Due to high rental value coupled with decline in purchasing power, new tenants and accommodation seekers now prefer smaller houses to big apartments.
Due to the rush, a lot of landlords are currently converting their big houses to one and two bedroom room apartments to get immediate occupancy.
In the high-brow areas of Lagos and Abuja, investors and real estate developers have suddenly discovered huge demand for studio apartments, one bedroom and two bedroom flats by low and middle income earning couples.
For tenants, the desire to cut cost and save money to meet other needs is driving their demand for smaller apartments.
Speaking with New Telegraph, Jonathan Badmus,a landlord in Ajah, said he could not get tenants until he demarcated his three bedrooms to two units of one bedroom apartment each.
Instead of the targeted N250,000 annual rent from the three bedrooms, he said he had been able to rake in N400,000 as rent from the two units of one bedroom flat.
According to him, the three -bedroom building had been emptied for almost two years without anyone asking for it before the conversion.
Another landlord narrated his experience, saying that rental values for one room apartments in Omole Phase I and II, Magodo, Maryland, Ogba, Ikeja, OPIC and Arepo in Ogun state now cost between N250,000 and N600,000.
According to a tenant in Ogba, who identified himself simply as Festus, a family of four people, there is no need for paying high rent on big accommodation when his monthly salary is low.
He said one room and parlour, where he was paying N200,000 yearly as rent had eaten deeply into his savings due to other competing needs.
A house seeker in Lekki said that smaller apartments had become hot cake in the environs as young couples, whose workplaces are in Victoria Island and Ikoyi jostle for few available accommodation.
He pointed out that huge demand for studio apartments, one bedroom and two bedroom flats in the property market against low supply of the products was responsible for the rush.
In his report on ‘Real Estate Outlook, which was released early in the year , Managing Director, Northcourt Real Estate Limited, Mr. Tayo Odunsi, confirmed that studio apartments, one bedroom and two bedroom flats. close to city centres had continued to enjoy demand and that there has been a shift by some developers in favour of these categories of apartments.
He pointed out that the rising demand for short let apartments would lead to more conversions, giving developers one more reason to shift focus from bigger houses to studio apartments.
“This would have the dual benefit of meeting the existing demand while maintaining cash flow for developers,” Odunsi said.
A Lagos-based estate surveyor, valuer and facility management practitioner, Mr. Stephen Jagun, said that people had been cutting down on excessive space they occupied either as new tenants or old one, hence, “the need for supply to follow the trend.”
He noted that there were instances when people leased a room where they stayed during work days and travel to meet their families at weekends.
“So, if smaller accommodation is available directly in the market, they’ll take it; because the fellow you are paying rent to may not pay his own rent or the owner frowning at subleting,” he said.
According to Jagun, starters do not need all the luxuries, hence their preference for one bedroom and two bedroom flats.
Jagun added that expatriates, who are on short stay, also preferred studio apartments for their privacy and business.
This choice of apartment, the facility management expert said, had provided another vista of opportunity for real estate developers.
An estate surveying practioners and Director in one of the offices of the Lagos State Government, Mr. Kunle Awolaja, attributed shrinking economy as the the main factor coupled with low purchasing power.
The trend for smaller apartments, Awolaja said, might not necessarily reduce rent on the types in focus but would produce shifts in accommodation type required as tenants would move from detached houses to smaller apartments.