Building collapses are a fairly common phenomenon in Lagos. 115 mostly residential buildings collapsed in Lagos between 2005 and 2016. There is a pattern and while we have reason to blame developers for substandard construction that puts people at mortal and financial risk, the larger focus must be on the regulatory failure that lets it happen.
The 1 November 2021 collapse was of a high-rise luxury development that had flats going for $1.2 million. Ikoyi and Lekki house prices have risen rapidly enough to have some asking if a housing market bubble might be in place. It might look like a bubble but it’s actually a cocoon that investors feel could protect their wealth from an inflation rate that gallops like a prized racehorse. A lot of these properties are being invested in as stores of value rather than as income-generating schemes but they deserve protection regardless.
Nigeria’s home-ownership rate currently stands at 25% which is remarkably lower than those of Indonesia, Kenya, and South Africa that are 84%, 73%, and 56% respectively. Economic difficulties already exist that limit Nigeria’s housing supply and a regulatory system that fails to provide adequate protection for lives and financial investment is going to hurt the real estate market and leave the Nigerian economy worse off than it already is. To bridge this gap, we need to build 700,000 houses yearly over the next 20 years but current production is estimated to stand at only 100,000 new houses annually.