Wednesday, April 16, 2014


The Nigerian housing market to all intents and purposes is an evolving market. It is evolving within an unstructured framework as there are no real working laws and regulations to cover the whole property industry. The few laws and regulations that have been put in place are not strictly enforced with no proper monitoring structure in place. I guess if we were to analyse this industry properly we will find that the problems with the property and building industry as with a lot of other industries is largely due to the lack of importance placed on legislation, weak enforcement and the mindset of the people. I believe that if these can be taken care of, then we will see proper working structures enhancing and growing the property market.
In the UK, before you do anything, there are laid down processes to follow and swift penalties if these are breached. Everyone there knows this, the laws are available and known to all, builders, artisans and users all have a duty to understand the law before they start work. The Developer and Estate Agent have a duty to let the client know what their rights are and how they are covered by their purchase. Everything is transparent and regulated from the price of building materials, salaries and house prices. House prices abroad in a certain area and of a certain size commands roughly the same price in sales and rent despite the finishing and decoration, but here in Nigeria, it is not unusual to find a three bedroom apartment in Lekki1 selling for N50m and a similar apartment next door asking for N70m because  the landlord used Dulux paint!  As there are so many ”developers” and landlords now in the property market who were previously into other professions but have some money in the bank and want to maximise their income, the property market seems to be the most lucrative at present. There is a lack of adequate training for many of these new fortune seekers who do not know how to select Surveyors, Architects and builders or know the difference between them. As a result we have some terribly built properties on the market that are sold to innocent investors who sooner or later will count their losses or spend many more millions bringing the property up to some decent liveable standard. In some unfortunate circumstances, these properties are rented out for two years or more and the tenants left to do all the repair works. The Lagos Tenancy Law has provisions to protect tenants from unscrupulous landlords, but not many tenants are still aware of this or how to start the legal process.

Many countries like America, Asia, Dubai, parts of Europe and the UK have gone through their own housing boom and crash and have developed robust systems for monitoring and controlling their systems. Maybe we need to go through our own unique mistakes to learn what works for us instead of just copying and pasting their own structures which are so inherently different from ours.


You might look at the above title of this article and wonder how that came about? But seriously if you think about it, Estate Agents have to understand when and where there is a market and who to target. An estate Agent may show ten clients twenty properties in a week spending 30+ working hours, and not sell or let any. The job is not as financially rewarding as many may think although if you do strike it lucky you may pocket in one day what you have struggled two years to make. You have to be persistent, you have to be patient, you have to have a thick skin, to be smart, intuitive and have a hustlers mind. It is not a job for anyone who does not like “wahala” because sometimes the “wahala” knocks you on the head when you are least prepared for it.
For example, recently a fellow Estate Agent I know received a brief from his “friend” to find some office space on the Island for a US based company that wanted to set up in Lagos. The friend gave him specific details of floor plan requirements and price range. All this was done over the phone with nothing in writing. The Estate Agent set out to get all the information he could on luxury office spaces in VI, Ikoyi and Lekki. This took about a week to get all the information together. He asked his friend to instruct his company in writing, but nothing was sent. He went ahead to send his friend the information he had gathered, only for the friend to say that the company only wanted old Ikoyi. You might wonder what role the friend who was sitting back and sending the Estate Agent running all over the place would take in all this. The friend had instructed at least three other Agents without any of them being aware of the other.  The fact that nothing was put in writing should have been an indicator that this brief may not be straightforward.  The Agent went back to look for suitable properties in old Ikoyi and found four that he sent to his friend. The friend took the property list and instructed one of the other Agents to double check and shortlisted to one property which an offer was made on. The lease was accepted and signed for 5 years without the first Agent knowing. His friend pocketed the fees which came to almost half a million USD and gave the second Agent one million naira.  Meanwhile the first Agent waited to hear from his friend and when he did not hear anything after a month, rang his friend who did not take or return his calls, so he rang up the management companies of all the shortlisted properties and found out that his “friend” had closed the deal on one of them and the property was now occupied by the US company.

His “friend” will not talk to him so he is considering legal action but has been advised that there is no evidence to prove his allegations so will more likely not have a case in court. What can he do? This is the brutal world of Estate Agents that many do not see


I do not aim to preach to anyone, but I am sure most are familiar with the parable of the house built on sand and the one built on rock. It says a house built on sand can never stand as the sand will be washed away from under the house because there is no proper foundation.  If you apply this literally to the amount of property development going on in sand filled areas, it does not look good. A great number of property constructions along the Lekki axis as well as the coastline of Lagos State is on reclaimed sand filled land. A look at the Eko Atlantic City will reveal how much land has been reclaimed from the sea at a cost of billions of dollars. More billions of dollars will be poured into developing it into a world class mega city. The Bar beach waves which was on the doorstep of the streets of Victoria Island has been pushed so far back into the sea that you cannot see the sea anymore. The water that has been pushed back will of course have to find other outlets, so will be redirected to areas that did not have so much water previously. Lagos State coastline has been suffering ocean surges and flooding in the last few years, could this be the reason why? I am not an expert on this issue and am just wondering where all the redirected water will go and if the sand filled land will ever be washed away?

