The Lagos housing market showed signs of recovery in 2017 after being hit hard by Nigeria's recession from 2015 to 2016. Average asking house prices on Lagos Island rose 13.84% in 2017, led by a over 30% increase in Victoria Island, though prices have yet to reach pre-recession levels. Lagos Mainland was more stable during the recession, with prices rising each year, but growth slowed to just 0.53% in 2017. While the economy is predicted to fully recover in 2018, the real estate sector, including house prices, will likely continue climbing but at a slower pace than before the recession, especially on Lagos Island.

1. The RAC Lagos House Price Index – 2018 Outlook
In 2017, Nigeria exited its worst recession in history by recording a 0.56% GDP in Q2 2017 and this was
followed by a second consecutive growth in Q3 2017 by 1.40%. Despite these positive results, the road to
full recovery will take a while. Various sectors of the economy are still in negative territory regarding GDP
and the real estate sector is amongst the sectors that is yet to be back in positive GDP numbers. In Q3
2017, the country’s real estate sector recorded a real GDP growth of -4.12%. The 2016 recession marked
a period of low volume of transactions and activities across all the various sectors of the real estate industry
resulting in extreme illiquidity in the market.
In the second half of 2017, the Lagos housing market started to show signs of economic recovery and this
was reflected in house prices across the state. The Lagos Island market which had been worst hit by the
recession in 2015 and 2016 with negative price growth of - 24.77% and -5.58% respectively finally saw the
light of day with asking prices rising again but yet to reach pre-recession levels. Last year, the average
asking price of a 4/5 single family unit on Lagos Island was N196,050,175 an increase of 13.84% from the
previous year of N172,214,772. The rise in asking price in this segment of the market can be attributed to
the supply of new homes across the highbrow areas of Ikoyi, Victoria Island and Lekki Phase 1 which all
saw asking price increase over the course of the year. Lagos Island continues to enjoy a stable supply of
new homes and with the high cost of forex these new homes raise the price ceiling of house prices in the
market.
Figure 1 RAC Lagos Housing Index
Source: Residential Auctions Company
Victoria Island led the charge on the overall increase in average asking house price on Lagos Island with
average asking price rising by over 30% in this location. The staggering increase in average asking house
price in Victoria Island can be largely attributed to unoccupied and near obsolete secondary homes on the
major streets and the Eko Atlantic project which is directly adjacent to it and will be a game changer in the
future.
0.0
20.0
40.0
60.0
80.0
100.0
120.0
140.0
160.0
180.0
200.0
2010 2011 2012 2013 2014 2015 2016 2017
Lagos Island Lagos Mainland

2. Table 1 Lagos Island House Price Growth
Locations
House Price
2017/2016 (% Change)
Ikoyi 8.18%
Victoria Island 31.82%
Lekki Phase 1 6.60%
Source: Residential Auctions Company
Unlike the Lagos Island market, its counterpart the Lagos Mainland market was immune to the recession
as average asking price showed positive growth in 2015 and 2016, during these periods, average asking
prices rose by 20.43% and 2.33% respectively. In 2017, the trend continues albeit at a more slower rate as
average asking house price remained flat with a marginal growth of just 0.53%. The average asking price
of a 4/5 single family unit on Lagos Mainland last year was N75,913,101 compared to N75,509,463 the
previous year. The supply of new homes remains a contributing factor to rising house prices even on the
Lagos Mainland but the difference is supply of new homes in this market is significantly lower than what is
obtained on Lagos Island.
Despite the fact that the overall average asking price on Lagos Mainland remained largely unchanged, the
same cannot be said for asking price in sub-locations that make up the Mainland and are featured in the
index. Leading the pack with the highest increase in average asking house price is Anthony Village followed
by Gbagada with 29.40% and 24.09% respectively. Both sub-locations have seen a low number of new
homes come to completion over the last 12 months. On the opposite end of the spectrum, Ilupeju and
Omole Phase 1 have seen the highest drop in average asking house price at -18.80% and -14.01%
respectively and this is due to the moderate delivery of new homes in both locations in the previous year.
Table 2 Lagos Mainland House Price Growth
Locations
House Price
2017/2016 (% Change)
Anthony Village 29.40%
Gbagada 24.09%
Ifako-Gbagada 12.70%
Ikeja 2.27%
*Ikeja GRA 1.63%
Ilupeju -18.80%
Magodo Isheri 5.46%
Magodo Shangisha -3.49%
Maryland 0.45%
Ogudu GRA 9.65%
Omole Phase 1 -14.01%
Omole Phase 2 -4.34%
Surulere -3.33%
Yaba -4.68%
Source: Residential Auctions Company *Ikeja GRA was not included in the index
The World Bank has predicted that Nigeria’s economy will grow by 2.5% in 2018 which means the country
would have made a full recovery from the recession. It is our prediction that as the economy improves so
will the real estate sector and house prices will continue to rise across both Lagos Island and Lagos
Mainland markets but it will take some time before prices reach pre-recession levels particularly on Lagos
Island.

3. Important Note
Finally, in accordance with our normal practice, we would state that this report is for general informative
purposes only and does not constitute a formal valuation, appraisal or recommendation. It may not be
published, reproduced or quoted in part or in whole, nor may it be used as a basis for any contract,
prospectus, agreement or other document without prior consent, which will not be unreasonably withheld.
Our findings are based on the assumptions given. As is customary with market studies, our findings should
be regarded as valid for a limited period and should be subject to examination at regular intervals.
Whilst every effort has been made to ensure that the data contained in it is correct, no responsibility can be
taken for omissions or erroneous data provided by a third party or due to information being unavailable or
inaccessible during the research period. The estimates and conclusions contained in this report have been
conscientiously prepared in the light of our experience in the property market and information that we were
able to collect, but their accuracy is in no way guaranteed.
Contact
For further information on this report please contact:
Omorotimi Akinlose
Managing Director
Mobile: +2347082276528
E-mail: rotimi.akinlose@rac.com.ng