2018 Real Estate Insight, Trend Watch
As the New Year is ushered in, there is hope for recovery and restored confidence in the Nigerian real estate sector. Though it may take some time, the market may start to experience some progression as the external environment improves.
New trends for 2018 are already beginning to emerge for which investors, developers, brokers and agents will need to keep up with and adjust accordingly. A few of them are as follows.
Short-Term Rentals: Increase in short -term rental market has created an opportunity for property owners to be more flexible with leasing their properties. This trend is beneficial to both Landlords and tenants. For instance, renting a room in a shared apartment or renting an apartment for short term with the option to pay monthly in some cases is a better and more affordable option for individuals or families who may not be afford to cough up the regular yearly chunk at once or for people who prefer an apartment style accommodation as opposed to hotels and guest houses during short trips. Companies like Fibre and Airbnb are turning things around and bringing the much needed flexibility to the rental sphere to favour both Landlords and tenants who would wish to embrace it.
Rent to own: Simply put, rent to own is being able to live in the property you wish to acquire. After the agreed period of rent elapses and is fulfilled, annual rent will accrue towards ownership of the property you reside in and eventually becomes yours. At least 70% of the Nigerian population live and work in rented properties, shows that a big portion of people live below what is considered rich enough to acquire their own properties with very low prospects of wealth creation through real estate which can otherwise be achieved if you own your own property. More developers and owners are subscribing to the rent to own scheme in Nigeria.
Supply meets demand – We have witnessed decades of shortage of homes, however, with the various emerging and credible low cost housing initiatives, the supply of housing to bridge the deficit gap will slowly start to meet the demand. Development and ownership opportunities that are said to be affordable for the average Nigerian home. These optimistic constructions are set to bring new homes to the market and create opportunities for low income earners to upgrade to their own homes as opposed to remaining indefinitely in the rental bubble. Although it might take a while longer, there is hope that 2018 will usher in the delivery of a number of low cost housing developments that have been in the pipelines.
Free trade zone development – When it comes to land sales, development and growth, free trade zone, Ibeju, Lekki is receiving all the attention and is definitely one to watch in 2018. One of the biggest challenges faced in 2016 and 2017 was poor investor confidence locally and internationally. With Dangote refinery estimated delivery starting to look more like reality, Pan Atlantic University, other major developments and fully functional companies such as power oil, Jiu Hua etc. the fear of the average buyer surrounding the future, growth and development of free trade zone seems to be disappearing. Investors, individual buyers and developers are becoming more confident and are being lured in by its potential. There is also an influx of corporate and international investors. It is gaining recognition and becoming quite competitive and as a result, real estate prices are skyrocketing by the day. There is hope for strong economic growth and an increase in property ownership.
These are but a few of the emerging real estate trends.
I wish you all a fantastic 2018 as we remain optimistic about the market.