This trend, as highlighted in a recent report by The Guardian, is reshaping the landscape of high-end living across the country. At Troloppe Property Services, we've observed firsthand the increasing interest in premium properties and the evolving preferences of this discerning clientele. This article delves into the factors driving this growth and its implications for the market.
Although the demand is not as strong as the medium and lower-end apartments, inflows of top professionals spanning diverse fields from the diaspora willing to invest in the luxury real estate market are driving growth in the segment, VICTOR GBONEGUN reports.
The real estate market is witnessing an unprecedented surge in demand and interest in high-end properties due to the evolving tastes and preferences of the country’s affluent community, especially diaspora investors.
According to Statista, one of the key trends in the Nigerian real estate market is the increasing popularity of gated communities and luxury estates in cities. These developments offer security, modern amenities, and a higher standard of living, which appeals to the growing middle class and expatriate population.
These developments offer expansive spaces, premium finishes, distinctive architectural designs, and smart home systems. Although, they come at a high cost and essentially for high-net-worth Individuals, they offer buyers well-gated facilities, and larger-than-standard apartments in strategic locations, as well as facilities such as greenery, pools, hot tubs/Jacuzzi-style tubs, gyms, game rooms, fire-proved facilities, entertainment, restaurant and copious parking space. There are projections that Nigeria’s real estate sector will grow by 6.91 per cent between 2025 and 2029, resulting in a market volume of about $4 trillion in 2029.
A research-based firm, Estate Intel shows that about 753 apartments with price tags of $1 million are under construction in Lagos alone. The demand is growing, and supply is appreciating in major locations, while occupancy rates have significantly improved in the past one and a half years. In Lagos, for instance, places such as Eko-Atlantic City, Banana Island, Victoria Island, Ikoyi, Ozumba Mbadiwe, and Lekki among others have an abundance of ultra-modern projects that cater to a niche of the market. In Port Harcourt, Old GRA, New GRA, and Peter Odili Road, Trans Amadi axis, among others, boast luxury apartments. In the Federal Capital Territory, Abuja, areas that include Asokoro, Jabi district, Maitama, Guzape, Asokoro, Katampe extension, Wuye, some parts of Bwari and Wuse II, which are reputed for exclusivity, and closeness to the city centre provide ultra-luxury residential apartments for residents.
In terms of rentals, a two-bedroom of such property in some locations can be as high as N18 million. For sale, a one-bedroom luxury flat goes for about N65 million, a three-bedroom could be around N300 million to N350 million, while a luxury four-bedroom penthouse for sale could be as high as N650 million, depending on location and the features. Expounding on the market’s prospect, the Chief Executive Officer, NorthCourt Real Estate, Mr Ayo Ibaru, explained that despite initial apprehensions regarding a spike in interest rate, which went up as much as 38 to 40 per cent, luxury home sales remained robust in 2024. He emphasised the market will maintain the same momentum in 2025 even as developers have maintained their commitment to the market segment.
The Managing Partner of REFin Homes Limited, Mr Kazeem Owolabi, explained that one per cent of the population buying luxury apartments is still patronising that segment of the market. Owolabi said: “People are still buying luxury apartments. These include those in the medical field and other top professionals buying good locations in semi-luxury and luxury apartments. The market is segmenting itself, if you want to do full luxury, you concentrate on that, if it is semi-luxury, you do semi-luxury and attract buyers along that line. Majorly, there is a need to build based on buyers in mind. You don’t do development without targeting a specific set of people and knowing what they will buy.”
He highlighted that middle-class professionals and managers are also looking for such property. However, he added that the homes must be properly built, equipped with modern facilities that reduce electric consumption, be green energy compliant, and come with water efficiency, modern sewage systems and functional homes. Owolabi said: “The outlook for luxury homes is positive. The economy is looking positive. Inflation is coming down and could grow in the right direction if well managed. Nigeria just reached the Organisation of Petroleum Exporting Countries (OPEC) quota, with a margin above the required 1.5m barrels per day. Dangote is reducing the price of petrol and things are getting competitive. The kinds of people who buy luxury homes don’t need a home that affects their cash flow.”
Professor of Estate Management at the University of Lagos (UNILAG), Austin Otegbulu, pointed out that the demand is not as strong as the medium and lower-end apartments. There are still few buyers who can’t go below patronising luxury apartments. Some of the landlords have diverted some of the luxury apartments into short-let apartments, which give a lot of money and a higher rate of returns than the regular letting.
“We have a high level of void in the luxury segment compared to others. Many people who can afford it are affected by the state of the economy. In the past, they were majorly patronised by expatriates and those who work in multinational firms. However, some of these multinationals have left the country, creating a lot of vacancies in those apartments. That is the major problem now,” he said. Otegbulu who is also a council member of the Nigerian Institution of Estate Surveyors and Valuers (NIESV) said that there is high demand for luxury apartments due to their higher rental value. For instance, he observed that in Lekki, and Victoria Island, Lagos, properties that used to go for between N7m to N9 million have almost doubled and people are still paying for it.
“Rentals moved up between November/December 2024 and now mainly because of currency devaluation and what is called ‘filtering down process’ which implies that when there is a poor economy, the lower level will move to the medium level and nobody moves from lower level to upper level unless they have some air of transformation. There is demand and there will always be demand for luxury apartments,” he said. He further noted that inflation, high cost of funding and cost of materials directly and indirectly impact the luxury market. “The buildings coming into the market are still minimal, meaning that people are not building, the construction cost is high and to fund such projects is expensive. When this happens, it will affect the development and supply of new buildings,” Otegbulu said.
According to him, people who are into the information technology business and the so-called ‘Yahoo boys’ are some of those who appear to be able to afford luxury apartments. He noted that the group is increasing in number in every part of the country.
However, Otegbulu warned that landlords must endeavour to do proper screening while renting such apartments because they may come to them, pay a year or two rent and thereafter disappear.
The insights from The Guardian's report underscore the importance of understanding the needs and preferences of diaspora investors in Nigeria's luxury real estate market. At Troloppe Property Services, we are committed to providing tailored solutions that meet the evolving demands of this dynamic sector. Whether you're an investor seeking high-return opportunities or a buyer looking for a premium property, our expertise and market knowledge can guide you towards successful outcomes. The Nigerian luxury real estate market presents a dynamic and evolving landscape. As the country continues to grow and develop, this sector is poised for further expansion. We are ready to help you navigate this exciting market.
Original article posted here: https://guardian.ng/property/how-demand-from-diaspora-investors-spurs-nigerias-luxury-estate/