real estate developers/development that aligns to meet with realities in the different parts that make up the city of Lagos. Real estate developers might want to position to meet the housing needs of a ballooning population that is largely influenced by migration of people to the city center in search of opportunities. The presence of supporting infrastructure within the clusters as analyzed in the Mckinsey report is an incentive to investors or developers to position for capital gains on property development.
A mid-sized flat in Surulere or Shomolu hovers between N400,000-N700,000 depending on type of property. As observed by this reporter, there is more demand than supply in locations like Surulere,Shomolu,Kosofe,Lagos Mainland for more mid-sized apartments and this is connected to presence of good road networks, relative power supply, malls, cinemas etc. The island section of the Lagos real estate market tilts more to having estate clusters with the upper middle class strategically setting new trends to reflect their status.
Property investment within the rental space will sure witness more demand in the Lagos Mainland and outwards which for the most part will see old structures give way to new development to meet the yearnings of propsects. The new fad of home ownership using development lease is gaining momentum and will continue to see the need for that especially in view of capital appreciation with a percent basis of 25-40% well above the inflationary rate.
The Lagos Island section particularly from Ajah to Ibeju Lekki will continue to witness more developments and the speculative nature of property holdings. This will keep the values of property holdings on an upward swing as more people will continually use this as a bargain tool to hedge for their investment appetite.
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