Inflation Trend In Lagos Housing Price
Lagos, and other cities to experience high cost rent review by the end of the year. @amanlikekore
With the inflation trend rising, real estate experts are foreseeing an increase in rent and property values within major cities due to the economic reality.
Increase in property values due to the high cost of construction materials as developers are spending more when building new properties. Besides, existing properties will also rise in value as a result of the reduced supply of new constructions.
According to the Consumer Price Index report, recently released by the National Bureau of Statistics (NBS), Nigeria’s inflation rate for the month of March 2021, rose to 18.17 per cent from 17.33 per cent recorded in February 2021. This represents 0.82 per cent points higher than the February figures.
Nowadays, Property owners now spend more to build houses, as the cost of cement, iron rods, sanitary wares and tiles, among others, have all risen significantly. For instance, the cost of steel, which was sold at N234, 000 per tonne as of March 2020, had increased to N380, 000 at the end of March 2021. This represents a 62% increase within the period under review. Cement increased from N2, 600 to N4, 200 in Lagos.
Another factor responsible for the hike, especially in Lagos, is the lack of formal housing. With over 3.8 million households in Lagos, up to 2.1 million households are without formal housing. This presents a supply gap of over 55%.
Due to the population explosion in Lagos, excess demand drives up house prices. This could make landlords, who frequently get requests for their available spaces, increase the prices and let out or sell the property to the highest bidder regardless of the nature of the tenant. Prices are bound to increase between 35–50% depending on the area and circumstance of renting.