Nigeria’s luxury home markets soared in 2021, record increase in sale prices

The Nigerian luxury real estate market is getting a significant boost from increasing number of wealthy individuals, who are seeking to own multiple homes and new portfolios.

The luxury residential market increased last year as a result of the impact of the COVID-19 pandemic, as many in the working class saw the need for better homes with access to facilities that encourage Work From Homes (WFH) policies.

Such facilities, include steady electricity supply and stable internet connections. Besides, increase in insecurity drove many to seek more secure neighbourhoods within gated communities.

The fall of the Naira relative to the dollar has also made purchase of houses more affordable for those in the diaspora, leading to an increase in demand, with its upward effect on the price of the residential units.

According to Knight Frank Nigeria, Port Harcourt, Abuja and Lagos recorded an increase in sale prices between 10 per cent to 12 per cent across the prime neighbourhoods in these cities.

“The motivations for price increase include adequate security and power supply as well as the quality of houses in these areas.

In 2022, Knight Frank anticipates a gradual increase in the demand for prime real estate, but not necessarily the super luxury class. “An expanding middle class desirous of quality housing will fuel increase in demand,” Chief Executive Officer, Knight Frank Nigeria, Mr. Frank Okosun said.

“As long as the offerings continue to match the expectations of the home purchasers, demand will remain sustainable. The growth of this demand is likely to be muted by the state of the wider national and global economy,” he said.

The Director, School of Environmental Studies, Moshood Abiola Polytechnic, Ogun State, Dr. Samson Agbato, said despite the country’s struggling economy and general unease, overall market activity in various residential sub-asset classes remained strong in the first half of the year.

Agbato, an estate surveyor and valuer, said Lagos and Abuja recorded an average of 25-30 per cent increase in price. The Lagos Island residential real estate market in H1 2021, for example, was characterised by the short let bubble, and the millennials’ rule.

“The increase in prices can be attributed to the all-time high price of land in prime locations on the Lagos Island (particularly in gated communities like Banana Island, Shoreline Estate, Cowrie Creek, and Pinnock Beach Estate).

“Fast-rising off-plan development activities, continuous rule of millennials, a short-let market bubble, an increasing number of off-market listings,” he said.

In 2022, Agbato said the residential real estate market would remain mostly unchanged from where it was in 2021 as fewer rooms will continue to be demanded in city centres as against four to five bedrooms.

“Short-term rentals will continue to receive upward reviews. Therefore, developers will make every effort to meet the highest possible standards in their projects, and some transactions will be completed for much more than the asking (and market) price, even though few ones may close for undisclosed sums,” he said.

The Guardian learnt there was “unexpected increase in demand for luxury homes,” while wealth creation also played a big role in driving price and demand growth in 2021. There were five million new millionaires in the world in 2021, according to the yearly Knight Frank Wealth Report.

This newly generated wealth led more buyers to make real estate investments of varying kinds. “Access to technology and the digital democratisation of investments, including private equity, have led to greater levels of wealth creation and growth. This is something that will gain momentum over the coming years,” the report said.

MEANWHILE, Dubai saw the biggest gain in luxury-home prices of any major global city in 2021, as values around the world increased, according to a new report.

The increase in demand and rise in prices across 100 major hubs for luxury real estate were fueled by many factors including low mortgage rates, shifts in lifestyle choices due to the pandemic and more flexible working patterns.

Dubai led the list with a 44.4per cent increase in high-end sale prices from December 2020 to December 2021, according to the report.

“The U.A.E’s handling of the pandemic, strong take-up of the vaccine, the delivery of high-end turnkey projects as well as innovative new visa initiatives and economic reforms, have together boosted Dubai’s profile in the eyes of international buyers,” said Kate Everett-Allen, head of international residential research at London-based Knight Frank.

In the Middle Eastern city, sales above $10 million have historically accounted for two per cent of all transactions but in 2021, they equated to seven per cent, according to Ms. Everett-Allen.

Moscow was in second place with a 42.4 per cent yearly change, mainly due to Russia’s mortgage subsidy programme and tight supply, the report noted.

The next three spots were filled by U.S. cities: San Diego, California, with 28.3 per cent, Miami with 28.2 per cent and New York’s Hamptons with 21.3 per cent increase in luxury home prices.

“We are seeing increasing interest in both indirect exposures, by way of real estate investment trusts for example and direct investment in physical real estate, especially as a hedge against potential inflation,” Pierre-Yves Lombard, managing director and deputy head of private banking at Lombard Odier for the Asia region, said in the report.

The luxury housing remains on track for another boom year in 2022, according to experts.

“Dubai, Miami and Zurich lead our 2022 forecast, with prime prices expected to end the year between 10per cent and 12 per cent higher. Asian cities are expected to trail slightly, but even here, prices will grow,” Liam Bailey, global head of research at Knight Frank, said in the report.
“Key themes to watch: Agents will complain about stock shortages, buyers will complain about rising taxes and cooling measures, and city markets will be back in demand.”

