Is buying a property in Victoria Island a good investment?

Last updated on December 14, 2023

Yes, the analysis of Lagos' property market is included in our pack

If you've marveled at the seaside views and upscale living on Victoria Island, you may have thought about securing a property here, creating your luxurious and dynamic residence in Lagos, Nigeria.

Is it a good idea though? What's the current state of the real estate market in that area? Are property values appreciating or depreciating? Are investors seeing returns on their real estate investments? How's the demand for rentals?

We'll answer all these questions for you! When building and updating our property pack for Nigeria, our team has been researching and surveying this area. In fact, there is significant customer interest in investing there. Therefore, we believe it would be beneficial to include some information about it in our property pack.

Why do property buyers like investing in Victoria Island?

Victoria Island in Lagos stands out as a highly sought-after location for property buyers, and there are several reasons for this appeal.

One of the main attributes that sets Victoria Island apart from other real estate markets is its unique blend of commercial and residential developments. This area is known for its upscale residential neighborhoods, as well as a bustling commercial scene.

Hosting a variety of businesses, including multinational corporations, high-end retail stores, and luxury hotels. This combination is somewhat rare in Lagos, where many areas are predominantly residential or commercial.

Comparatively, other areas in Lagos might not offer this balanced mix. Areas like Ikeja are more commercial, while regions like Lekki are primarily residential. Victoria Island strikes a unique balance, offering the convenience of living in close proximity to workplaces, high-end shopping centers, and entertainment options.

The popularity of Victoria Island began to soar in the late 20th century, especially as Lagos expanded and the demand for premium living and business spaces increased. It became a symbol of status and luxury, attracting affluent individuals and businesses.

The ongoing development and influx of international businesses have sustained its popularity. The demand for property in Victoria Island is expected to remain high due to its strategic location, continued development, and status as a commercial hub.

The type of people attracted to Victoria Island are usually affluent, including business professionals, expatriates, and high-income families.

They are drawn by the high standard of living, the availability of luxury amenities, and the prestige associated with residing in one of Lagos's most exclusive areas.

However, like any area, Victoria Island has its drawbacks. The cost of living and property prices are significantly higher than in most other parts of Lagos, making it inaccessible to a large portion of the population.

Traffic congestion can be a major issue, particularly during rush hours, as the island is a key commercial area. Additionally, the area is prone to flooding, especially during the rainy season, which can be a concern for residents and businesses alike.

In essence, while Victoria Island boasts a unique blend of luxury, convenience, and business opportunities, it also comes with challenges such as high costs and infrastructural issues.

These factors combined make it a distinctive and continuously popular choice for a certain segment of Lagos's population.

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Why is Victoria Island a nice place to live?

Victoria Island is often regarded as a desirable place to live, largely due to its vibrant lifestyle and cultural offerings.

The lifestyle here is cosmopolitan, reflecting a blend of various cultures and backgrounds. This diversity is particularly evident in the food, entertainment, and social scenes.

You'll find an array of restaurants serving international cuisine, alongside local Nigerian dishes, catering to the varied tastes of its residents.

The expatriate community in Victoria Island is quite significant, adding to the area's diverse and international feel. Many expats are drawn here due to the presence of multinational corporations and foreign embassies.

This international presence contributes to a multicultural environment, where different traditions and customs are embraced.

Living in Victoria Island, however, does come with a high cost. It's one of the more expensive areas in Lagos, reflected in the cost of housing, goods, and services. This high cost is a trade-off for the area's amenities, safety, and lifestyle.

Safety is a key consideration for many residents, and Victoria Island is known to be one of the safer parts of Lagos. It has better security measures compared to other areas, with private security services being common in residential and commercial premises.

In terms of amenities, Victoria Island is well-equipped. It hosts some of the best schools in Lagos, like the American International School of Lagos and the British International School, providing top-notch education.

Healthcare facilities are also commendable, with well-known hospitals like St. Nicholas Hospital and Eko Hospital offering quality medical services.

For shopping and leisure, there are numerous options, including the Palms Shopping Mall, which houses a variety of international and local retail stores.

The quality of infrastructure in Victoria Island is generally better than in many other parts of Lagos. The roads are relatively well-maintained, although traffic congestion can be a problem, especially during peak hours.

Utilities like electricity and water supply are more consistent here, and internet connectivity is generally reliable, catering to the needs of both businesses and residents.

Accessibility is another advantage of living in Victoria Island. It's well connected to other parts of Lagos, including the mainland, via major roads and bridges, making commuting relatively easier.

For international travel, the Murtala Muhammed International Airport is not too far, although the travel time can vary significantly depending on traffic.

