Yes, the analysis of Lagos' property market is included in our pack
The question of 'the best neighborhood to buy a property in Lagos' does not have a one-size-fits-all answer.
Some of you are buying to live there, while others want to make the best investment possible. Individual preferences and circumstances matter.
That’s why the article below is covering every intent.
At TheAfricanvestor, when we write a blog post or when we update our our property pack for Nigeria, we want to bring solutions and cover different aims in a clear and organized way.
Enjoy the read, and please remember that we are not financial or investment experts. This article is for informational purposes only.
To improve the readability and user-friendliness of this article, we will categorize neighborhoods in Lagos into various groups, including budget-friendly options, emerging hotspots, and areas with high rental demand, among others. Consequently, some neighborhoods may appear in multiple categories and be mentioned several times throughout the article.
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How is the real estate market in Lagos?
The real estate market in Lagos, Nigeria, is a vibrant and dynamic one, reflecting the city's unique strengths and allure.
Lagos stands out not only as Africa's most populous city but also as a hub of commerce, culture, and innovation. This uniqueness is one of its primary draws for real estate investors and home buyers alike.
One of the city's most distinctive features is its status as a coastal megacity, with a unique blend of urban and waterfront living. This is not common in many African cities, and it offers a lifestyle that combines the hustle and bustle of city life with the tranquility of coastal living.
The presence of luxury waterfront properties, alongside bustling commercial districts, makes Lagos uniquely appealing.
Buyers in Lagos's real estate market are diverse, ranging from local business professionals to international investors. The city's robust economy, driven by its status as Nigeria's financial center and a major African economic hub, is a significant pull factor.
It's a place where both the aspiring middle class and affluent individuals see opportunities for growth and investment.
Foreign interest in Lagos’s real estate is high due to its potential for economic growth and development. Lagos is seen as a gateway to the Nigerian and West African markets, making it an attractive destination for foreign businesses and investors. This international attention adds a layer of dynamism to the market.
Speaking of dynamism, one data point that underscores this is the consistent rise in property values in prime areas of Lagos.
Despite economic fluctuations, prime locations like Victoria Island and Ikoyi have seen a steady increase in property values, underscoring the city's resilience and growth potential.
A unique and positive aspect of properties in Lagos is their increasing focus on sustainable and smart city features. In response to urban challenges, new developments are incorporating innovative solutions like green energy and smart technology, making Lagos properties not just places to live but also investments in a sustainable future.
The ongoing infrastructural developments, like the Eko Atlantic City project, are set to redefine urban living in Africa.
Additionally, Lagos's growing status as a tech and innovation hub attracts a skilled workforce, which in turn drives demand for housing.
Moreover, the city's cultural vibrancy and diversity make it an ever-appealing destination for both domestic and international buyers.
Top neighborhoods in Lagos to consider for living
Areas in Lagos that are budget-friendly
If you're looking to buy property in Lagos on a budget, there are a few neighborhoods you might want to consider.
Here is a summary table. Below, we will give more details.
| Neighborhood | Affordability | Average Price | Property Type | Potential for Value Increase | Challenges |
|---|---|---|---|---|---|
| Badagry | Cheapest | ₦21,930,000 | 3-bedroom flat | Yes, as infrastructure improves | Poor road connectivity |
| Ogba | Affordable | Data not specified | 3-bedroom flat | Possible due to central location | High population density |
| Ojo | Affordable | ₦39,360,000 | 3-bedroom flat | Possible with development | Lacks world-class facilities |
Badagry
This area is one of the cheapest in Lagos, primarily due to its distance from Lagos Island.
However, living in Badagry can be challenging if you work far away because of the poor state of the only road linking to this area. Despite these drawbacks, the low property costs present a good opportunity for investment.
For instance, renting a standard 3-bedroom flat in Badagry costs about 400,000 Naira, and one-room apartments are even more affordable.
As infrastructure improves, property values here could rise. The average price for houses in Badagry is around 21,930,000 Naira.
Ogba
Located about five kilometers west of Ikeja, Lagos's state capital, Ogba is a densely populated area popular among low-income working-class citizens.
Its affordability is a major draw, along with its proximity to major Lagos cities, making it convenient for workers. The average cost for a 3-bedroom flat with basic amenities in Ogba is about 300,000 Naira.
Due to its central location and accessibility, property values in Ogba may increase as Lagos continues to grow and develop.
Ojo
Close to Badagry and somewhat far from the Island, Ojo is another budget-friendly area.
It lacks some world-class facilities, like steady electricity and good roads, but its affordability makes it attractive for those with a lower budget.
For example, a 3-bedroom flat in Ojo costs between 400,000 and 450,000 Naira.
The average house price in Ojo is approximately 39,360,000 Naira.
