Lull has been the word at this segment of the market where a significant drop in demand and values has been witnessed in the last 12-15 months. In some cases, demand has come down by as high as 20-25 percent while effective demand is gradually disappearing from the market.
However, a BusinessDay survey in other locations in the country including Port Harcourt, Kano and Benin reveals that at the lower end of the market, both capital and rental values have been on steady rise in the past 12 months.
Analysts attribute this to some obvious factors. According to them, the rise in price is understandable given that Port Harcourt, for instance, is a high income area, no thanks to the oil and gas industry which leave a lot of cash in the hands of oil workers while increased investment and business activities are responsible for the value rise in Edo and Kano respectively.
Towards the end of the third quarter of last year, Bismarck Rewane, chief executive, Financial Derivatives, in his economic review noted that rental values in the Ikoyi and Victoria Island markets had dropped by as high as 30 percent as a result of high vacancy rate.
According to the consummate economist, three-bed apartments that were rented for between $180,000 and $200,000 per annum had come down to between $120,000 and $150,000 per annum while a plot of land at Banana Island that sold for N250 million had dropped to between N180 million and N200 million.
On the other hand, in Port Harcourt, rental values in the outskirts of the city have recorded an increase. According to our survey in areas as Oyigbo, Eneka, Igwuruta among others, values have seen between 10-15 percent increase in the past 12 months.
A three-bedroom flat that was rented for N50,000 in 2009 now goes for N500,000; one-bedroom flat at Woji and environs that went for N2 million in 2009 is now being rented for N2.5 million.
In Lagos, concerns have continued to mount over rising vacancy rate and new supplies into this already challenged market. In Ikoyi, precisely in Parkview Estate and Banana Island, the number of houses “now letting and/or for sale” is on the increase. Anthony Owuye, a resident of the area, told our correspondent that he was alarmed with the rate at which houses ‘to let or for sale’ were springing up at Parkview.
And when BusinessDay visited this highbrow neighbourhood recently, it was discovered that quite a number of houses carried the tag.