Pivoting in a Downturn: Applying the “Lipstick Effect” to Nigerian Real Estate by Olawale Fatunwase
The Nigerian real estate market is a paradox. It remains one of the most resilient and aspirational asset classes in the nation, yet it is brutally sensitive to the macroeconomic shocks—currency devaluation, inflation, and reduced purchasing power—that have become familiar to investors and citizens alike. When the naira weakens and the cost of living surges, the dream of acquiring a prime piece of property in Lagos, Abuja, or any of the fast growing cities can feel like a distant fantasy.
However, history and behavioral economics suggest that consumer desire does not disappear during a downturn; it merely changes form. This is where the “Lipstick Effect” comes into play.
Coined during the Great Depression, the Lipstick Effect describes the phenomenon where consumers, unable to afford big-ticket luxury items like cars or fur coats, redirect their spending toward smaller, affordable indulgences—like a premium lipstick—to satisfy their need for a psychological lift and a sense of status.
For the forward-thinking real estate consultancy in Nigeria, surviving—and thriving—in a downturn requires a pivot from selling pure investment logic to selling these smaller, emotionally resonant “luxuries.” Here is how to apply this psychological shift to the Nigerian property landscape.
- The Shift in Value Proposition: From “Investment” to “Feeling.”
In a bull market, you sell spreadsheets, capital appreciation, and square meter yields. In a downturn, those metrics look shaky. Instead, you must sell security, identity, and the “dream.”
The target client is no longer just the high-net-worth investor looking for a portfolio hedge. It is the upper-middle-class professional, the diaspora returnee, or the anxious saver. They cannot drop ₦150 million on a duplex today, but they can spend ₦500,000 to feel connected to that dream.
- Productizing the “Lipstick” in Real Estate.
To capture this mood, a consultancy must unbundle its services. Instead of only offering full-property sales, break your value proposition into smaller, “lickable” packages.
- The “Diaspora Peace of Mind” Package: Nigerians abroad suffer acute anxiety about being defrauded or losing family land. Offer a premium virtual consultancy service. For a fixed fee, provide a high-definition drone survey of a plot, a digital chain-of-title review, and a live video walkthrough of the neighborhood. You aren’t selling the house; you are selling the feeling of connection and safety to a homesick client for the price of a designer handbag.
- The “Land Banking” Entry Ticket: Many people want to participate in the rapid development of corridors like Ibeju-Lekki but cannot afford the front-row plots. Position your consultancy as a guide for “land banking.” For a consultancy fee, you help them identify, survey, and legally secure a smaller, more affordable plot in the path of future development. The “lipstick” is the legal security and the validation that they, too, are now part of the “Lagos expansion story.”
- Fractional Ownership Facilitation: While full ownership is the end goal, the journey can start with a sliver. Partner with cooperatives and Esusu (thrift) groups to facilitate fractional ownership of commercial spaces or residential blocks. Market it as: “Own a piece of the skyline for the price of a new iPhone.”
- Selling Experience Over Square Footage
When people cannot afford to move to a bigger home, they want to love the home they are currently in. This opens a door for consultancies to move into the realm of experience and aesthetics.
- The “Home Glow-Up” Consultation: Offer a high-end interior advisory service. For a flat rate, a consultant visits the client’s home and provides a mood board, a list of affordable local decor sources (perhaps from Balogun Market or local artisans), and a plan to repaint or rearrange. You are selling the “new home feeling” without the trauma of moving.
- The “Stress-Free Rental” Executive Service: In cities like Lagos, the rental process is often a stressful battle with agents and landlords. Position your firm as the “white glove” tenant representation service. Clients pay a premium for you to find them the best property in Ikoyi or Maitama, negotiate the toughest terms, and handle the legalities. You are selling them time and peace of mind—luxuries that feel very good when the rest of the world feels chaotic.
- Marketing the Emotional Payoff
To successfully execute the Lipstick Effect, your marketing collateral must change. Move away from photos of empty concrete structures. Focus on human-centric imagery:
- A close-up of a key being placed in a lock.
- A family laughing in a well-decorated living room.
iii. A diasporan smiling as they watch their land survey via video call.
Your copy should pivot from “High ROI Guaranteed” to “A Place That Feels Like Yours,” or “Give Your Family the Gift of Security This Year.”
The Bottom Line
A downturn in Nigeria does not kill the desire for property; it simply makes the market hyper-segmented. The elite will continue to buy mansions, but the layer just below them—the aspirational class—will seek smaller, tangible tokens of the property dream.
By unbundling your services and offering these “lipstick” solutions—security, status, stress-relief, and beauty—your real estate consultancy can remain not only relevant but deeply profitable, turning economic adversity into a powerful opportunity for connection and growth.
Until I post my next article, I wish all Muslims Ramadan Kareem and Happy Easter celebrations to all Christians.
Olawale Fatunwase, ESQ is the leading partner at Luxe Corporate Solicitors, a registered firm headquartered in Ibadan, Nigeria specializing in legal and real estate consulting, management and marketing. For consultations and other services, write to me via luxe.solicitors@yahoo.com
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