The top 1%: Buying Patterns, Spread and What They Look Out for When Making Purchase

The Knight Frank Wealth Sizing Model 2021 report states that the number of Ultra High Networth Individuals in Nigeria as 867 and High Networth Individuals at 43,571 and these numbers is expected to rise to 992 and 52,029 respectively by 2025. This is a considerable chunk of the global figure put at 521,653 and 48,505,781 respectively

This figure however when compared with the total population figure of the country (estimated to be 206 million), reveals this exclusive group occupies the exclusive 1% (or even less).

Speaking on the issue, Tayo Odunsi, CEO of Northcourt opines that the rich certainly invest in real estate as against consumer goods. He states however that what has happened in recent times is that there has been a decline in the country in favour of international real estate locations where stronger economies prevail thus preserving property values.

According to him, there has been a steady decline in the number of HNIs, UHNIs and even billionaires and this is hinged largely on the currency decline being witnessed.

When asked if he agrees with the figures for the HNWIs and HNWIs in the study, Mr. Tayo says he tends to agree with the figures released given the backdrop that this is a report released by a renowned firm as well as considering the methodology which is underpinned by rigorous academic research by Davies et (2018).

On what the wealthy look out for when looking for properties to invest in he says wealthy individuals consider primarily two things; the security of capital and rental revenue. If the asset is secure ie has title, location etc. and also if it has a demonstrable demand which secures the rental return.

A third reason that often comes up is their ability/cost to manage the investment. Wealthy people, he says typically consider transaction costs more than the not so wealthy and this they are careful to factor into their decision making.

Mr. Tayo says the luxury market in Lagos and Abuja is currently gaining a lot of traction as they now house majority of the rich people in Nigeria. In the past, he says wealthy people were evenly spread across the country however due to rising insecurity and in tier 2 states, this has made the two states the hub for wealthy individuals.

On buying patterns, he says this is dependent on their demography and personal preferences.

According to Mr Tayo, the unstable and dwindling exchange rate favours no one but noted that people still buy properties due to home-country bias. Many, are also hopeful that there will soon be a tipping point where the exchange rate and economic challenges will begin to correct themselves.

Lastly, on mortgage, he holds that it is indeed easier for the rich to access mortgages, flexible payments along with other credit facilities.