Shagati:

Sagamite

What I can deduce from your dafter-than-daft analysis is that no should buy a house in Nigeria anymore thus we should all move to Dartford right?

You have succeeded in comparing apples and oranges because I see no convergence at all in your argument - Dartford vs Shangisha?

But then, we are all cows aint it? (Re: herd mentality)

What you deduced is what is actually the dafter-than-daft interpretation.

The convergence in my argument is:

[list]
[li]If you live abroad, it makes sense to just invest that kind of money in an equivalently priced property in the West rather than the crap I am seeing above.[/li]
[li]If you are based in Nigeria, either it is best you build from scratch or you do the same as that above (buy abroad) and rent instead in Naija than be buying such load of crap for £210K.[/li]
[/list]

Sagamite:

What you deduced is what is actually the dafter-than-daft interpretation.

The convergence in my argument is:

[list]
[li]If you live abroad, it makes sense to just invest that kind of money in an equivalently priced property in the West rather than the crap I am seeing above.[/li]
[li]If you are based in Nigeria, either it is best you build from scratch or you do the same as that above (buy abroad) and rent instead in Naija than be buying such load of crap for £210K.[/li]
[/list]

Easy! Easy! Sofry Sofry

Might be ok with someone else.

@ Sagamite,

I understand your analysis and see the sense in what you are saying. On the other hand, there are those of us who have bought/will buy a home for a price like that or higher for reasons such as but not limited to:

Tax-free rental income
A place of abode in a neighborhood of our own choosinig should we/when we relocate back home

One man's meat is another man's poison, has nothing to do with herd mentality.

I agree the price is not cheap but I'd bet it's comparable to similar housing in that neighborhood and don't forget that it's still negotiable just like we have in the west.  What we've seen over the last few years is massive price appreciation particularly in Lagos and yes, prices are significantly more than the best we see in the world's largest cities. Sadly for people looking to buy, that's the reality of the real estate market in Lagos today.

@ Shagati

You displayed patience in your responses to BB and promise72 on the previous page, pls continue in the same vein.

wwheelz:

@ Sagamite,

I understand your analysis and see the sense in what you are saying. On the other hand, there are those of us who have bought/will buy a home for a price like that or higher for reasons such as but not limited to:

Tax-free rental income
A place of abode in a neighborhood of our own choosinig should we/when we relocate back home

One man's meat is another man's poison, has nothing to do with herd mentality.

I agree the price is not cheap but I'd bet it's comparable to similar housing in that neighborhood and don't forget that it's still negotiable just like we have in the west.  What we've seen over the last few years is massive price appreciation particularly in Lagos and yes, prices are significantly more than the best we see in the world's largest cities. Sadly for people looking to buy, that's the reality of the real estate market in Lagos today.

@ Shagati

You displayed patience in your responses to BB and promise72 on the previous page, pls continue in the same vein.

Thanks, men. I get your point.

I just think houses like this are way over-priced when compared to other properties abroad of equivalent price which look better and are probably built to a higher standard.

The reason these houses are priced so highly is because of poor governance and planning. Once someone like Fashola can build and improve the local transportation system (e.g. taking 35mins to travel from Badagry to VI) and getting rid of ghettos to provide appropriate accommodation then these houses will not be worth that much as we will be opening new grounds for property hence increasing supply and hopefully the government managing demand (if you can't afford Lagos, get out). At the moment, there is a concentration of places where people want to live (ala VI, Ikoyi, Ikeja, Gbagada, Magodo, Ogudu etc) because of access to key places. A more reliable transport system will breakdown these barriers and widen people's horizon of potential locality of abode.

Uneducated speculative buying might still contribute to artificial high prices but I will expect that to erode over time as reality kicks in on speculators (if Fashola continues as planned) and they realise they are house rich but cash poor. Those are the herd mentalities I am referring to, and are most likely going to be burnt by the market.

Despite all these said, just looking at the picture of this house and considering the present supply environment, I still find it hard to believe the house is on the market for over N30m.

@ Sagamite

https://www.nairaland.com/nigeria/topic-179231.0.html#msg2896017

wwheelz:

@ Sagamite

https://www.nairaland.com/nigeria/topic-179231.0.html#msg2896017

Thanks, men. So it shows I am not the only one feeling so. 

Lucabrasi said it all in his first entry on that thread.

