Why cheap land won’t make Lagos, Abuja homes affordable—Developer

Developers warn that lower land prices in Lagos and Abuja won't automatically make housing affordable. Michael Onyeachor, co-founder of Besitz Group Limited, explained this during a discussion with Nairametrics. He said developers must still shoulder infrastructure, construction, and financing expenses. Onyeachor highlighted that while cheaper land in emerging areas can be offset by infrastructure investments, high development costs make luxury housing more commercially appealing.

He noted that the economics of affordable housing have become tougher, especially in Lagos and Abuja, where land values and development costs are high. Onyeachor suggested government support such as concessionary land, infrastructure, tax incentives, cheaper financing, and public-private partnerships could aid affordable housing projects.

Investors are now evaluating locations based on their potential over the next five to 10 years, not just their current state. In Abuja, areas like Kuje, Idu, Apo-Tafyi, Kabusa, and Karsana are attracting interest, while Lagos developers are increasingly targeting the Lekki-Epe axis and other expanding corridors. However, Onyeachor stressed that cheap land can stay cheap if infrastructure and economic activity don't follow.

He emphasized the need for roads, drainage, electricity, water, schools, healthcare, transport links, and job opportunities to transform emerging areas into viable residential markets. Without these, affordable housing could end up farther from established areas, increasing commuting distances and accessing jobs and services. Previous Nairametrics interviews revealed a growing preference for higher-value residential projects and the financial challenges faced by developers of lower- and middle-income housing.

Temitope Runsewe, Managing Director of Sage Grey Group, mentioned developers are seeking financing for prime projects in Ikoyi, Victoria Island, and Lekki. This context supports Onyeachor's argument that it's development costs, not just land prices, that shape the types of housing private developers can deliver. Lagos' affordability issue is compounded by a relatively low homeownership rate, with 31% of residents owning homes and 51% living in rented accommodations.

This situation, driven by high land values in areas like Ikoyi, Victoria Island, and Lekki Phase 1, underscores that cheaper land alone won't create genuinely affordable homes without the necessary infrastructure and financial support.