Not a good time invest? Well, that depends.
In the stir of a pandemic, the drum bells of a recession rings loud as we watch oil, the main supply of our revenue dance to the tunes. What we hope for is that we fall to our knees and not flat on our bellies.
Still, the best openings will avail and the smart ones will take advantage by making advances to generate chances that yield good revenue once the Covid19 becomes history.
Many investors will not react or make sudden moves at this time. Observation will the key to surviving this period of economic instability and what remains post-Covid 19.
“Short term recession” is the only stake on the table in the foreseeable future.
Investing early and smartly will be the move to make to reap good dividends when the recession ends. The trends will be focused solely on developing “rentals” on small apartment units.
Small family sized apartments have seen huge increase in rents since 2018 to 2019.
There is rush for small family units – apartments, because it is economical, 2 or 3 units can be built in a 1.5 sized plot. Plus, the annual returns are good.
According to the reports on the State of the Real Estate Market, Fine & Country West Africa International, small family units – apartments adds that maximizing the value of a small piece of land relative to the ease of trade or rent.
In terms of position, the analysis shows that both rental values and returns on investment for different areas and house-types show that, in spite of their relatively higher values, Ibeju-Lekki and Ikoyi have more promising outlook and offer.
The residential real estate market has seen an increase in the annual price of 12 – 20% based on the records from the Nigerian Property Centre. As mentioned, Ikoyi and Ibeju-Lekki have the highest increase from 2018, while places like Ajah, Gbagada, Surulere, and Yaba remained largely steady.
Ikorodu saw the biggest decline in house prices of 25% from June 2018 to May 2019, followed by Ikeja ( -16.7%), Alimosho ( – 10.7%).
The average price of three-bedroom apartments was NGN 140 million (US$388,906) while five-bedroom apartments are for an average price of NGN 350 million (US$972,266).
Real estate in places outside of Lagos:
Abuja, the capital city of Nigeria is undergoing accumulative interest from both local and foreign investors. In Maitama, an upmarket region in Abuja, the average price of four-bedroom apartments was NGN 213 million (US$591,693) while five-bedroom apartments were sold for nnGN350 million (US$ 208,343), respectively.
Other places such Rivers, Oyo, Ogun, are also seeing an increase in rental prices for small apartments.
The return on investment in these apartments is quite good. This means that small apartment units in Lagos are the new trend – the path that any investor looking to capture during this Covid 19 pandemic can venture into.
Nigerians abroad normally buy a finished product in Lekki, or develop an empty land in Ibeju-Lekki, along the free trade zone, close to Dangote’s refinery. Opportunities abound in these locations that way there is a rush for these areas of profit.
While the bells of good rental profitability sounds, the struggle to secure permissions, readiness of financing, and competition will pose a threat and so, one must hurry to secure a spot to complete their goals.
Lagos is the most expensive city in Africa and is the most highly-priced real estate in Africa. This is the time to look at the small unit apartment in Lagos amid Covid 19 pandemic.