According to economic statistics, the Nigerian economy is experiencing high inflation, slow growth, and high unemployment rates, with 1 USD equaling 410 Nigerian Naira. Despite this, there are rich Nigerians who are buying expensive and luxurious properties in Nigeria. During the pandemic, most people did not spend their money on extraneous expenses, leaving them with a large sum of money with which to invest in real estate.
Timothy Nubi, a real estate management professor at the University of Lagos, says the Nigerian government ought to concentrate on driving its investment in affordable housing in a city with a housing deficit of over 2 million units in which 2/3 of residents live in slums, according to UN estimations. According to Nubi, there is a mismatch in the Nigerian property market. He adds and says that what’s coming to the market is not actually what people need.
This is a problem similar to the one found in Kenya. According to UN estimates on house deficit, it created a perception in investors that by constructing houses they will profit from. However, this was not the case as there was a bit of debate about the UN’s findings. This resulted in bringing about more supply to the market that couldn’t match the demand. During the pandemic, the majority of these investors decided to sell their properties at auction because the real estate market was sluggish in comparison to previous years.
About the Nigerian property
Just over the water from Lagos’ bustling mainland, real estate developers on posh Banana Island are selling million-dollar luxury flats decked out in black, cream, and gold.
“What we sell is quality,” said Sijibomi Ogundele, 40, Chief Executive Officer of real estate developer and construction firm Sujimoto, swinging his hand around an apartment in the Giuliano di Medici apartment building.
“This design is among of the most expensive in the globe,” he says of the Zaha Hadid-designed bathtub in the master bathroom.
The view from Giuliano’s balcony is of other residential complexes that Sujimoto is erecting, past an empty lot filled with construction materials and a pair of lethargic, big-horned bulls. The Lucrezia, a fourteen-story waterfront luxury project under development with flats starting at $1.9 million, has a private Imax theatre. The Leonardo, a twenty-five-story facility nearby, boasts more than 20 swimming pools and a virtual indoor golf bar.
Money Laundering in Real Estate
Many wealthy people use money laundering to force them to clean up their illegal businesses. Some observers wonder who will live in all of these new houses, especially given the many current apartment complexes in the Lekki and Ikoyi neighborhoods, which are only 30-40% full.
The answer, according to Timothy Nubi, is that it may not really matter, given how valuable real estate is as a laundry service for filthy money.
“There’s one school of thinking that it’s a technique of keeping capital by those who do not have the option of transferring their money abroad or putting it in the bank. They just put their money in property and expect to sell it years later. It is completely insane. You can drive around Ikoyi and see the entire left side of a street with vacant buildings. “
Abdulrasheed Bawa, the head of Nigeria’s Economic and Financial Crimes Commission, told Channels TV that investors do 90-100% of money laundering in real estate.