The State of LAGOS Housing Market - Teaser

A Presentation by

About the ReportTRENDS

Lagos State remains the commercial nerve of Nigeria with a high concentration of business activities and is at the

moment, the most progressive in terms of infrastructure in Nigeria. Facebook spatial data of users within the country

shows that human migration was particularly high in Lagos with migration rate growing by 18.6% between 2000 and

2012. A policy brief from the state government’s Economic Intelligence Unit puts the population of Lagos at 20.19

million; which is growing at a rate of 3.2% per annum while its urbanization rate is 16%. There are 20,000 persons per

square kilometer and a daily intake of 3,000 people coming in from other states. Being the top travel destination,

accommodation becomes huge puzzle especially when the low and middle income class is being discussed.

Supportive framework for providing adequate shelter has been set up by the Nigerian government in an effort to

alleviate the housing deficit which currently stands at 17million units. The introduction of the National Housing Policy in

2006 and the Nigerian Mortgage Refinance Commission have to an extent, created a more flexible environment for the

private sector to participate in housing development. The Lagos State government is directly involved in constructing

more homes under the LagosHoms scheme but the continuous surge in population is not matched with speedy delivery

of affordable homes. The extent of housing shortage is enormous. In 2 years, government efforts have yielded not more

than 10,000 affordable housing units which is a short fall from the projection of 224,000 housing units needed annually.

About the Report contd..COMPETITIVE LANDSCAPE

The high housing demand has spurred increased participation by the private sectors including banks, construction

firms, real estate developers, mortgage lenders and individual investors. Several new developments and housing

estates have been constructed with good roads, security, water, recreational facilities and other supportive

infrastructure. The luxury market is thriving with leading brands such as the Eko Atlantic developing high rise

apartments with state of the art technology. Developers have built strong brand loyalty and are well positioned in the

prime market. The luxury segment benefits from the absence of well serviced apartments, inadequate power supply,

poor city planning and many more inadequacies which do not cater to the needs of a rising number of high net worth

individuals currently at 15,400 persons in Lagos. The luxury market has experienced growth due to increased earnings

of individuals and groups.

PROSPECTS

2015 was not a very good year for the Nigerian real estate market. The country’s financial crisis from oil price crash and

naira devaluation has resulted in a slow property trading and a change in home buyers spending habits. Less people

are prepared to buy houses than there are for rent.

New market interests have developed in the affordable housing and luxury market. We have collected data in specific

towns weighing their purchasing power and consumer behavior. A concentration of high income earners and a dense

population in Ajah is mismatched with poorly managed apartments especially in the Ajah-Badore axis. An unserviced

studio apartment currently rents for N250,000 per annum compared to N350,000 for a serviced one. We foresee a rise

in demand for serviced apartments in the Ajah axis of Lagos with favorable demographics. This is a class of luxury

already gaining market acceptance considering the cost, time and inconvenience involved in self-servicing an

apartment every year. Our insight further expands to discoveries in other locations covered in this report.

More on the ReportDiscover the latest market trends and uncover sources of future market growth for the real estate industry in Nigeria with research from Pison Housing's team of analysts. Find hidden opportunities in the most current research data available, understand competitive threats with our detailed market analysis, and plan your corporate strategy with our expert qualitative analysis and growth projections. If you're in the property market in Lagos, Nigeria, this report serves as a market intelligence tool. Our research will save you time and money while empowering you to make informed, profitable decisions.

The State of Lagos Housing Market research report includes:

• Analysis of Key Supply-side and Demand trends

• Detailed Segmentation of International and Local products

• Historic and Current data on housing statistics in Lagos

• House Price Index-measuring the house price level across major districts

• Luxury Consumer Insight

• The Average Consumer’s Demands on housing by specific towns and districts

Why buy this report?