I remember telling people in the UK that they will get burnt with their herd mentality of going to buy Nigerian shares as the price were over-bloated and the returns promised is unsustainable, they refused to listen. Dem no fit look my face now as dem don lose money.

Wow, check out grown folks having a matured debate as opposed to shameless old boars who jerks off from having argument with women

Busy_body:

Wow, check out grown folks having a matured debate as opposed to shameless old boars who jerks off from having argument with women

It is all your fault, did you let them know I was your masteress and I wouldn't let anyone talk to you like that?

wwheelz:

@ Shagati

You displayed patience in your responses to BB and promise72 on the previous page, pls continue in the same vein.

Quite right you are Wheelz

Sag, I apologise for my outburst. I feel your disgust with the system which says that a 600sqm plot of land on Glover Road Ikoyi is more expensive than a fully built 4-bed luxury bungalow in Cape-Town but have you seen the latest price list for Governor's Consent for property? NGN20m for Magodo and NGN50m for Ikoyi (Moderator please correct me if I'm wrong)
The property situation in Lagos in my own opinion is not about to take a nose-dive as experts predict. Why? Simple Economics of demand and supply

Shagati:

Simple Economics of demand and supply

You have a population of 15-17 million inhabitants jostling for the few available decent neighbourhoods to live with easy access to place of vocation
Of this number, you have an ever expanding middle class that wants a departure from living conditions of the past
Add to this the willingness of finance institutions to make funds available for these acquisitions

What you have is a recipe for the situation we find ourselves in right now.

Infrastructure?
It takes about an hour to commute from Dartford to Picadilly Circus (Am I right?). A similar distance during rush hour in Lagos would be looking at circa 2.5-3 hours. So instead of paying NGN300k for a 3-bed apartment in Dartford (pun!), I would willingly pay NGN900k for a bed-sit in somewhere like Leytonstone to lessen my pains.

Are you beginning to get my argument in favour of crazy costs for property and rent in infrastucture-lacking Lagos?

Yours and any comments are welcome

Shagati

Shagati:

Quite right you are Wheelz

Sag, I apologise for my outburst. I feel your disgust with the system which says that a 600sqm plot of land on Glover Road Ikoyi is more expensive than a fully built 4-bed luxury bungalow in Cape-Town but have you seen the latest price list for Governor's Consent for property? NGN20m for Magodo and NGN50m for Ikoyi (Moderator please correct me if I'm wrong)
The property situation in Lagos in my own opinion is not about to take a nose-dive as experts predict. Why? Simple Economics of demand and supply

What is "Governor's Consent for property"?

What you have in Lagos is what I personally will term as "focussed" demand and supply. The demand is under-developed and concentrated in a few areas. I repeat, with good governance, if other areas (the rest of the state) are opened up through better transportation systems and improved neighbourhoods then we can talk in full terms of supply and demand.

Why will I, in future, pay a huge amount for a flat in VI when I can live in one of the nice 200 estates in Badagry that is equally nice where it takes me 40mins to drive to VI, 25mins to go by train and 30 mins by ferry? And in Badagry we have all the shops, cinemas etc built there as well. I might even decide to use the Beninoise international airport for my travels.

Badagry in that context could be replaced with Ibafo, Abeokuta, Shagamu, Ajah, Ipaja, Otta etc to tell the future state story.

Basically what I am saying is that the Lagos network is under-developed and when it is fully developed, there is a risk the demand for the assets in the high demand places will be eroded as there will be alternative sources to supply that demand. Hence a significant increase in supply, whilst demand growth is likely consistent.

The property situation might not be up for a nose-dive in the short-term, but if the government maintain the momentum of ideas, implementation and improvement as they currently have, it will in the long-term.

Believe me, I am an Expert as well.

Shagati:

The property situation in Lagos in my own opinion is not about to take a nose-dive as experts predict. Why? Simple Economics of demand and supply

Spot on !

funkybaby:

Spot on !

This is the same argument I had with my friend on the UK housing market by email in late 2007.

I can post you the personal exchange of emails if you want.

He went on about demand and supply, immigration of new members of the EU (Polish and other E-Europeans), London as the financial centre of the world, speculative buying. And that the only way for property in London was UP.

Guess what? . . . . . . . . . . I was right. Property prices have fallen close to 20% due to a lot of dynamics most people do not put into perspective when speculating on property.

Being me, I called him up in 2008 and asked him who was right and who was wrong.

