5 factors that will affect the property market in 2016

property market

It would take a brave pundit to predict how the property market will be like in 2016. There are so many economic issues in state of flux (forex market, subsidy removal, implementation of Federal Government budget) which may change significantly and upset any predictions. Aside from economic and political considerations there are some factors which have the capacity to affect property values this year. We look briefly at five of those factors……


The completion of the Lagos Light rail which is scheduled for mid-2016 has the capacity to open up areas along the corridor it passes and connects. Locations like Badagry and estates like Festac and Satellite Towns along with Amuwo Odofin will be more attractive to investors and renters.  This will also be the case for estates along the Lagos Ibadan Expressway if that very important trunk road (at least up to the Shagamu Interchange) is completed. Conversely, the traffic pressure on the Lekki Epe Expressway will continue to put pressure on middle class estates which are situated after the second toll plaza. Victoria Garden City in particular has seen muted demand for properties whose values have fallen in real terms while similar estates like Charlton Gate, Pinnock Beach etc have seen values rise because of locational advantages.


It is ironical that in a market where there is said to be a 17 million housing deficit, supply should be an issue but pockets of the real estate market have more units than the market can absorb. The commercial Grade A office buildings in Ikoyi and Victoria Island is one example while luxurious residential blocks in the same axis are hard to shift – either for rent or for sale. With new sandfilled estates of Eko Atlantic, Orange Island etc coming on stream, this situation is likely to get more acute this year. Mid-range units (N40-N50m) in the Lekki axis saw a development boom which has resulted in many units without buyers. Conversely, as developers appetite for more land grows (despite surplus of completed units), the supply for bare land in the Lekki axis amd Ikeja GRA, which saw the interesting situation of land prices rising in these locations but completed house prices remaining static. Expect more of the same in 2016.

Foreign Exchange rates

Developments priced in dollars this year are likely to see a decline on their returns in real terms as exchange rates depreciation and exchange controls hit them with a double whammy. Foreign investors may find the Nigerian terrain too difficult because of this and their ardour for investments will cool. On the plus side, Nigerians resident abroad may find their earnings catching up with values here and will be attracted to buying properties here. This would be the ideal time for Nigerian banks with foreign subsidiaries to offer mortgages to Nigerians in diaspora.

Governor Ambode

The Lagos State Governor has in the relatively short time in office shown that he is an action man when it comes to real estate. In short order he had revoked several high profile allocation and demolished or shut down key market. As we write threats of revocation of allocations of owners of Lekki Phase 2 and Abijo GRA subsists. This year, we should see significant structural changes to the Lagos Home Ownership Mortgage Scheme (HOMS).

NMRC and Developers finance

Last year, the Nigerian Mortgage Refinance Company (NMRC) disbursed N1 billion to Imperial Homes Mortgage Bank Limited (formerly GTHomes Limited), with a promise that many more mortgage banks will enjoy the facility this year. There are many hurdles to cross but all seems to point to a larger number of Nigerians having access to mortgages this year. Indeed, this may be the year where even those that cannot get mortgages will be able to enjoy payment plans from developers who seek to push their completed houses and even land within their estates.  For instance, Megamound (09099999083), developers of Lekky County Homes has slashed the price for land in its estate and will accept a 50% deposit with spread payments while Kimberly Hunter (01-2123487, 08083907492) will allow purchasers who deposit 65% of purchase price to move to site and start building on their Ifako-Gbagada/Oworonshoki Foreshore Estate.

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1 Comment

  • Otunba

    March 23, 2016 at 3:26 pm




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