The world’s affluent population—those with a net worth of more than $5 million—grew by nearly 20per cent in 2021, according to The Report: 2022 Global Luxury Market Insights, produced by Coldwell Banker Real Estate LLC and the Coldwell Banker Global Luxury programme. In the U.S. alone, the wealth growth rates pressed even higher, rising nearly 25 per cent during that period.

As a result, luxury real estate is growing. The sales of single-family luxury homes, defined as the top 10 per cent of any given market, climbed nearly 15 per cent in 2021, and prices increased 20 per cent from 2020, according to the report.

“Stock market gains, rising home equity, increased savings and the cryptocurrency boom have all contributed to a massive expansion of wealth and the sheer number of affluent individuals across the globe,” says Michael Altneu, vice president at Coldwell Banker Luxury. “This—combined with a renewed focus on home for fulfilling a range of needs from security, escape, community, work, and wellness—has led to unprecedented demand for bigger and better homes in new locations. As a result, luxury is no longer concentrated in a few major cities; it’s everywhere and we’ll continue to see the growth of secondary markets for years to come.”

International buyers are expected to add to luxury markets, returning to U.S. real estate as pandemic-led travel restrictions loosen. About 83 per cent of real estate pros surveyed by Coldwell Banker anticipate international buyers coming back to the U.S. market. They believe foreign buyers will most be drawn to turnkey properties that offer additional space and privacy. Real estate pros also believe they will target secondary or suburban areas.

Secondary markets are becoming an increasing draw to the luxury market. For example, markets like Denver; Boise, Idaho; Sacramento, Calif.; San Antonio; Raleigh, N.C.; and Salt Lake City are seeing increasing interest from luxury buyers, according to the report.

“Work-from-home opportunities, climate change considerations, and accessibility to dream locations mean luxury may continue to expand throughout the country as consumers search for the home that best fits their needs and desires,” the report says.

Also, secondary home purchases are increasing as the wealthy add to their real estate portfolios. About 70 per cent of individuals with a net worth of $5 million or more own two or more properties. More affluent buyers also are purchasing getaway homes—about 32 per cent in 2021, up from 23 per cent in 2020, according to the report.

“Double-digit wealth and affluent population gains have happened concurrently with a once-in-a-generation change in living patterns and migrations,” says Liz Gehringer, president of Coldwell Banker Affiliate Business and chief operating officer for Coldwell Banker Real Estate LLC.

“As luxury real estate represents a larger percentage of the total housing market than ever before, it is absolutely crucial that luxury real estate professionals have a firm grasp of all factors influencing wealthy buyers and sellers today. The agent has become the affluent buyer’s connection point to new locations around the world.”

By Chinedum Uwaegbulam

The Guardian 

Slum dwellers in Nigeria left homeless after mass eviction

Authorities in Nigeria evicted thousands of impoverished residents from a Lagos slum, leaving many homeless, residents and eyewitnesses told CNN.

Residents described scenes of panic and confusion Tuesday as hundreds of navy personnel pushed into Tarkwa Bay and neighboring island communities on the Lagos Lagoon, ordering them to leave within an hour.

Navy Cmdr. Thomas Otuji, a spokesman for the operation launched in December, said the planned demolition of buildings aims to tackle oil theft along pipelines that run through the coastal city.
Mohammed Zanna, a resident and paralegal, told CNN that the forces shot sporadically in the air as residents, who said they had no prior notice, scrambled to find their families and pack their belongings.

"Everyone was panicking and packing everything they could carry. The men were shooting in the air and shouting that people should leave," Zanna told CNN.

Many residents queued at the harbor till nightfall, trying to secure boats to transport their families from the island to the city, said Megan Chapman, co-director of the Justice & Empowerment Initiatives, a nonprofit that assists poor communities. She visited neighborhoods while the evictions were ongoing, Chapman said.

"We saw dozens of boats filled with belongings and families trying to see how they were going to leave the island. Most of them did not know," Chapman said.

A consortium of advocacy groups, including JEI and the Nigeria Slum/Informal Settlement Federation, put the number of displaced persons in the thousands.

The navy's Otuji said he did not have an exact figure of those impacted by the eviction, but residents in affected communities had been told to leave before the exercise began.
Residents were still packing their belongings out of the waterfront settlement on Wednesday, according to Zanna.

Tarkwa Bay, home to at least 4,500 people, is among dozens of communities with structures that have been marked for demolition by the navy. All are accessible only by water.
In some communities, bulldozers have already done their work.

Otuji said residents had been advised to leave in December after authorities found that the majority of homes on the islands were built along pipelines. They also discovered that some structures in the slum were being used as a disguise for crude oil theft operations, he said.