Sorry, I couldn't resist. This is an extract of the exchanges of email when I replied him.

Yes, demand is outstripping supply.

Hence property owners (suppliers) are maximising on how much they are requesting as they have a wide option of buyers (demanders).

So let Handsome Clever ^{my nickname with friends} break it down like it is hot.

High Demand
This is spurred by the following:
-Availability of capital to purchase properties, almost always supplied by mortgage companies Has disappeared now, hence lower demand
-Attractiveness of Capital Gains from house pricesHas disappeared now, hence lower demand
-Low interest rates
-Growing population
-Debt tolerance Is disappearing now, hence lower demand

Low Supply
This is spurred by the following:
-Favourable legislation
-Low volumes of properties
-Family formations Changing as people are now moving back with parents or staying longer b4 moving out, hence more houses to satisfy demand

As we might all know, house prices are rising fast and are almost reaching 6 times multiples of average salary. As Ola Sky^{my friend} economist will tell you, there is some certain curve which I can't remember the name that demonstrates the threshold that you can price an item before you overprice to the point that your customer numbers would start dropping. I think house prices are reaching this levels that fewer people can afford them hence demand would stall or decrease at a point in time. If you buy just before that point, you might not gain much after you pay all the transactional costs or you might lose.

More rises might lead to:
-Mortgage capital providers refusing to back a large populace's application because their salary can not fund the mortgage (remember, salary rises is well below property rises) Damn, I was right. Now we hear of "responsible lending"

Already happening:
-Gordon Brown has already commisioned the increase in volume of properties
-Interest rates is being increased Oops!
-Debt levels are already being highlighted as too high, hence government might rain down on irresponsible lending (including mortgage lenders) Damn, I was right. Now we hear of "responsible lending"
-Pressure on government to act, hence we might see some policy changes that might mirror the close regulation we see in countries like France where property is not seen as much of a good investment despite the fact that they are just across the sea

All these might lead to a lower level of people demanding and a higher level of supplies hence some prices would have to come down (called bubble bursting) or stagnate. For those that have invested too heavily, there might be only marginal gain on investment at best or loss at worse^{Damn, I was right.}. It all depends on if someone is lucky to buy at the right time and right price. This I think is not the case for most properties on sale now because due to high publicity on house prices they are already overvalued, it is due for a correction^{Damn, I was right.}.

Also let us not forget that London being the World's financial centre is what is attracting hodes of people here. This might not be the case forever as long as the Al Qs and Osams are around or if the government get tough on financial regulation like the former World's financial centre (New York) did after 9/11. If this title moves the rise would not be as astronomical as now. But agreed that is a remote "if" for now but what I am saying is that prices can not only go up. If you are buying to live in it, it is always a good idea.

Everly,

Handsome Clever.

Wow Mr Sagamite, I'd really hate to have a face-to-face argument with you  
Being right seems to be more important to you than presenting facts in a way beneficial to all

Sagamite:

Why will I, in future, pay a huge amount for a flat in VI when I can live in one of the nice 200 estates in Badagry

Put a time scale to "your" future. 15years? 25years? In the meantime, what happens to existing proerty? Wait for the impending crash of 2045?

One main aspect of your idealistic posturing that you have COMPLETELY NEGLECTED is MIGRATION
I know you can write a book about MIGRATION being a Dartfodite and all      
Now fast forward to 2032 when all these estates in Badagry, Ibafo, Sango, Epe etc come on stream. Guess what impact that will have on residents in other states in Nigeria, West-Africa and potential returnee Dartfordites like YOU (No disrespect at all to my brethren in the diaspora!)

Now we're looking at 25 million inhabitants because of improved standards of living etc

Dont forget the important fact also that, 90% of property spend in Nigeria is cash-based

So mon ami - the Shangisha property is still available. Call me and make an offer I cant refuse

--------------------------------------------------------------------------------
Is this property still available?
I am interested.
Thanks

e-mail contact: mdfash@aol.com

Yes it is still available

I've just sent you a PM

Cheers

Shagati

Regardless of property values - the best return on investment continue to be real estate that is bought with little or no leverage. The use of bank loans erode any chance of profit whether it is rented or not. The same economic fact applies in Nigeria as in Western Countries. That is why how parents built wealth by building slowly and over time rather than the microwave culture we live in today which has resulted in overvalued properties in UK and the USA especially. The addition of leverage has contributed to the properties becoming a Ponzi scheme, the last person to buy with leverage as no one to pass it on to.

