Sage Grey Group Managing Director, Temitope Runsewe, has said that developers are increasingly seeking financing for housing projects in prime Lagos areas such as Ikoyi, Victoria Island and Lekki, attributing it to rise in middle-class income.
Runsewe disclosed this at the company’s 10th anniversary news conference on Thursday in Lagos.
The comments come as rising property and financing costs reshape Lagos’ residential market, with developers facing growing demand for housing alongside rising affordability pressures.
Responding to Nairametrics’ question on the types of real estate projects developers are seeking financing for and what this says about demand, Runsewe said requests are increasingly coming from high-growth, high-income locations.
Runsewe cited the strong returns of companies such as MTN as an indication that spending power remains present in parts of the economy and is translating into demand for higher-end housing.
Runsewe expects the current pattern to shift over the next two years as rising housing costs make prime locations increasingly unaffordable for middle-income earners.
Runsewe expects development to increasingly spread towards the edges of Lagos and along major transport corridors as developers respond to affordability constraints in established prime markets.
The concentration of developer financing in prime Lagos locations comes amid rising land, construction and financing costs, which are making residential development increasingly expensive across the city.
Johnson said lower financing costs, tax incentives and faster approvals would make affordable housing more commercially viable for private developers.
He also expects vertical development to become increasingly important as Lagos faces limited land and rising housing demand, particularly in Ikoyi, Victoria Island, Oniru and Lekki Phase 1.
Lagos has a homeownership rate of 31%, while 51% of residents live in rented accommodation, according to Fortren & Company.
The report attributed Lagos’ high land values to strong demand for prime locations, limited land supply and infrastructure gaps. The analysis covered Ikoyi, Victoria Island and Lekki Phase 1, where competition for development sites remains high.
It also noted that the concentration of new housing in luxury and deluxe developments, coupled with limited access to affordable mortgages and high interest rates, is widening the affordability gap for many households.
