While other subsectors of the Nigerian real estate market are mostly affected by recession and downturn in economic activities, land banking has overtime shown that it is one of the investments that are resilient to shock.
Whether it’s faced with a recession like in 2016 or during a pandemic like in the last year, the prices of land remain unchanged.
The term ‘land banking’ implies exactly what it is. Rather than putting cash into a savings account (where it will earn 1.25% interest per annum) or the stock market (which has become increasingly unpredictable in recent time), some investors take an alternative approach by acquiring land, a tangible, fixed asset, one that cannot be broken, stolen or destroyed.
Explaining the reason land banking is resilient in tough economic cycles, Seth Williams, a land investor said land is “a resource with a supply that is always going down (after all, they aren’t making any more of it) and a demand that is constantly on the rise.
According to the 2020 half-year real estate report by Northcourt, the average land prices for an area like Abraham Adesanya in Lagos increased by 61% in the first six months of 2020 compared to the average in the comparable period of 2019. The trend is the same for Ikeja GRA, Lagos as land appreciated by 21% despite the impact of the pandemic which disrupted the real estate market since it entered the country on February 28, 2020.
According to analysts, land negatively correlates with other asset classes and only slightly correlates with real estate. This means that while other assets reduce in value (stocks, bonds, etc.), land prices increase.
“The cost of building a house is the same, whether you are building in VI or Ikoyi, but it is the land value that drives the cost of properties high,” Adekunle Abdul, Managing Director, Metro & Castles Homes, a real estate development company said.
So many people in the world have built wealth through land banking. Example are the likes of Ooni of Ife, Oba Ogunwusi (before he became Ooni of Ife),
Folorunsho Alakija, Otunba Wale Akinboboye of Lacampagne Tour and Resort, Chief Emmanuel Oyedele Ashamu, George Washington, Donald Trump, and many more.
Anyone can make extra income with this real estate structure, all you need is the right information to help you make a good investment. Land banking comes with a guarantee of great profit returns in a scope of five years. This is assured because it has proven to be one of the most profitable business either for a short or long-term.
For any investor going into land banking investment, it is desirable to be conversant with basic highlights like, how to spot a good investment opportunity, when to buy a land, when to sell, when to develop etc. For example, when you buy a land in an undeveloped area, the best time to sell is when the area the land is situated is at a developing stage.
Another thing you should consider when going into an investment in land banking is getting a good real estate adviser. This is actually very important when investing in land banking scheme because of the unlimited likely challenges to be faced in such investment.
LNT is a Mixta Africa development that has experienced immense growth as a result of consistent infrastructure investments made over the years which has made it a prime area of interest for investors. With over 7,000 housing units sold, this prime area will be home to an estimated 50,000 people on completion. This provides a wealth of opportunity for investors looking to tap into the wholesale and retail value chain.
Lagos New Town provides Bulk land (up to 5 hectres starting from #16,500) to be used by both developers, individuals for commercial and residential purposes. The plots are bordered by popular residential estates such as the exclusive Lakowe Lakes, Beechwood Park, Beechwood Estate, Adiva Plainfields, Frontier Estates and several other estates.
The plots come with a very flexible payment plan and an uncontested title deed. Lagos New Town is an investor’s dream and it will be my pleasure to serve you on this acquisition journey of prime land guaranteed to give you a high ROI in the fastest growing axis in Lagos state.
