Lagos State Government requires circa ₦3.5 trillion to deliver one million housing units annually in line with the Government’s desire. If the State’s 2018 budget for capital expenditure is fully devoted for housing, it will only be able to cover less than 10% of the State’s annual housing requirement. Thus, an estimated 19 years of similar expenditure will be required to bridge the current housing deficit, estimated at 2.5 million housing units. Going forward, Agusto & Co. believes that Cargotecture innovations in housing may be a solution to the rising housing deficit in Lagos, especially for low-income residential real estates, as this solution combines, low cost, speed and environmental friendliness.
As at end of March 2018, Yaba had the highest rental yields in the mid-income residential segment, thus showing steady appreciation in rental yields. Whereas, Apapa (besmirched by major traffic gridlock caused by indiscriminate parking of trucks on major roads) had the lowest annual rental yield of 3.1% as at end of March 2018, evidencing weak demand for residential housing as well as decline in real estate values.
With the Nigerian economy rising out of recession in the second quarter of 2017, we expect continued improvements in the near term regarding new residential real estate developments mainly in the mid-income segment as well as mixed-use developments, as we believe developers will start construction of some erstwhile abandoned residential projects and new developments especially in the mixed-use segment.
This report provides information on the Lagos Residential Real Estate Market (‘the Industry’) and covers the following:
Information that the Report Provides