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Areas in Lagos that are popular and upscale
When looking to buy property in Lagos, three neighborhoods stand out as upscale and popular choices. These neighborhoods each have their unique character and draw different types of residents.
| Neighborhood | Average Price per Sqm | Resident Profile | Strengths | Weaknesses |
|---|---|---|---|---|
| Ikoyi | High | Affluent individuals, expatriates | Luxury properties, security, amenities | High cost of living, traffic |
| Victoria Island | Very High | Business professionals, elite | Commercial hub, lifestyle | Flooding, congestion |
| Lekki Phase 1 | Moderate to High | Upper-middle class, young professionals | Modern housing, amenities | Flooding, busy |
Ikoyi
Ikoyi stands as one of Lagos' most expensive and prestigious neighborhoods.
Its properties are high-end, often featuring luxury apartments and sprawling estates. The average price per square meter in Ikoyi is quite steep, reflecting its status as a haven for affluent individuals, including expatriates and high-ranking professionals.
The area boasts excellent amenities, security, and serene, well-planned environments. However, the cost of living is high, and traffic can be challenging during peak hours.
Ikoyi's charm and status are expected to persist, maintaining its hype in the property market.
Victoria Island
Victoria Island is synonymous with opulence and business.
It's not just residential; it's a commercial hub, housing numerous multinational corporations, high-end restaurants, and entertainment spots in Victoria Island.
This mix of business and luxury living drives property prices up, with high demand for both commercial and residential spaces. The area is popular among business professionals and the elite.
Its strengths lie in its vibrant lifestyle and central location, but it faces issues like flooding and traffic congestion. Despite these, Victoria Island's appeal as a prime location is likely to endure.
Lekki Phase 1
Lekki Phase 1 is known for its modern aesthetics, with a range of properties from mid-range to luxury.
It's popular among the upper-middle class and young professionals. The area is still developing, which keeps the prices slightly more accessible than Ikoyi or Victoria Island, but they are steadily rising.
Lekki offers a blend of residential comfort and commercial activity. Its major draws are the contemporary housing, shopping malls, and entertainment, but it struggles with flooding and can be quite busy.
Its ongoing development suggests that it will remain a sought-after area.
Make sure you understand the real estate market in Lagos
Don't rush into buying the wrong property in Nigeria. Sit, relax and read our guide to avoid costly mistakes and make the best investment possible.
Areas in Lagos that emerge as new hotspots
Let's explore these emerging neighborhoods in Lagos that, according to our local partners and our customers, are getting quite a bit of buzz lately.
| Neighborhood | Current Price Trend | Resident Profile | Strengths | Weaknesses |
|---|---|---|---|---|
| Yaba | Rising | Tech professionals, students | Tech hub, accessibility | Infrastructural challenges |
| Surulere | Increasing | Young families, professionals | Cultural diversity, location | Traffic, planning issues |
| Magodo | Gradually Increasing | Middle to upper-middle-class | Serenity, security | Water shortages, limited commerce |
Yaba
Initially a mainly residential area with a modest profile, Yaba is transforming into a tech hub, attracting startups and young entrepreneurs.
This evolution has made it increasingly trendy, especially among tech professionals and students, due to its proximity to several universities. Prices are more affordable compared to upscale areas in Yaba, but they're rising as the area develops.
Yaba's strengths include its growing tech ecosystem and accessibility, but it still grapples with infrastructural challenges.
Its trajectory suggests a bright future, continuing to attract a younger, dynamic crowd.
Surulere
Surulere has always been known for its cultural diversity and as a residential middle-class neighborhood.
Recently, it's gaining attention for its strategic location and relatively affordable housing. The area is becoming popular with young families and professionals who seek a balance between affordability and accessibility to the city's central parts.
Its main appeal lies in its community feel and cultural richness. However, Surulere deals with issues like traffic and inadequate urban planning.
Its ongoing gentrification hints at a steady rise in popularity and property value.
Magodo
Magodo, once a quiet residential area, is now catching the eyes of property investors due to its serene environment and growing infrastructure.
It's drawing in middle to upper-middle-class families and professionals looking for a peaceful yet connected lifestyle. The property prices in Magodo are lower than in the premier neighborhoods but are gradually increasing.
Magodo's strengths are its tranquility and improved security, but it faces challenges like occasional water shortages and limited commercial activities.
Its growth trajectory indicates a sustained rise in interest and value.
Make a profitable investment in Lagos
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Top neighborhoods in Lagos to invest in property
Areas in Lagos with a strong rental demand
If you're considering buying real estate in Lagos for renting it out, these neighborhoods with high demand for rentals should be considered.
| Area | Demographic | Property Type | Rental Income Range (Annual) | Rental Yield | Notable Features |
|---|---|---|---|---|---|
| Victoria Island | Wealthy professionals, expatriates | Upscale apartments, houses | ₦3M - ₦5M | 5-7% | Near business hubs, sea views |
| Lekki Phase 1 | Middle to upper-middle class, young professionals | Detached houses, apartments | ₦2M - ₦3.5M | 4-6% | Close to Lekki-Epe Expressway, gated communities |
| Ikeja | Families, business professionals, government employees | Residential and commercial properties | ₦1.5M - ₦2.5M | 4-5% | Near major roads, commercial areas |
Victoria Island
Victoria Island is a prime area in Lagos, known for its luxurious lifestyle and high-end properties, making it attractive to wealthy professionals and expatriates.
