Inflation, high interest rates spike sales, rents by 40% in major cities

<p>• Lagos, Abuja, Enugu, P/Harcourt, Kano top list of high-end environs</p>, <p>Nigeria’s housing market has recorded a spike by about 40 per cent in cost of leases and sales in the first half of 2023, according to findings by The Guardian.</p>, <p>Amid inflation headwind, rising interest rates and attendant dip in new investments, the cost of lease or purchase of residential properties in major cities like Lagos, Abuja, Enugu, Port Harcourt and Kano has increased, and beyond reach of many.</p>, <p>Though the development is partly dynamic and demands still resilient, stakeholders have complained about the lack of standards and price control, thereby giving opportunities for operators to exploit the weaknesses of the system in terms of indiscriminate increase in prices of materials.</p>, <p>The Monetary Policy Rate (Interest Rate) has climbed to 18.75 per cent, from 16.5 per cent at the beginning of 2023. This implies that the cost of capital has increased by 12 per cent within six months, discouraging borrowing and reducing the volume of money circulation in Nigeria’s economy.</p>, <p>For the real estate and construction sector, construction cost has also risen and the eventual result is the delay in real estate supply, which can further exacerbate the pressure already on property prices.</p>, <p>For several months, there has been an increase in the price of cement and other components, such as blocks and rings in the building materials market. Prices of paints, reinforcement and sanitary fittings, sand, roofing sheet, tiles, as well as granite, rose by over 70 per cent.</p>, <p>Rentals have remained resilient in core city centres with sustained growth in affordable and highly-accessible neighbourhoods. Sales have remained relatively stable, driven mainly by diaspora spending and focus on off-plan properties.</p>, <p>Activities are concentrated in the new gated neighbourhoods and towns across these locations. Developers are more concentrated on apartments (one, two and three bedrooms), terraces, as their demand