Nigeria Luxury Home Market Soars


The Nigerian luxury real estate market is getting a significant boost from increasing number of wealthy individuals, who are seeking to own multiple homes and new portfolios.

Nigeria’s luxury home markets soared in 2021, record increase in sale prices.

The luxury residential market increased last year as a result of the impact of the COVID-19 pandemic, as many in the working class saw the need for better homes with access to facilities that encourage Work From Homes (WFH) policies.

Such facilities, include steady electricity supply and stable internet connections. Besides, increase in insecurity drove many to seek more secure neighbourhoods within gated communities.

The fall of the Naira relative to the dollar has also made purchase of houses more affordable for those in the diaspora, leading to an increase in demand, with its upward effect on the price of the residential units.

According to Knight Frank Nigeria, Port Harcourt, Abuja and Lagos recorded an increase in sale prices between 10 per cent to 12 per cent across the prime neighbourhoods in these cities.

“The motivations for price increase include adequate security and power supply as well as the quality of houses in these areas.

In 2022, Knight Frank anticipates a gradual increase in the demand for prime real estate, but not necessarily the super luxury class. “An expanding middle class desirous of quality housing will fuel increase in demand,” Chief Executive Officer, Knight Frank Nigeria, Mr. Frank Okosun said.

“As long as the offerings continue to match the expectations of the home purchasers, demand will remain sustainable. The growth of this demand is likely to be muted by the state of the wider national and global economy,” he said.

The Director, School of Environmental Studies, Moshood Abiola Polytechnic, Ogun State, Dr. Samson Agbato, said despite the country’s struggling economy and general unease, overall market activity in various residential sub-asset classes remained strong in the first half of the year.


Agbato, an estate surveyor and valuer, said Lagos and Abuja recorded an average of 25-30 per cent increase in price. The Lagos Island residential real estate market in H1 2021, for example, was characterised by the short let bubble, and the millennials’ rule.

“The increase in prices can be attributed to the all-time high price of land in prime locations on the Lagos Island (particularly in gated communities like Banana Island, Shoreline Estate, Cowrie Creek, and Pinnock Beach Estate).

“Fast-rising off-plan development activities, continuous rule of millennials, a short-let market bubble, an increasing number of off-market listings,” he said.

In 2022, Agbato said the residential real estate market would remain mostly unchanged from where it was in 2021 as fewer rooms will continue to be demanded in city centres as against four to five bedrooms.

“Short-term rentals will continue to receive upward reviews. Therefore, developers will make every effort to meet the highest possible standards in their projects, and some transactions will be completed for much more than the asking (and market) price, even though few ones may close for undisclosed sums,” he said.

The Guardian learnt there was “unexpected increase in demand for luxury homes,” while wealth creation also played a big role in driving price and demand growth in 2021. There were five million new millionaires in the world in 2021, according to the yearly Knight Frank Wealth Report.

This newly generated wealth led more buyers to make real estate investments of varying kinds. “Access to technology and the digital democratisation of investments, including private equity, have led to greater levels of wealth creation and growth. This is something that will gain momentum over the coming years,” the report said.

The luxury housing remains on track for another boom year in 2022, according to experts.

“Dubai, Miami and Zurich lead our 2022 forecast, with prime prices expected to end the year between 10per cent and 12 per cent higher. Asian cities are expected to trail slightly, but even here, prices will grow,” Liam Bailey, global head of research at Knight Frank, said in the report.

“Key themes to watch: Agents will complain about stock shortages, buyers will complain about rising taxes and cooling measures, and city markets will be back in demand.”

The world’s affluent population—those with a net worth of more than $5 million—grew by nearly 20per cent in 2021, according to The Report: 2022 Global Luxury Market Insights, produced by Coldwell Banker Real Estate LLC and the Coldwell Banker Global Luxury programme. In the U.S. alone, the wealth growth rates pressed even higher, rising nearly 25 per cent during that period.

As a result, luxury real estate is growing. The sales of single-family luxury homes, defined as the top 10 per cent of any given market, climbed nearly 15 per cent in 2021, and prices increased 20 per cent from 2020, according to the report.

“Stock market gains, rising home equity, increased savings and the cryptocurrency boom have all contributed to a massive expansion of wealth and the sheer number of affluent individuals across the globe,” says Michael Altneu, vice president at Coldwell Banker Luxury. “This—combined with a renewed focus on home for fulfilling a range of needs from security, escape, community, work, and wellness—has led to unprecedented demand for bigger and better homes in new locations. As a result, luxury is no longer concentrated in a few major cities; it’s everywhere and we’ll continue to see the growth of secondary markets for years to come.”

International buyers are expected to add to luxury markets, returning to U.S. real estate as pandemic-led travel restrictions loosen. About 83 per cent of real estate pros surveyed by Coldwell Banker anticipate international buyers coming back to the U.S. market. They believe foreign buyers will most be drawn to turnkey properties that offer additional space and privacy. Real estate pros also believe they will target secondary or suburban areas.

Secondary markets are becoming an increasing draw to the luxury market. For example, markets like Denver; Boise, Idaho; Sacramento, Calif.; San Antonio; Raleigh, N.C.; and Salt Lake City are seeing increasing interest from luxury buyers, according to the report.

“Work-from-home opportunities, climate change considerations, and accessibility to dream locations mean luxury may continue to expand throughout the country as consumers search for the home that best fits their needs and desires,” the report says.

Also, secondary home purchases are increasing as the wealthy add to their real estate portfolios. About 70 per cent of individuals with a net worth of $5 million or more own two or more properties. More affluent buyers also are purchasing getaway homes—about 32 per cent in 2021, up from 23 per cent in 2020, according to the report.

“Double-digit wealth and affluent population gains have happened concurrently with a once-in-a-generation change in living patterns and migrations,” says Liz Gehringer, president of Coldwell Banker Affiliate Business and chief operating officer for Coldwell Banker Real Estate LLC.

“As luxury real estate represents a larger percentage of the total housing market than ever before, it is absolutely crucial that luxury real estate professionals have a firm grasp of all factors influencing wealthy buyers and sellers today. The agent has become the affluent buyer’s connection point to new locations around the world.”

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