Public transportation options are available, including buses and taxis. Many residents prefer using personal vehicles or ride-hailing services due to the convenience and comfort they offer, especially considering the sometimes erratic nature of public transport.

How much does it cost to buy real estate in Victoria Island?

If you need a detailed and updated analysis of the prices, rents and yields, you can get our full guide about real estate investment in Nigeria.

Buying property in Victoria Island can be a significant investment, and the cost varies depending on several factors.

The area offers a range of residential properties, including apartments, detached houses, and luxury villas. These properties cater to a diverse group of buyers, from young professionals to affluent families and business executives.

In Victoria Island, there's a particularly high demand for luxury apartments and villas, reflecting the upscale nature of the neighborhood. These properties are favored for their modern amenities, security, and often, exclusive locations.

The demand is driven by both the local affluent population and expatriates who seek comfort, convenience, and a sense of community.

Regarding the market composition, Victoria Island features a mix of new developments and resale properties. New developments are usually high-end, catering to the increasing demand for luxury accommodations.

These often come with additional amenities like swimming pools, gyms, and 24-hour security services.

The price range for properties in Victoria Island is quite broad, but it's generally on the higher end compared to other areas in Lagos. Prices per square meter can vary significantly based on the property type, location, and amenities.

For instance, a luxury apartment or villa can command a much higher price per square meter compared to a standard apartment.

However, as a general indication, prices in Victoria Island can range from several hundred thousand to millions of Naira per square meter.

Over recent years, property values in Victoria Island have seen a steady increase. This trend is driven by the area's continued development, its status as a commercial and residential hub, and the general demand for high-quality living spaces in Lagos.

Looking ahead, there are several factors that could influence the real estate market in Victoria Island. New developments and city planning changes, like improved infrastructure or new commercial projects, could significantly impact property values.

For instance, any new luxury residential development or upscale commercial project could drive up property prices in the surrounding areas.

Predicting the future of the real estate market in Victoria Island, it's likely that property values will continue to rise, albeit at varying rates. This prediction is based on the ongoing demand for high-end properties, the strategic importance of Victoria Island in Lagos, and the continuous influx of businesses and affluent individuals.

Several indicators suggest a potential increase in property value. These include the ongoing development of luxury properties, improvements in infrastructure, and Victoria Island's status as a desirable location.

Additionally, any future plans for city development that enhance connectivity or add to the area's amenities could further boost property values.

Where is the best area to buy a property in Victoria Island?

When considering the best area to buy property in Victoria Island it's important to understand that the island is diverse, with different parts offering varying atmospheres, property types, and prices.

The choice of where to buy ultimately depends on your personal preferences, budget, and the purpose of the investment.

Victoria Island is generally known for its upscale and cosmopolitan vibe. Some parts of the island are more bustling, lined with commercial buildings, luxury hotels, and high-end retail outlets. These areas are typically lively and are suited for those who enjoy being at the heart of urban activity.

Other parts are more residential, offering a quieter and more relaxed atmosphere, ideal for families or those looking for a peaceful living environment.

Property types across Victoria Island vary greatly. You'll find everything from luxury high-rise apartments and penthouses to more traditional houses and villas. The prices of these properties also vary significantly, with the most luxurious and well-located ones commanding premium prices.

As for up-and-coming areas within Victoria Island, certain neighborhoods have been gaining attention due to new developments and improvements in amenities. These areas might be particularly attractive to buyers looking for properties with potential for appreciation.

However, specific names of these areas are dynamic and subject to change based on ongoing development and market trends.

When looking for a property, it's wise to consider areas that are well-established, have good infrastructure, and offer a balance of residential comfort and access to amenities.

These areas are typically more stable in terms of property value and offer a higher quality of life. They are often preferred by families and professionals who value convenience and a higher standard of living.

On the contrary, areas that are overly congested, have poor infrastructure, or are prone to flooding should be approached with caution.

Such locations might offer lower property prices, but they could also come with challenges like traffic congestion, inadequate utilities, and lower overall quality of life.

Additionally, these areas might not offer the best return on investment due to these drawbacks.

Here is a summary table to help you visualize better. If you need more detailed data and information, please check our property pack for Nigeria.

Area	Atmosphere	Property Types	Price Range	Notes
Commercial Hub Areas	Bustling, Urban	Luxury Apartments, High-rise Buildings	High	Great for those who enjoy urban activity
Residential Areas	Quiet, Relaxed	Houses, Villas	Variable	Ideal for families and peaceful living
Up-and-Coming Areas	Developing	Modern Apartments, New Developments	Moderate to High	Potential for property value appreciation
Areas with Challenges	Congested, Infrastructural Issues	Varied	Lower	May face issues like flooding, traffic congestion

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Is there a strong rental demand in Victoria Island?