Tenants in Victoria Island often seek upscale apartments or houses, with a preference for modern amenities like swimming pools, gyms, and security services. The rental income can be quite high in Victoria Island, with a two-bedroom apartment potentially fetching between ₦3 million to ₦5 million per year.
The rental yield in Victoria Island averages around 5-7%, depending on the property's location and quality. To maximize rental income, focus on properties near business hubs or with sea views, as these are highly coveted.
However, be aware that high property prices and maintenance costs can affect profitability. The area can also be prone to flooding, so properties with good drainage systems are preferable.
Lekki Phase 1
Lekki Phase 1 is popular among middle to upper-middle-class families and young professionals due to its modern infrastructure and proximity to business districts.
The area is in demand for detached houses and apartments, with tenants favoring properties that offer good security, reliable power supply, and proximity to good schools and shopping centers.
Rental income for a three-bedroom apartment ranges from ₦2 million to ₦3.5 million annually. The rental yield in Lekki Phase 1 is around 4-6%.
Properties closer to the Lekki-Epe Expressway or those in gated communities often yield higher rents and less vacancy. However, traffic congestion and occasional flooding are drawbacks to consider.
Ikeja
Ikeja is the state capital and a bustling commercial hub, attracting a diverse group of tenants, including families, business professionals, and government employees.
In demand are both residential and commercial properties, with a preference for well-maintained apartments and duplexes.
A standard three-bedroom apartment in Ikeja can generate about ₦1.5 million to ₦2.5 million in rental income per year, with a rental yield of approximately 4-5%.
Properties near major roads or commercial areas like Allen Avenue or GRA Ikeja tend to have higher rental income and lower vacancy rates. The area's weaknesses include traffic congestion and noise pollution.
Don't lose money on your property in Lagos
100% of people who have lost money in Nigeria have spent less than 1 hour researching the market. We have reviewed everything there is to know. Grab our guide now.
Areas in Lagos where property prices might increase in the future
In these areas in in Lagos you can still find properties at a reasonable price, with room for appreciation as the neighborhoods develop.
| Neighborhood | Property Type in Demand | Average Price per Night | Tips for Higher Income | Weaknesses |
|---|---|---|---|---|
| Ikoyi | High-end apartments, serviced residences | ₦40,000 - ₦100,000 | Unique features, waterfront views | High maintenance cost, competitive market |
| Eko Atlantic City | Luxury apartments, condos | ₦30,000 - ₦80,000 | Technological advancements, sustainable features | Emerging market dynamics |
| Osborne Foreshore Estate | Furnished apartments, townhouses | ₦25,000 - ₦50,000 | Waterfront views, proximity to leisure spots | Residential policies, traffic |
Ikoyi
Ikoyi is an affluent neighborhood attracting tourists and business travelers seeking luxury and comfort.
Short-term rentals in Ikoyi are often high-end apartments or serviced residences with amenities like swimming pools, gyms, and 24-hour security. The clientele includes diplomats, high-ranking professionals, and tourists seeking upscale accommodations.
The average price per night in Ikoyi can range from ₦40,000 to ₦100,000, depending on the property's quality and amenities. For higher rental income, focus on properties with unique features, such as waterfront views or exclusive facilities.
However, the high cost of maintenance and the competitive market are challenges to consider.
Eko Atlantic City
As a new, futuristic city development off the coast of Victoria Island, Eko Atlantic City is becoming a hotspot for short-term rentals, attracting tourists, expatriates, and business travelers.
Properties in Eko Atlantic City are modern, with state-of-the-art facilities. Tenants in Eko Atlantic City are typically looking for luxury apartments or condos with amenities like high-speed internet, smart home features, and proximity to business areas.
Prices per night in Eko Atlantic City can vary from ₦30,000 to ₦80,000. To capitalize on this market, invest in properties with technological advancements and sustainable features.
However, the area's novelty means it may take time to establish a consistent rental market.
Osborne Foreshore Estate
Located in Ikoyi, Osborne Foreshore Estate is a residential area favored by short-term renters for its serene environment and security.
The demand in Osborne Foreshore Estate is mainly for well-furnished apartments or townhouses. This area attracts a mix of business travelers and tourists looking for a quiet, secure place. Average nightly rates in Osborne Foreshore Estate range from ₦25,000 to ₦50,000.
Properties with waterfront views or in close proximity to leisure spots tend to command higher prices. To increase rental income, focus on tastefully furnished properties with modern amenities.
However, the area’s strict residential policies and occasional traffic bottlenecks are potential downsides.
Make sure you understand the real estate market in Lagos
Don't rush into buying the wrong property in Nigeria. Sit, relax and read our guide to avoid costly mistakes and make the best investment possible.