Earlier this year, Nigeria’s commercial capital, Lagos, launched a mortgage scheme for first time buyers that opened up business opportunities for property developers while aggressively moving into the housing market for the middle to lower end of the sector.
A recent report by the real estate agency found that despite Nigeria’s reform challenges and security issues, the country saw increased levels of foreign direct investments reaching a record 5.2 billion US dollars.
“There’s definitely been a demand for high-end office space, quite a lot of entrants into the market, General Electric have come in and they are looking at the top end of the market,” Dipo Davies, CEO Real House Communications told CNBC Africa.
According to the National Bureau of Statistics, the real estate sector contributed 8.01 per cent of Nigeria’s rebased economy notwithstanding major limitations such as the challenging Land Use Act as well as difficulty in getting permits and certificates of occupancy in many states.
“What you see is a reflection of the Nigerian economy. The top end is doing quite well and their issues are whether it is trickling down to the middle class and to the poor in the economy,” he said.
A recent report showed that an impressive 24 billion naira, via foreign direct investment, came into the luxury end of the real estate market for the development of a 750-unit high end housing estate in Port Harcourt, Rivers State which is expected to deliver luxury villas or duplexes, town house and luxury two and three bedroom apartment.
(READ MORE: The rise of luxury living in Lagos)
“To a certain extent there is some demand at the high-end of the market. The question is an issue of supply. If this development flies and several are attracted to that market because of it, then it will be difficult to see if there are enough deep pockets to pick up such units,” he explained.
“I think the demand is approaching about 17 million. The houses that Lagos state have built so far are about 3,000 up to 4,000 so in terms of making any impact, you’ll agree with me that it is more or less a drop in the ocean.”
“It’s a good start but we haven’t seen much in terms of soaking up the demand by the Lagos state government.”