The rapid increase in the rent as well as land value will be a permanent fixture in the real estate sector for the rest of 2022, the UbosiEleh Annual (2021) Real Estate Report stated.
The UbosiEleh Report is a research publication that evaluates trends in the real estate sector on a yearly basis with a view to extrapolating present and future realities based on past and existing trends.
According to the report, residential real estate received more boost as the coronavirus pandemic continued to create concerns, and consequently many organisations adopted work-from-home policy.
It read in part, “Residential demand was mainly for family housing units, pocket friendly and small sized accommodations. The real estate market grew by 2.81 per cent in the last quarter of 2020 which marked an exit from recession.”
It, however, described the growth as fragile because of many threats to the sector including insecurity, escalating cost of building materials which rose to 50 per cent, among other factors.
The report projected a positive outlook for residential real estate for 2022, now in the eighth month, basing it on key developments leading into 2021.
It also projected a “spike in rents and land values” and reiterated that the two to three bedroom flats would remain in high demand, much higher than terraces or detached houses.
In its review of commercial real estate, the report noted that prime office rents in Nigeria’s big cities recorded a marginal increase in the first quarter of 2021.
“This showed that working from-home triggered by the COVID-19 pandemic failed to reduce the cost of renting such properties. In all, the real estate sector expanded modestly from 1.77 per cent increase in Q1 2021, to 3.55 per cent in Q2 2021,” the report stated.
According to the 128 page report, rental demand was expected to move upwards by as much as 25 per cent.
In Lagos, the report projected that rental values for existing commercial buildings would rise between 10 – 20 per cent, while there would not be much change in demand expected on real estate values in the north and the nation’s capital, Abuja.
In the central business district of Abuja, the report projected that commercial real estate rental and demand value would continue to rise at between 15 – 20 per cent.