Ikoyi and VI are notoriously referred to as one of the most expensive slums in the world. Whilst that may be an unfair attribute to an overpriced but high brow neighbourhood one wonders why people spend so much just to live in these places. A Businessday article today focussed on the slump in the demand for housing prices in these neighbourhoods even though the owners of the properties are amazingly unwilling to drop prices. According to the article,
“Residential vacancy factor is increasing in Victoria Island and Ikoyi due to high rent. In Victoria Island, it increased to 28 percent in June, up from 19 percent in May this year, while Ikoyi has seen an increase from 4 percent in May to 6 percent in June this year,” he said in the FDC quarterly economic survey, adding that Lekki was the worst hit with 31 percent rise in June from 23 percent in May.
The article also cited Banana Island in Ikoyi, where a well-finished four-bedroom apartment sold for as much as £1 million, while a five-bedroom duplex in good location sold for between N450 million and N500 million. Despite these seemingly astonishing prices the vacancy rates remain high and the owners don’t seem even bothered. Financial Derivative Company (FDC) in the article singled out Sinari Daranijo Street in VI as the area with the highest vacancy factor, pointing out that the 31 houses and 16 flats on the street had 13 percent and 81 percent vacancy rates, respectively, with as much as 30 percent commercial vacancy factor. This is against what obtains in Elsie Femi Pearce Street in the same location, which has 20 houses and eight flats with 0 percent and 40 percent vacancy rates, respectively, and 0 percent commercial factor.
You can read the businessday article by following clicking here
vacancy factor – a measurement of gross rental income loss due to vacancy and non-collection of rent. The rate is expressed as a percentage, and is calculated by dividing lost rental income (from vacancy and non-collection) into total potential gross rental income (including income from other rental units and the lost income).
Vacancy Rate – is a numerical value calculated as the percentage of all available units in a rental property, such as a hotel or apartment complex, that are vacant or unoccupied at a particular time. It is the opposite of the occupancy rate, which is a calculation based on the percentage of units in a rental property that are occupied. The vacancy rate is a useful metric for evaluating a rental property. High vacancy rates indicate that the property is not renting well; low vacancy rates point to strong rental sales. The vacancy rate and occupancy rate should add up to 100%.
