Is the Extra Cost of Waterfront Properties Worth It?

Waterfront properties appear to command increased attention and choice from renters and home buyers worldwide. Facts and figures gathered from diverse respondents across the globe in the post-Covid 19 era are available to back this claim. This curious development has contributed to fueling a spike in the cost of choice waterfront properties in recent times.  

In addition, several real estate experts in Nigeria - and globally - have run commentaries on the possible value-added utility of waterfront properties, as against inland properties. As such, it became imperative to investigate the underlying factors driving the preference for waterfront properties.  

Waterfront Versus Inland Properties: Global Facts and Figures 

Waterfront properties encompass any residential, office or commercial buildings with proximity to a body of water. Such water bodies could be a lake, rivers, lagoons, or oceans. The portion of land connecting that building to the water is included and valued as part of the property.  

A Global Buyer Survey (2021) conducted by Knight Frank revealed that 42% of respondents are now more inclined to buy waterfront residences, following the Covid-19 pandemic. Such factors as a shortage in supply, a yearning for green spaces, and the desire for an aesthetic view have consequently driven the prices and sales of waterfront properties much higher.  

One year ahead, the Knight Frank 2023 Global Waterfront Index revealed that waterfront properties in Sydney (Australia) generated an average of 118% premium - the highest so far. This is a marginal downturn from 2022's 121% premium for the same city. Auckland (58 percent). Monaco (42 percent), Cap d’Antibes (40 percent) and Paris (38 percent) hold the second to fifth positions in 2023, respectively.  

Yet again, a related essay on the NLE website identified Africa as the second most rapidly urbanizing continent after Asia. Also, over 70 percent of Africa's major cities and national capitals are located on waterfronts. This trend holds despite the effects of climate change - such as flooding, rising sea levels, and significant increases in rainfall. African cities such as Lagos, Abidjan, Conakry, Kinshasa, Luanda, Dar-es-Salaam, Dakar, Cotonou, Cape Town and Mogadishu are notable waterfront locations.  

Reasonable estimates of the cost of waterfront properties across African cities are difficult to obtain, due to lack of statistical data. Despite this, the African Land property website provides some insight into cheap places to obtain beach property across Africa. According to the site, five African countries with the cheapest waterfront property - specifically beach property - are Mauritius, Gambia, Tunisia, Kenya and Nigeria.  

Buyers' Preference for Waterfront Properties: The Nigerian Case 

Examining buyers’ preferences for luxury homes in Nigerian cities also shows that waterfront homes remain highly sought after. Luxury waterfront properties in Lagos particularly command some of the highest premiums, compared to other Nigerian cities. The proximity of these luxury properties to beaches and resorts is now clearly used to their advantage. It has driven the rental income on waterfront properties in Nigerian cities higher than that on inland properties. It is also uncommon to find waterfront property for sale.

In Lagos, Rivers and other states, waterfront properties are known to be quite expensive, with cost prices estimated to be between N90 million and N1.2 billion per plot. However, this may not be the prevalent case across all waterfront properties. But plots located in choice waterfront locations are of high value. In Lagos, for instance, such choice plots are found in Banana Island, Osborne Foreshore Estate, Sangotedo Jewel Gardens, Lagoon Front Estate, Westwood Lakes, Orange Island, Atlantic View Garden, and Ilashe Private Beach (to mention a few). 

On the other hand, inland plots in Nigeria are as cheap as N100,000 (Ilorin) and N250,000 (Ibadan) per plot in remote locations. Lands sold in Nigeria generally cost an average of N6.72 million per plot as of 2023, according to the Nigeria Property Centre website. Furthermore, the site indicated that some parcels of land are known to cost as high as N249 million per plot. 

The Need to Tap into the Benefits of Waterfront Property in Nigeria 

Prof. Austin Otegbulu, a lecturer and estate surveyor, pointed out in a recent interview that planned waterfront locations abound in the Oniru and Lekki areas of Lagos. He also stated that such lands are suitable for recreation and can create value. However, he insisted that such planned waterfronts will not attract any value, if the government continues to allow criminals to operate freely in such places. Again, dumping of wastes in the said areas has further reduced their value, according to him. While on the contrary, European countries have harnessed the potential rewards of waterfront properties, and as such they are well-guarded and monitored.   

President of the International Real Estate Federation (FIBACI), Mr Gladstone Opara, expressed the same concerns about criminals invading Nigeria's waterfront properties.  He stated that due to the government’s lack of vision and planning, Nigeria is yet to benefit from waterfront real estate. He further pointed out that both citizens and the government have been tampering with waterfront locations - especially through sand filling,  

Opara called for more stringent regulations by relevant government parastatals, to reverse the porosity and damage done to waterfront areas. He specifically mentioned the Waterfront Authority in Lagos.  

It is believed that by undertaking responsible management of waterfront properties in Nigeria, they will emerge as prime recreational and tourist spots. Thus, contributing to Nigeria's economy and people's livelihoods in terms of financial rewards, environmental sustainability, and aesthetic value.