"We found at least 300 illegal spots and dug out pits where oil products were being tapped and sold illegally, even to neighboring countries," Otuji said.

"They have been there doing all sorts of illegalities. This is dangerous for people to be living in these areas with oil pipelines. What else can we do but to make sure that we salvage the situation?" he said.

Chapman said authorities should have targeted those involved, instead of evicting innocent families in the community, mostly inhabited by fishermen and artisans.

"The law does not allow for collective punishment and summary demolition as a security measure. If there are individuals involved in these activities, what the law requires is for the individuals to be arrested and prosecuted for any crime they might have committed," Chapman told CNN.

People living in waterfront communities in Lagos, a city of 21 million people, have been forcefully evicted in recent years by authorities citing safety concerns.

In 2016, more than 30,000 families were sent packing from Otodo Gbame, a fishing community, after state security agents allegedly destroyed their homes.

Many of them are still homeless despite a court ruling that the Lagos state government should resettle those affected by the demolition.

CNN

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Slum dwellers in Nigeria fight evections with maps and music

When bulldozers entered the Nigerian slum of Njemanze and started tearing down hundreds of waterfront homes, Michael Uwemedimo was there to document the scene with his camera.

The residents soon began directing him, he said, making sure he did not miss any of the destruction in August 2009.

“Film this, film that,” he recalled them saying.

And when the British-Nigerian documentary maker was arrested by security forces, the residents of the slum in the city of Port Harcourt hid his camera and kept it safe until he was released later that day.

“They recognized the camera as an instrument they could use to literally frame what is important to them, to tell their story, to give their perspective,” said Uwemedimo.

According to housing advocates, half of Port Harcourt’s more than 1 million residents live in slums.

Many of those residents live in waterfront areas, on land with prime real-estate value, and have no official housing documentation, noted Isa Sanusi, spokesman for Amnesty International Nigeria.

That makes them especially vulnerable to evictions, he said.

“Generally, Nigerian authorities use forced eviction in the course of urban renewal ... with the land they formerly occupied being developed into luxury real estate,” he explained - although the cleared area in Njemanze remains undeveloped.

Uwemedimo said his experience in Njemanze showed him how desperate the residents were to draw attention to what was happening to them, and he wanted to help.

In 2010, with former journalist Ana Bonaldo, he co-founded the Collaborative Media Advocacy Platform (CMAP), a collective of filmmakers, urban planners, researchers and Port Harcourt residents who use art, music and data collection to mobilize the people impacted by forced evictions.

The group has since grown to more than 40 volunteers.

One of the first things Uwemedimo did with it was take a giant, inflatable mobile cinema on a tour of low-income communities in the city to show them films about forced evictions around the world and in their own neighborhood.

“We found cinema was a good way of gathering people, of animating people, of creating debate,” he told the Thomson Reuters Foundation from his living room, with a computer blasting out songs about evictions.

A spokeswoman for the ministry of urban planning would not comment on specific eviction cases, but said the government had an obligation to take down unsafe or unauthorized buildings.

“The state carries out demolitions when buildings do not follow the approved building plan, or are built illegally or in unauthorized areas,” she said.

“For example where you have high tension cables, building on top of waterways or in unapproved areas - all that can lead to demolitions.”

STORYTELLING

The collective gives residents the chance to share the impact of those evictions through its Human City Project, which is made up of a collection of art and media ventures owned and run by members of the Port Harcourt community.

On one of the city’s waterfronts, in a solar-powered building called The Media Shed, a team of volunteers run Chicoco Studios, producing and performing songs about the evictions and other issues that affect people living in slums.

Like the other parts of the project - which is mainly funded by grants from organizations and charities - the studio gets its name from the black mud that Port Harcourt residents pull from the swamps to reclaim the land on which they build their homes.

Dickson Abibo, a musician and producer, regularly tours the area with other musicians to put on shows for residents.

They also hold “Sessions in the Shed”, inviting young locals to the studio to collaborate on songs.

“We come together to build our own original, unique sounds that reflect the daily experiences of slum dwellers,” said Abibo.

Nearby, Chicoco Radio broadcasts the tracks that come out of the Shed sessions and produces a weekly drama series in which the characters face the same challenges Port Harcourt residents deal with every day - from poor infrastructure to crime.

“It shows how we live in waterfront communities, our problems, our good and bad sides,” explained Sotonye Sekibo, a local radio actor and reporter.

ARMED WITH INFORMATION

While the project gives residents a platform to tell their stories, it also helps them have a say in what happens to them next, said Uwemedimo, who is currently a visiting fellow at King’s College London.

The Chicoco Maps program collects geographic information about Port Harcourt that residents can use to take part in decision-making about the area.

Volunteers regularly go out into the communities to index every building and conduct household surveys, gathering details on factors such as population, topography, land use, employment, and health.