During the week, the traffic on the Lekki Expressway was terrible due to long queues at petrol stations. On one of these days I decided that instead of sitting in the traffic jam, I would explore some of the side roads that I very rarely go into. One of these areas called Idado was an eye opener, there were beautiful houses and apartments under construction and there was a particular red brick development that would not have looked out of place in London or America. It was beautifully finished both inside and outside, the garden was landscaped to perfection. To be honest it was better than a lot of properties in Ikoyi or Banana Island. The only issue was that the road leading to it as not tarred. It got me thinking that a one can actually create their own little paradise in an unknown area and this would encourage other developers to build similar types of properties in the area. Many people are still focused on living in Lekki1, Victoria island and Ikoyi, not realizing that they could live in a better built property for a quarter of the price, just ten minutes down the road and still have all the comforts of 24hours electricity, clean running water and excellent security.



The landscape around us, especially on the Lagos Island is a daily disappearing and transforming event. The land along the Alpha beach and Eleko beach area is disappearing at an alarming rate. A colleague, who used to jog along the beach at Alpha beach six months ago, says that stretch of beach has now vanished. The waves from the ocean are hitting the barriers that separated the beach from the residential areas and now flooding the roads in that area. This is a hidden growing environmental disaster that no one is talking about. Let us for a minute forget the ocean erosion, let us examine the rate at which land is being sand filled and developed. The Lagoon along Osborne/Third Mainland bridge area has almost fully disappeared over the last ten years. Estates like Osborne Foreshore 1 and 2 have sprung up and more developments are planned further along the Lagoon shores.  In high end areas like Ikoyi, Parkview and Banana Island, you will find so much land reclamation going on and luxury developments springing up. The once famous Ikoyi Park is gone, giving rise to Parkview Estate. Banana Island came out of the sea and now provides homes for some of the wealthiest Nigerians and multinational companies. On Banana Island you will find Ocean Parade Apartments which is one of the most expensive pieces of real estate anywhere in the world. Apartments here can go for N200 million, which is almost $1.5million.  Not many people can afford to spend this amount on a property, yet the apartments are being snapped up quite quickly both for private us and as investment, of course it provides everything from central air conditioning, gyms, tennis and squash courts and swimming pool.  If you travel to Victoria Island’s Bar Beach Road, you will notice that the Beach has disappeared and will be giving way to mega luxury high rises in the next few years. In Oniru Estate which was previously a poor wasteland called Maroko where the people living in shacks were driven out, the land was sand filled further and is now sold for about N150 million per plot. Further along the Lekki Axis, you find that both sides of the Expressway are being rapidly filled up with new estates and businesses and giving rise to new areas springing out of the Lagoon and bush. Some of these areas were well known fishing and hunting grounds for hunters and villagers until a few years ago when developers started offering millions of naira for plots in the lagoon! Ten years ago you could buy a plot of land in Elegushi, Osapa, Agungi and Chevron for less than N500k, today those same plots for between N40-N100m. Just two years ago, you could buy a plot for N15million in these areas. No one is interested in building single homes on these over inflated priced lots of land. The areas are full of apartments, high rises, townhouses and quadruplexes with no gardens and almost no parking spaces inside the compounds. One thing that is obvious about all these new developments is that they are all sited behind high fences, high gates, electric barbed wire and all manner of security measures. Residents now demand tight security in their homes. You find estates within estates and self contained estates where power, clean running water, paved roads, manned security and other services provided. There is hardly any need now for residents to go outside their estates apart from for work or visiting. The whole environment has changed and is still changing beyond recognition


I attended a conference during recently where I met a delegation from Cape Verde island which is a small relatively unknown island surrounded by water just off the coast of West Africa by Gambia, They were in Lagos to seek investment in their growing property and tourism market. Although they only have a population of about two million people, they are aiming to be the next Dubai in terms of property and tourism development. Their population has 97% literacy rate and their standard of living is very high. Their minimum wage is set at about $140 per month, which in naira is about N23,000.00 This is for a country that does not have electricity or transport issues or any other major issues to spend their money on. They have four international airports which meets international standard, which brings me back to the point of this article. I was talking to one of the delegates who told me that he was shocked by the standard and state of our MMI Airport. This is his comment in full “For a country the size and wealth of Nigeria, the condition of the airport is shocking! I have travelled all over the world and the airport here in Lagos is the worst I have seen anywhere. It is not good for the image or reputation of the country”

I am sure you are also feeling the shame I felt. For an outsider visiting Nigeria, a country he has heard so much about and looked up to for the first time with high expectation, it is indeed a shame to hear this, and he is no way alone in his views, some are just too polite to tell us. However we must be honest with ourselves. The Airport and infrastructure all around is not a pleasant welcome into Lagos. I have written about this so many times over the years, yet it just seems to get worse. These are so called “small” countries coming to look to their “big brother” for money and advice to develop their country further, yet we are unable to provide the same in our own country. Cape Verde is already rich in almost every aspect of their economy but still want to grow further. Maybe Nigeria should visit Cape Verde and learn some lessons from them.

I also gathered some interesting facts on our own population and property market which is fascinating. It is reported that the population in Nigeria is now between 170-190 million and over 90 million are under the age of twenty. What this shows is that even though there is already a critical shortage of housing for those who can afford it, there are millions of young people still living with mum and dad who will in the near future need their own homes. Therefore there is going to be a massive demand for land and housing in years to come. There will also be a growing demand for infrastructure like roads, hospitals schools and shopping outlets to support the population. A city like Johannesburg has 2.1million people yet has 74 Shopping centres. Lagos has a population of over 10 million, yet only has 16 Malls/Shopping centres. Lagos as the capital is growing so fast, that demand in most areas will outstrip supply. For the housing industry this means that there is room for so many more developers to make their mark in providing affordable accommodation. There is an oversupply of high end accommodation already, many of which sit empty for months or years. So for wannabe developers, start working on your business plans!