Victoria Island indeed experiences a strong demand for rental properties.

The nature of this demand varies, encompassing both short-term and long-term rentals, each catering to different demographics and needs.

For short-term rentals, the demand is largely driven by business travelers and tourists. Victoria Island, being a commercial hub with numerous multinational corporations, embassies, and luxury hotels, attracts a significant number of international visitors.

These visitors often seek short-term accommodations that offer convenience and a high standard of living, comparable to what they're accustomed to in their home countries.

In terms of long-term rentals, the demand comes primarily from expatriates, professionals, and affluent locals. These individuals or families are often associated with the businesses and embassies located on the island.

The profile of potential tenants usually includes business executives, diplomats, and high-earning professionals who seek comfortable and secure living arrangements for themselves and their families.

The type of properties in high demand for these tenant profiles are typically well-appointed apartments, luxury condos, and upscale houses. Features such as modern finishes, spacious layouts, and access to amenities like swimming pools, gyms, and secure parking are highly sought after.

Properties that offer these features, along with good security and proximity to business centers, are especially attractive.

Specific areas within Victoria Island that are popular for rentals include neighborhoods close to the business district, where many of the offices and embassies are located. These areas offer the convenience of reduced commute times, which is a significant factor for many tenants.

Amenities that can help to reduce vacancy rates and make a property more attractive include reliable security services, well-maintained common areas, power backup systems, and high-speed internet access.

In a city like Lagos where power outages and security concerns are prevalent, these amenities provide peace of mind and added value for tenants.

Regarding potential returns on investment, properties in Victoria Island can offer lucrative yields, especially when managed well and marketed to the right demographic. Rental yields can vary, but properties in prime locations with high-demand amenities often yield higher returns.

For instance, well-maintained and strategically located properties can potentially offer annual rental yields of a significant percentage, which is attractive compared to many other real estate markets.

In terms of property types gaining increasing demand, luxury apartments and condos with modern amenities are becoming more popular. These properties cater to the growing number of affluent professionals and expatriates in Lagos who seek comfort, convenience, and security.

Consequently, these types of properties could potentially offer better yields in the future, given the evolving demographics and preferences in Victoria Island's rental market.

Overall, the rental market in Victoria Island is dynamic and offers various opportunities for investors, with a strong demand from both short-term and long-term renters.

Targeting the right tenant profile with the right type of property in the right location is key to maximizing the potential returns on investment.

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Is it easy to buy a property as foreigner in Victoria Island?

Before we answer the question, please know that we have an article dedicated to the experience of buying real estate as a foreigner in Nigeria.

Buying property in Victoria Island, Lagos, as a foreigner involves navigating specific regulations and understanding the local real estate market's nuances.

While it's possible for foreigners to purchase property in Nigeria, there are certain considerations and steps that need to be taken.

Firstly, there are regulations that foreign buyers must be aware of. In Nigeria, the Land Use Act is a key piece of legislation governing land ownership. This Act vests all land within a state in the state's Governor and land is typically leased rather than owned outright.

Foreigners can acquire land leases, which usually last for 99 years, but they must go through all the legal channels to ensure their investment is secure.

The purchasing process in Victoria Island involves several steps, starting with identifying a suitable property. Once a property is selected, a price negotiation follows. After agreeing on a price, it's crucial to conduct a thorough due diligence process.

This includes verifying the title of the property, ensuring there are no encumbrances, and confirming that all necessary planning permissions and approvals are in place.

One of the primary risks associated with property investment in Victoria Island, especially for foreigners, is navigating the legal and bureaucratic landscape. There can be issues with unclear land titles, and property scams are not uncommon.

Foreign investors should be particularly wary of deals that seem too good to be true or where sellers are overly pushy.

A common pitfall is not adequately verifying the authenticity of property documents. In Nigeria, cases of fraudulent land sales and disputes over land ownership are not unusual.

Therefore, it's essential to ensure that the property's title is clear and valid. Another unique aspect to be mindful of is the 'Omo Onile' issue.

A local term referring to indigenous landowners who sometimes create problems or demand additional payments during construction or development.

Working with a local real estate agent and a lawyer is extremely important. A reputable local agent can provide valuable insights into the market, help identify properties, and assist in negotiations.

A lawyer, on the other hand, is crucial for conducting due diligence, verifying property documents, and ensuring that all legal requirements are met. They play a key role in protecting your investment.

Common exit strategies for property investors in Victoria Island include selling the property after a period of appreciation or renting it out. The rental market in Victoria Island is robust, thanks to the high demand from expatriates and professionals working in the area.

However, selling a property can be more challenging and may require a good understanding of the local market dynamics to achieve a profitable sale.