Bubbling on the Island

★ ★ ★ ★ ★ Bubbling on the Island... Prime real estate areas in Lagos are suffering from high residential vacancy rates... Inflated Values Prior to the economic crisis of 2009, a housing boom led to an over supply in residential housing stock, creating excess capacity especially in prime areas. 19% 21% Avg. Rosldentlal Victorla Island vacancy rate* Ikoyl Possibility of new bubble emerging with high asking prices and increased supply in Lekki/Ajah Axis Victoria Island and Ikoyi have been worst affected, with some streets having more than a third of their properties lying empty. Weak demand is putting downward pressure on prices. However, market sentiments still illustrate that properties may be overvalued. Vacancy rates on selected streets in Ikoyi [%] Vacancy rates on selected streets in Victoria Island [%] 42 42 36 26 16 18 10 12 9. 8 4 Karimu Ikotun Elsie Femi Kofo Abayomi Pearce Cooper Probyn Glover Cameron Idejo Akinolugbade Lugard Raymond Njoku Going forward the high interest rate environment will continue to take its toll on the sector. With residential properties being converted into office space, possibly creating a new glut of properties in the commercial real estate space. Source: FDC, Lagos Business School, @BigldeasNG * as a percentage of total residential property stock for the area Infographic designed by @DataVisualNG SEPTEMBER 2012