YoAdek333:

Regardless of property values - the best return on investment continue to be real estate that is bought with little or no leverage. The use of bank loans erode any chance of profit whether it is rented or not. The same economic fact applies in Nigeria as in Western Countries. That is why how parents built wealth by building slowly and over time rather than the microwave culture we live in today which has resulted in overvalued properties in UK and the USA especially. The addition of leverage has contributed to the properties becoming a Ponzi scheme, the last person to buy with leverage as no one to pass it on to.

Absolutely fcking brilliant post!

YoAdek333:

Regardless of property values - the best return on investment continue to be real estate that is bought with little or no leverage. The use of bank loans erode any chance of profit whether it is rented or not. The same economic fact applies in Nigeria as in Western Countries. That is why how parents built wealth by building slowly and over time rather than the microwave culture we live in today which has resulted in overvalued properties in UK and the USA especially. The addition of leverage has contributed to the properties becoming a Ponzi scheme, the last person to buy with leverage as no one to pass it on to.

Respect, ol boy chop knuckle

Sagamite:

What is "Governor's Consent for property"?

I'm guessing this is like "planning permission" £85,000 - £110,000 planning permission

Sagamite:

Sorry, I couldn't resist. This is an extract of the exchanges of email when I replied him.

Yes, demand is outstripping supply.

Hence property owners (suppliers) are maximising on how much they are requesting as they have a wide option of buyers (demanders).

So let Handsome Clever ^{my nickname with friends} break it down like it is hot.

High Demand
This is spurred by the following:
-Availability of capital to purchase properties, almost always supplied by mortgage companies Has disappeared now, hence lower demand
-Attractiveness of Capital Gains from house pricesHas disappeared now, hence lower demand
-Low interest rates
-Growing population
-Debt tolerance Is disappearing now, hence lower demand

Low Supply
This is spurred by the following:
-Favourable legislation
-Low volumes of properties
-Family formations Changing as people are now moving back with parents or staying longer b4 moving out, hence more houses to satisfy demand

As we might all know, house prices are rising fast and are almost reaching 6 times multiples of average salary. As Ola Sky^{my friend} economist will tell you, there is some certain curve which I can't remember the name that demonstrates the threshold that you can price an item before you overprice to the point that your customer numbers would start dropping. I think house prices are reaching this levels that fewer people can afford them hence demand would stall or decrease at a point in time. If you buy just before that point, you might not gain much after you pay all the transactional costs or you might lose.

More rises might lead to:
-Mortgage capital providers refusing to back a large populace's application because their salary can not fund the mortgage (remember, salary rises is well below property rises) Damn, I was right. Now we hear of "responsible lending"

Already happening:
-Gordon Brown has already commisioned the increase in volume of properties
-Interest rates is being increased Oops!
-Debt levels are already being highlighted as too high, hence government might rain down on irresponsible lending (including mortgage lenders) Damn, I was right. Now we hear of "responsible lending"
-Pressure on government to act, hence we might see some policy changes that might mirror the close regulation we see in countries like France where property is not seen as much of a good investment despite the fact that they are just across the sea

All these might lead to a lower level of people demanding and a higher level of supplies hence some prices would have to come down (called bubble bursting) or stagnate. For those that have invested too heavily, there might be only marginal gain on investment at best or loss at worse^{Damn, I was right.}. It all depends on if someone is lucky to buy at the right time and right price. This I think is not the case for most properties on sale now because due to high publicity on house prices they are already overvalued, it is due for a correction^{Damn, I was right.}.

Also let us not forget that London being the World's financial centre is what is attracting hodes of people here. This might not be the case forever as long as the Al Qs and Osams are around or if the government get tough on financial regulation like the former World's financial centre (New York) did after 9/11. If this title moves the rise would not be as astronomical as now. But agreed that is a remote "if" for now but what I am saying is that prices can not only go up. If you are buying to live in it, it is always a good idea.

Everly,

Handsome Clever.

Your are absolutely right in all your analysis on this topic.I wouldn't even buy the house for N20 million even today.Because it is just not worth it.It is just simple ridiculous the amount some properties are be marketed in Lagos.

This same property is worth 150m in just about a decade. Whoever, bought it then, will be smilling to the bank now.