A new report released by one of Nigeria’s real estate research company firm, Residential Auctions Company (RAC) has predicted that Lagos real estate market is in for another bumpy year.

According to the RAC Lagos House Price Index – 2016 Outlook, the nation is set for another gloomy year and recession looms upon the already fragile economy due to falling global oil price and the weakening naira, the Nigerian economy is in for another tough year.

“All sectors of the economy will be severely affected as there will be a high shortage of cash in circulation. Our, take on this is that although supply of housing units in the market will remain unchanged there will be less demand from buyers which will ultimately bring a fall not a crash in average asking prices across all markets.”

For RAC, the year 2015 was a remarkable year for the nation as Nigerians all around the country took to the polls to vote and a new government was elected under President Muhamadu Buhari. Upon taking office the new administrating set about implementing new policies particularly in the financial sector that has had an impact on the macro-economy at large. Also in 2015 global crude oil prices kept falling and this had adverse effect on the Nigerian Naira.

The year 2015 was a tale of two twists for the Lagos real estate market as average asking price on houses saw a sharp increase on Lagos Mainland market and the converse on Lagos Island market (a market that is highly susceptible to changes in the macro-economy). Average asking prices rose by 20per cent on Lagos Mainland and fell by as much as 25 per cent on Lagos Island. The average asking price for a four bedroom family house on Lagos Mainland is now estimated at N73,790,072 while the average asking price for a similar property on Lagos Island is N182,236,111.

The increase in growth on the mainland does not come as a surprise as supply of housing units into the market is low and there has been an increased demand for mainland properties from potential house buyers. Some of the fastest growth areas where asking prices on houses have increased over the course of a year include: Ogudu GRA, Magodo Phase II GRA, Omole, Maryland, Ilupeju and Ikeja due to the lack of suitable housing stock.

The RAC Lagos House Price Index was launched in 2011. It is the first index of its kind to show movements in house prices in Lagos based on average asking price.