Property Investment in the Capital of Lagos over the years has seen tremendous growth due to its ever-growing population and the growing demand for better housing options within the city’s metropolis. This growth championed by the private sector which is a result of the enhanced flexibility of owning property.

In most developed countries access to funding or mortgage has always been the facilitator of property ownership for individuals which in turn reduces home deficit and further develops the economy. Even though this is not the case in Lagos Nigeria, the private sector has adapted this strategy by creating property instruments that allow for ownership over a moderate time frame. Terms like “Pay to Own” “Installment Plans” are now a major staple of the Nigerian property Industry more property companies have adopted this strategy, a proof that this strategy has been revolutionary to the growth of the industry. Before these times property ownership required that people had lump sums before getting involved which was a major barrier to property ownership thereby slowing down entry into the industry. 

The Good:

 Increased access to the Industry has evoked a spike in the demand of property ownership because people don’t need to have huge lump sums before they can invest, more people are willing to own property since housing is an unavoidable expense hence it makes good economic sense to pay towards owning your own home. This rise in demand has led to a steady boom in the industry and we see investors entering the property investment space either are homeowners, property marketing companies or developers.  

The Bad:

In most developed countries, home-ownership models are often developed and designed by forward-thinking governments in most cases in collaboration with its financial institutions. In the form of Tax havens for investors, reduced tax, small interest rates and long term financing. This is designed this way because of the Capital intensiveness of property ownership. They understand the need for a long spread for property investment for price regulation and to ease the burden of financing since the economic building is both the job of the Government and its citizens hence their duty to facilitate it.

Because of an almost nonexistent government collaboration and the inability for financial institutions to provide very long term financing (10 years and above) we see the cost burden rest on the consumers while they are oblivious of it. For most entrepreneurs it is simply profit, Profit margins are the determinants for setting prices of these properties that go on sale. Most of the property development Company not being liquid enough for these projects see the need to approach commercial banks for access to funds who in turn releases these funds at high-interest rates and when costs like construction costs, marketing and sales costs, profit margins are added they lead to an overall increase in the cost of the developed property before they are accessible to the home buyer or worse to the homeowner who pays in installment for an added interest rate.

The Ugly:

A booming industry always attracts all sorts of people including scrupulous individuals aided with the inability of the government to implement regulations towards homeownership and its development. We see a rise of developers who care less about the real value of properties being developed and more about the profit margins they gain on the sale of these properties. Worse still there has been a steady rise of companies who flout Urban planning laws and procedures and go ahead to commercialize these properties to the detriment of the final users. At whatever turn we see the consumers/homeowners paying the ultimate price of all these ripple effects, be it overpriced properties, defective homes or property fraud in all its forms the burden of all these actions rest on the buyer. 

How can the buyer protect Itself:

While the most effective way of protecting oneself from all this remains self home construction but in cases where this can not be actualized, It is advisable for intending homeowners to seek options that aren’t obvious to the public and be very given to doing their due diligence before acquiring any property. In cases where investors want to own rental properties they should opt for partnerships. A simple group of 4 individuals coming together to pay a developer for a 4 unit block of rental apartments will cut out (Interest rates, marketing costs, commission/sales costs) that would have been incurred if the rental apartment was bought off the market and they would still have control of the quality of home being built.








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