Why Lagos developers are chasing prime housing—Sage Grey MD

Temitope Runsewe, the Managing Director of Sage Grey Group, revealed that developers are increasingly seeking financing for housing projects in prime areas of Lagos, including Ikoyi, Victoria Island, and Lekki. This trend is attributed to the rise in middle-class income, as highlighted by the strong returns of companies like MTN, which indicate sustained spending power in certain sectors of the economy.

Runsewe made these remarks during the company's 10th anniversary news conference, noting that developers are facing growing demand for housing alongside rising affordability pressures in these affluent regions. The Managing Director expects the current pattern to change over the next two years due to increasing housing costs making prime locations less affordable for middle-income earners.

As a result, developers are anticipated to shift their focus towards the edges of Lagos and along major transport corridors in response to these affordability constraints. The concentration of developer financing in prime Lagos locations is also driven by the city's rising land, construction, and financing costs, which are making residential development increasingly expensive.

Experts suggest that lower financing costs, tax incentives, and faster approvals could make affordable housing more commercially viable for private developers. They also predict that vertical development will become more important in Lagos due to limited land supply and increasing housing demand, particularly in key areas such as Ikoyi, Victoria Island, Oniru, and Lekki Phase 1.

With a homeownership rate of 31% and 51% of residents living in rented accommodation, Lagos' high land values are attributed to strong demand for prime locations, limited land supply, and existing infrastructure gaps.