Insights on the Nigerian Luxury Real Estate Market
Global Overview
As the world around us continues to evolve, different macro and micro factors are beginning to shift what the term luxurious home ownership means to high-net-worth individuals (HNWIs) across a wide and diversified spectrum. It has gone beyond just paying a premium to reflect other needs to be fulfilled.
Luxury doesn’t necessarily mean bigger houses as some buyers prioritize privacy and security, preferring homes that require minimal upkeep, while for others, luxury is being energy efficient or a preference for smart automation involving the use of the Internet of Things (IoT) to control lighting, temperature and home ambiance.
According to the Luxury Defined 2018 report, there was robust growth in sales of luxury residential properties across most geographical markets in 2017 and early 2018. This growth was contributed by a strong stock market, a stable global economy, low-interest rates, and rising consumer confidence in the luxury residential real estate markets.
The Knight Frank Prime International Residential Index ranked Manila, Philippines as the top-performing luxury residential market as home prices increased by 11% between 2017–2018. A lack of supply in property developments and an increase in economic stability are some of the factors contributing to the increased interest in the purchase of real estate properties by expatriates.
Africa
Despite domestic macroeconomic instability, and political and regulatory uncertainty, Africa’s average Gross Domestic Product (GDP) rose from 3.5% in 2018 to 4.0% in 2019 and is projected to reach 4.1% in 2020 [3]. This growth has spurned interest in long-term investments from international investors looking for opportunities within the region especially in real estate investment and development.
From huge money deals to strong industry partnerships, the launch of modern technology, and reformed regulations, Africa’s real estate market has evolved over the past years.
Here are some of the highlights from 2019:
- Everty acquired Cornerstone Tower, Nigeria from African Capital Alliance (ACA) at a gross USD IRR of 25.6% after its completion in April 2019.
- Broll Property Group secured the property management contract to manage Actis property across 5 African countries which include; Mozambique, Nigeria, Ghana, Kenya & Cameroun
- The Nigerian Housing Fund (NHF) bill was passed into law to repeal the National Housing Fund Act of 1992.
Nigeria
As the country emerges from the economic recession of 2016–2017, the real estate sector has witnessed positive growth in development and investment. Being the commercial nerve of the country, Lagos has the largest number of ongoing real estate developments in terms of investment funding.
The luxury residential market in Nigeria is regarded as one of the most expensive in Africa. According to a Property report, In H2 2018, there was a significant increase in the prices of properties in Lagos especially in prime areas — Old Ikoyi and Victoria Island which grew by 20% and 11.3% YoY respectively. The average price of a 3 -5 bedroom apartment in Ikoyi was between $388,906 and $972,266.
Huge demand for real estate from the Nigerians in the diaspora has partly fueled the surge in prices, which is expected to increase in 2020. Real estate development companies are designing more products specifically to attract direct diaspora investment.
The real estate market in Nigeria is physically growing as there are about 5 large-scale city constructions ongoing with 3 alone in Lagos prime areas — Alaro City, Eko Atlantic & Orange Island.
Eko Atlantic
Eko Atlantic is a new coastal city being built on Victoria Island adjacent to Lagos, Nigeria, to solve the chronic shortage of real estate in the world’s fastest-growing megacity. It is a focal point for investors capitalizing on rich development growth based on massive demand — and a gateway to emerging markets of the continent. The city is poised to unlock the growth potential for property development and future investment
Eko Atlantic offers all the comforts and convenience of a 21st-century city, designed by leading international experts and supported by modern and efficient infrastructural facilities.
Available apartments within the city offer a wide variety of choices from entry-level apartments to ultra-high-end developments. Residents in the city are already enjoying oceanfront views, broad canals, and attractive promenades.
Eko Pearl Towers
Eko Pearl Towers is a condominium-style residential development comprising 5 high-rise towers, offering 2 and 3-bedroom apartments as well as penthouse-type apartments. Each tower has its own identity and color, highlighting the slight difference in their design and outer structure, yet preserving the same state-of-the-art infrastructure and luxurious touch.
References
[1] https://luxurydefined.christiesrealestate.com/hubfs/CIREWhitePaper2018_FinalDigital2018.pdf
Editor’s Note: The article was initially written for Newhomes.ng Luxury Housing Report.
It was originally written as far back as 2019 meaning a lot of changes have occurred since then and the information stated might not be relevant as before.
