Built environment professionals have predicted that capital inflow for new luxury developments, especially in the Lagos market may not be available in three years.
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The Founder/Chief Executive Officer of Troloppe Property Services, Mr Leye Taiwo, said there might be a slowdown in luxury projects from the first quarter of 2025 as capital may begin to move from real estate to fixed-income products.

Taiwo spoke at a webinar on the supply of newly constructed apartments/a deep dive into the demand drivers for such properties and the future of the Lagos luxury property market.

A recent report from Estate Intel shows that up to 753 apartments with price tags of $1 million or more are currently under construction in Lagos. Most of these units are located on the B.A.G Stretch in Old Ikoyi, Eko-Atlantic, Victoria Island, and Banana Island with asking prices going up to $6 million.

He said: “As much as we have a huge increase in supply, we don’t expect it to be sustainable over the next few years till 2027; we expect things to slow down and don’t expect to see the same pipeline in supply towards 2027.”

Speaking on the drivers of demand for luxury property, he noted that three major groups are driving the demand. These, he said, are High-Net-worth-Individuals (HNIs), institutional and diaspora investors.

He said the current occupancy rate of 97 per cent, suggested that there is an insatiable demand for prime residential with huge increments in the median sale and lease pricing over the same period.
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However, he said the current pipeline, which represents circa 30 per cent of the current existing stock, suggested that the supply-demand dynamics are likely to change over the next few years as more buildings are delivered. This, he said, will lead to price adjustments.

“The HNIs are experiencing a lifestyle change moving to larger apartments, which were previously in limited supply. A few years ago, 90 per cent of luxury apartments were designed to meet the needs of expatriates, today the dynamics have completely changed to where the units are designed to meet the needs of HNIs as owners’ occupiers with the supply of products that weren’t in existence ten years ago.

“With more awareness about inflation, and real estate being an edge against inflation, this has resulted in increased market participation by institutional investors and we expect this to grow if there is market transparency and improved access to data in the sector,” he said.

Taiwo said the devaluation of the naira has led to increased investment in the real estate sector from the diasporians, and improved quality of developed buildings. According to him, diaspora investors see their property purchase as an investment, which they furnish and let out to tenants.

Chief Executive Officer, Estate Intel, Dolapo Omidire, said joint ventures have been one of the triggers for growth in the prime property market, which is expecting over 700 luxury apartments supply.
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“We are going to see some homegrown solutions to financing and various ways through which people can get into the market to purchase property. The property purchasing habits of HNIs have changed significantly. Before now, the expectation was that you live in a big house but now people are happy to live in an apartment,” he said.

On the impact of building collapses on the luxury property market, he pointed out that one of the ways property buyers are responding is by becoming more intentional about the type of contractors hired by developers for projects, especially their track record and integrity.

Head, Corporate Communications, Eko Atlantic City, Joanna Fabikun, observed that Nigerians have an interest in exclusivity in terms of property choices, durability, technology and sustainable buildings. She noted that Nigeria has laws to safeguard against building collapses but where the country falls short is in enforcement.

She emphasised the need for strict building regulations by the government and ensuring that constructions are done to the highest standard and lives are safeguarded. She disclosed that the management of Eko Atlantic has put into place measures to ensure there is no building collapse in the city.

Earlier, a Senior Consultant at Henley & Partners, Chidinma Okebalama, advised investors to diversify their portfolios and mitigate risks by investing in residence and citizenship options.
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