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Houses soaring beyond Lagos residents’ income –Report

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The cost of low income houses is fast slipping beyond the grasp of an average Lagos worker, a new report has found.

The report, published by Nigerian Proptech – Estate Intel, said this was due to the continued rise in the prices of houses, both rental and sale prices.

It stated that there had been a corresponding rise in construction costs, as cement prices had seen an increase, from between N2,450 and N2,510 in 2021 to N3,900 – N4,200 in 2022 for Dangote Cement.

It also stated that land prices had been on the rise, with areas such as Epe recording over 100 per cent growth within the past five years.

It noted that while all these costs had likely impacted on rising home prices, a resultant increase in disposable income had not been recorded, making residential real estate unaffordable for the average Nigerian.

The report read in part, “A number of rules of thumb have been established to determine how much an individual should place aside for their rent based on their income.

“However, the most widely used rule is the 30 per cent rule proposed by the United States Government in 1981.

“This rule proposes that an individual should set aside at most 30 per cent of their monthly salary to pay for their monthly rent, or 30 per cent of their annual salary to pay for their annual rent.”

This means that any individual or household that spends more than 30 per cent from their salary on rent is “burdened,” the report noted.

According to paylab.com, individuals between the ages of 25 and 34 years old in Nigeria collect a monthly salary between N66,000 and N350,000 depending on the type of job.

This translates to an annual salary between the range of N792,000 and N4.2m. The average salary collected within this age range is N191,000 per month, while the median is N161,000 per month.

 According to the report, Ikoyi and Victoria Island account for the highest price of a two-bedroom apartment, going at an average of about N12.9m per annum. On the other hand, Epe and Ajah account for the lowest price going at an average of about N584,091 per annum.

Using the 30 per cent rule, if an individual was staying in Ikoyi and paying the average rent of  N12.9m per annum, they would have to be earning an annual salary of N43.1m per annum. On the other hand, an individual renting a 2-bedroom apartment in Epe at an average price of N584,091 per annum s(he) would have to be earning an annual salary of N1.9m per annum.

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