• Gain competitive intelligence about market leaders

• Track key industry trends, opportunities and threats

• Inform your marketing, brand, strategy and market development, sales and supply functions

State Macroeconomic Overview

2011 2012 2013 2014 2015 2016GDP (NBn) 16,447.23 18,508.499 20,857.735 22,943.528 25,237.881Public Debt($Bn) 0.49 0.61 0.94 1.17 1.21Domestic Debt (NBn) 201.5 230.4 278.9 268.1Total Budget (NBn) 445.2 485.3 499.1 489.7 489.69 662.6Internally Generated Revenue 202.8 219.2 237.1 276.2Allocation to Housing & Community Amenities(NBn)

26.76 42.8 62.7 50.5 49 62.7

Allocation to Housing & Community Amenities(%allocation)

5.94% 8.8% 12.6% 10.3% 10% 9.5%

Key Economic Indicators- Lagos State

Lagos Gross Domestic Product: Top Ten Sectors

2011 2012 2013 2014 2015Manufacturing (NBn) 4,869 5,479 6,175 6,792 7,471Road Transport (NBn) 4,354 4,899 5,521 6,073 6,681Building & Construction (NBn) 3,240 3,646 4,109 4,520 4,972Wholesale & Retail (NBn) 1,380 1,553 1,750 1,925 2,118Telecommunications (NBn) 610 686 773 850 935Financial Institutions (NBn) 576 649 731 804 885Real Estate (NBn) 330 372 419 461 507Transport Services (NBn) 194 218 246 271 298Livestock (NBn) 130 147 165 182 200Air Transport (NBn) 128 144 162 178 196

Lagos HOMS

The Lagos State Home Ownership Mortgage Scheme is an initiative by the Lagos State Government to serve as a stimulus package for equity-supported access to home ownership for residents of the state. Using a special framework for sustainable and affordable mortgage regime in the state, the initiative set out to achieve:

• Provision of affordable homes of various types and various sizes across the state

• Provision of access to mortgage finance for residents of Lagos State who are First-Time-Buyers to purchase these homes.

• The emphasis on first-time-buyers is to avoid purchase by multiple property owners who may distort the intention to meet the enormous housing demand. “First-Time-Buyer according to this initiative refers to residents who are entering into the property market for the first time and do not own any home within the territory of the state.

State Housing Development

State Housing Development (contd)

Other Criteria For The Lagos Homs Project Include:

• Proof of tax payment for the last 5 years

• The minimum mortgage term 10 (Ten) years

• Applicants who are successful at the draw are required to make an initial down payment equal to 30% of the value of the home applied for.

• There is a 6% interest rate on the loan

• The Lagos HOMS also has plans to partner with the NMRC for future projects.

Overview of Residential Real Estate Sector in Lagos

Overview of Residential Real Estate Sector in Lagos (contd)

Luxury Residential Market

Luxury Residential Market (contd)

Preferred Payment Plan

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Monthly Earnings

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“xxx”-Figures have been excluded from this sample. Data and all details available in the report


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Entrepreneur Government SalaryEarner

Private Salary Earner

Preferred payment plan for different categories of earners

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%people considering luxury home purchase or rent

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Reasons for owning a luxury home

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Rent Vs. Buy a Luxury Home

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Housing Demand Analysis

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Housing Demand Analysis (contd)

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Details in the report

Roland Igbinoba House Price Index

A House Price Index (HPI) measures the change in prices of residential properties or houses, both old and new, bought by households. By measuring price changes, the growth rates of house price indices track house price inflation. Investors are guided on timing of investment, property owners are able to make better decisions on whether to hold off selling property till price appreciates or sell immediately before price drops sharply. Typically, house price indices are computed quarterly or monthly and we have computed the house price index quarterly from Q2, 2015 to Q1, 2016. See full table in report.

Roland Igbinoba House Price Index (contd)

Chart removed. See report for complete details

Q1, 2016


Details removed. See report for complete details

Thank you

The State of LAGOS Housing Market - Teaser

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