Lagos residents from neighbourhoods like Gbagada, Surulere, Maryland, Yaba, and Ajah are increasingly drawn to the upscale areas of Ikoyi and Victoria Island when considering rental options.
This trend is fueled by the allure of these prestigious neighbourhoods, despite the premium costs associated with them.
According to a recent report by Buyletive, an online Nigerian real estate platform that promotes properties in Nigeria, the average annual rent for a one-bedroom apartment in Ikoyi is N6 million.
Although this figure is significantly high, it continues to attract residents from other parts of Lagos who are willing to pay a premium for the benefits associated with living in such a desirable location.
The survey highlights that 17.4% of respondents aged between 25 and 45 prefer to reside in Ikoyi. In comparison, 15.7% of respondents expressed a preference for Victoria Island. Other respondents were more inclined to were Lekki Phase 1 and Magodo.
This inclination towards these neighbourhoods is largely driven by their high-quality amenities and services. Approximately 10% of those surveyed place a high value on properties that offer comprehensive amenity packages, including robust security services, which significantly enhance the overall living experience.
What to know
Despite Lagos being ranked as the 4th least livable city globally by the Economist Intelligence Unit’s 2023 Global Livability Index, local renters are showing a strong willingness to invest in properties with better living conditions.
This growing demand for improved amenities is expected to bolster the appeal of properties in these upscale neighbourhoods, enhance tenant satisfaction, and potentially lead to longer-term tenancies.
Rental costs in Lagos vary significantly depending on the neighbourhood. Ikoyi, being one of the most sought-after areas, commands the highest rents, with one-bedroom apartments averaging N6 million per year. In comparison, Victoria Island, another prime location, has an average rent of N4 million for a similar unit.
On the other end of the spectrum, Gbagada offers a more budget-friendly option, with annual rents for a one-bedroom apartment around N1.3 million.
For those seeking larger accommodations, the cost of renting a three-bedroom apartment in Ikoyi can soar up to N25 million, while in Gbagada, the same type of property might cost about N3 million annually.
What we know
The rising inflation and volatile exchange rates have significantly impacted property prices in Lagos, leading to an increased demand for rental properties. This economic environment has made renting more attractive compared to owning property for many residents.
As a result, approximately 96.5% of Lagosians currently live in rented apartments, with only 1.5% owning their homes. This shift is reflective of the broader economic challenges faced by many, including the rising cost of living and fluctuating property values.
The most sought-after residential areas based on affordability and proximity in Lagos are Yaba, Surulere, and Gbagada. However, the supply of housing in these areas remains insufficient to meet the growing demand.
The housing deficit in Lagos is currently estimated at over 3 million units, underscoring a significant gap between the demand for residential properties and the available supply. This persistent deficit highlights the urgent need for increased investment in housing development to address the needs of the city’s growing population.
As Lagos continues to navigate these economic and housing challenges, the preference for upscale neighbourhoods like Ikoyi and Victoria Island reflects a broader trend towards valuing quality living conditions and amenities, despite the associated costs.
This trend is likely to shape the rental market dynamics in Lagos in the years to come, with potential implications for both property developers and renters alike.