07/11/2024
How Developers are driving up the cost of Land in Lagos.
Land is gold in Lagos.
Lagos is the smallest state in Nigeria in terms of land area, and obviously the most densely populated. Housing is a major challenge for the city inhabitants as the Lagos State Government continues to struggle to meet the demands of the people.
A recent trend in property development especially in highbrow areas and generally all over the state the wholesale development of properties by private developers and itβs inherent increase in cost of purchase of land. Cost of land has astronomically increased over the past few years which is directly connected to Property Developers with humongous stash of cash, Letβs take Magodo G.R.A Phase II as a case study, it is an area I am very familiar with. Just a few years back, a plot of very scarce land in the estate will set you back around One hundred and Fifty Million Naira, the same land today will cost between Four hundred to Six hundred Million Naira depending on the size and location.
The reason for this is not far fetched, the demand for Land by these developers for their next project has driven up the cost of purchase, while the average person will want to get the best value to build his dream home, the developer isnβt particularly concerned with the cost and will always be willing to pay a higher price, even willing to offer a higher price to beat out the competition. Such a Developer can build four buildings on a parcel that will normally contain a single building. Imagine the profit maximized from such project.
Besides the prime examples of places like Old Ikoyi, Victoria Island and Lekki Phase I axis, Developers have also caused sharp increase in the value of land in places like Surulere, Ogudu, Omole Estates Phase I and II, Gbagada, Mushin, Festac.
While some industry experts will argue that it augurs well for the industry, others are of the opinion that it drives the price of properties further away from the reach of the ordinary Nigerian living in Lagos, it makes owning a home more like a pipe dream and that Lagosians in that category will have to seek land in the outskirts of town, where infrastructural amenities is still at infancy.
This is also true for major cities in the country and indeed around the world,
THE WAY FORWARD.
In a free market capitalist economy like ours, there is really little anyone can do about the increase in cost of land. The market dictates the price. What can be done instead is for the Lagos State Government to continue to invest in Mass Housing projects through Public- Private Partnerships to provide housing for as many people as it can while empowering itβs agencies to develop new towns and residential schemes. It has the New Town Development Authority for that. The Agency should seek out new areas where government acquired land will be available for individuals to buy and develop as was done in the 80βs which gave birth to so many Estates in Lagos today.
Muizz Kazeem.
November 2024.