The results are fed into a database which residents can refer to when dealing with authorities, security forces and non-profits who want to bring new initiatives or development projects to their neighborhoods.

As an example, Uwemedimo pointed to a recent community survey in one neighborhood where responses from residents showed that together they were spending 18 million naira (about $59,000) on water annually.

So, they started pooling their money to buy a shared solar-powered borehole, which they hope will reduce their energy bills.

Community mapping has also been vital in the fight against the forced evictions that sparked the Human City Project in the first place, Uwemedimo said.

With every building cataloged, demolitions are easy to track and residents can use that information to support their demands for compensation, he noted.

“Now ordinary people are able to speak up and stand up to powerful forces like the government,” said Sekibo, the radio actor.

Sekibo and other Port Harcourt residents said the project has made it easier for them to protect their homes.

Since the project launched, they noted, forced evictions are not as common as they used to be.

“This project has changed our lives and shaped how we look at things and issues around us,” said Prince Nosa, a slum dweller who trained for four years under the project and is now a sound engineer.

“We now know and understand our rights and we are always ready to support any slum community if demolition is ever mentioned again.”

By Linus Unah

Reuters

Single women struggle to rent homes in Nigeria

Many landlords in Nigeria suspect single women of being prostitutes, making it difficult for them to rent apartments.

A successful career woman, Olufunmilola Ogungbile, 30, never thought that she would be sleeping on a friend's couch after five months of apartment-hunting in Abeokuta city in south-western Nigeria.

She had moved from Lagos after securing a good job with the Ogun state government as a project administrator. Despite being financially independent, she struggled to find an apartment in middle and upmarket areas because she was single.

"The first question the landlord would ask me is if I'm married?" Ms Ogungbile said, "I'd say 'No', and they'd follow with, 'Why not'?"

She was often left puzzled.

"What does my marital status have to do with me getting a place to live in?"

'We want decent people'

Ms Ogungbile said the discrimination was widespread.

"Ninety-nine per cent of the landlords I met did not want to rent to me because I am a single woman," she told the BBC.

"Most landlords and agents would tell me, 'Can you bring your boyfriend or your husband?' In these kinds of apartments, we don't like boys coming in. We just want decent people."

Ms Ogungbile believes the hurdles she faced are down to cultural expectations - marriage is a benchmark used to measure decency.

"In this part of the world, if you are not married then you are a prostitute," she added.

Sylvia Oyinda - a product manager in the retail sector in Lagos, Nigeria's throbbing metropolis - agrees that the stigma makes it difficult for single women to rent in Nigeria.

Ms Oyinda, 31, was engaged when she started looking for an apartment. Landlords refused to meet her without her fiancé.

"There is a saying 'small girl, big god' that describes young single women who rent alone or squat with other females.

"The saying refers to single women who have sponsors, typically older men, who pay their rent," she said.

'Men have more money'

Ms Oyinda believes landlords assume most young single women are like this.

"The three landlords I met all refused to show me their apartments. They would tell me, 'Don't bother.'"

Out of frustration she stopped scouting on her own. On the fourth attempt, she went with her partner, to whom she is now married, and was taken seriously. The couple eventually settled for a four-bedroom flat in the high-end area of Lekki.

Coleman Nwafor, a landlord and property owner, said he does not discriminate, but most of his tenants and buyers are men because they have more money.

"Most single ladies are under the responsibility of their parents or a lover. You can never tell what will happen after the first year. And every landlord wants a tenant who will pay without stress and renew their contract once it expires," he told the BBC.

"Most single ladies are not working. There are more jobs for men than women in Nigeria. That is just the way it is."

'Landlords try to police women'

Yinka Oladiran, 25, who moved from New York to Lagos in May 2016 to pursue a career as a TV presenter, said she lived independently in the US and wanted to maintain her freedom in Nigeria.

She also wanted to reduce a three-hour commute to work from her father's home, but she could not rent an apartment without her father giving his consent to landlords.

"There were landlords who said they did not want to rent to me until they had spoken to my father to make sure that he was OK with it, even though I was paying with my own money," Ms Oladiran told the BBC.

"My opinion didn't matter. The landlords try to police women," she added.

After searching independently for more than six months, she finally got an apartment in April 2017.

However, she said she felt constantly undermined by security staff, especially when she came home late from work, as they often asked her who she was visiting.

"For that to even happen over and over again was very insulting," Ms Oladiran said.

As for Ms Ogungbile, her five-month hunt ended last week when she finally moved into a studio flat.

She said she secured it through a letting agency which focused on her income rather than her gender or marital status.

The 30-year-old, who is now excited about painting her new home in her favourite colours - purple and lilac - believes she fought back against discrimination in her own little way.

"Part of fighting the stigma was me refusing to bring a spouse or a partner because that was part of the criteria before they would hand me the keys," she said.

BBC

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