A new report by BuyLetLive has revealed that economic uncertainty may push renters in Lagos towards shared living spaces as rising costs and economic instability impact the residential market.
While the report acknowledges continued demand for residential properties driven by population growth and urbanization, it predicts a slowdown in rent growth and increased competition for available units.
“The continuous rise in economic instability is causing significant uncertainty, prompting both foreign and domestic investors to adopt a wait-and-see approach due to the uncertainty surrounding the real estate market and the economy at large,” the report stated.
This uncertainty, coupled with the slowdown in construction activities, is expected to further constrain the supply of residential properties, leading to increased competition and potential upward pressure on property prices in high-demand areas.
The report also highlights a shift in rental preferences, with a growing demand for smaller apartments and shared living spaces. “The ongoing economic uncertainty may push rental occupiers to shift demand towards smaller apartments or shared living spaces,” the report noted.
Despite these challenges, the report emphasizes the long-term resilience of the Lagos residential market. It highlights the strong demand for affordable housing and the government’s ongoing efforts to improve access to homeownership through initiatives such as the increased National Housing Fund mortgage limit.
However, the report also notes that the implementation of the proposed monthly rent payment scheme, while a significant initiative, has not yet fully shifted renter preferences away from annual payments.
Overall, the report underscores the need for a nuanced understanding of the evolving dynamics of the Lagos residential market and the importance of government policies that support sustainable and inclusive growth in the sector.
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