Rent Prices Expected to Rise in Nigeria in Q4 2026, HDAN Report Says

Residential rents in major Nigerian cities are expected to remain under upward pressure in the fourth quarter of 2026, as rising demand, high construction costs, limited affordable housing and mortgage financing challenges continue to affect the property market.

A report by the Research and Economic Development Unit of the Housing Development Advocacy Network (HDAN) projects that Nigeria’s property market will remain active but increasingly selective between October and December 2026.

According to the report, affordable residential developments, rental housing, serviced plots and properties capable of generating regular income are expected to attract more interest than speculative luxury developments.

HDAN said the final quarter would present opportunities and challenges for property developers, investors, landlords, tenants and prospective homeowners as the industry responds to prevailing economic conditions.

The organisation noted that although Nigeria continues to experience substantial housing demand, the purchasing power of many households remains insufficient to translate that demand into actual homeownership.

The report identified seven major developments expected to influence the property market during the final three months of 2026.

Residential Rents Expected to Remain High

HDAN projects that residential rents will remain under upward pressure in major urban centres, including Lagos, Abuja, Port Harcourt, Ibadan and other rapidly growing cities.

Continued urban migration, increasing household formation, limited supplies of affordable housing and rising property maintenance costs are expected to sustain demand for rental accommodation.

However, the organisation warned that landlords could face increasing resistance from tenants whose incomes have not grown enough to accommodate repeated rent increases.

The report anticipates that more households may move away from expensive city centres to satellite communities where accommodation is relatively affordable.

Demand for one-bedroom and two-bedroom apartments, smaller residential units and moderately priced rental properties is also expected to remain strong.

Construction Costs to Influence Property Prices

HDAN identified construction costs as one of the most significant factors likely to influence property prices during the fourth quarter of 2026.

Despite signs of moderation in inflation, developers continue to face the accumulated effects of expensive building materials, energy, transportation, labour, infrastructure provision and construction financing.

The organisation explained that a slowdown in inflation does not necessarily mean that cement, reinforcement steel, roofing materials and other construction inputs will become cheaper.

HDAN expects some developers to respond by reducing building sizes, adopting alternative construction technologies, reviewing architectural designs and implementing phased development strategies.

The report also warned that high construction costs could discourage new housing projects, potentially worsening the housing supply shortage and putting additional pressure on rents.

It called for stronger government support for local building-material production, research into alternative construction materials and policies that reduce the cost of delivering affordable homes.

Mortgage Financing Remains a Major Challenge

The report identified inadequate access to affordable mortgage financing as one of the biggest obstacles to expanding homeownership in Nigeria.

Although the Central Bank of Nigeria reduced its monetary policy rate to 23 per cent in September 2026, HDAN cautioned that the adjustment would not automatically translate into affordable long-term housing loans.

According to the organisation, many Nigerians still lack access to mortgages with repayment periods and interest rates that reflect their earning capacity.

HDAN called for stronger coordination among the Federal Mortgage Bank of Nigeria, Nigeria Mortgage Refinance Company, Ministry of Finance Incorporated, Family Homes Funds Limited, the Federal Ministry of Housing and Urban Development, and other relevant financial institutions.

It also advocated expanded mortgage guarantee mechanisms, rent-to-own programmes, housing cooperatives and innovative financing arrangements designed for workers in the informal economy.

The report predicts that home purchases dependent on mortgage financing will remain constrained during the final quarter unless there are meaningful improvements in lending conditions and access to housing finance.

Property Market Outlook Across Major Cities

HDAN expects rental demand in Lagos to remain strong, particularly for apartments and moderately priced residential properties. Housing affordability is also expected to encourage more households to relocate to peripheral communities and neighbouring Ogun State.

In Abuja, residential rents are projected to remain under pressure in established districts, while demand for comparatively affordable accommodation in satellite communities may increase. High land and infrastructure costs are expected to continue affecting property development.

In Ogun State, residential corridors benefiting from their proximity to Lagos may continue attracting land investors, first-time buyers and developers seeking relatively affordable locations.

In Port Harcourt, market performance is expected to vary by location, with established neighbourhoods and properties offering reliable rental income attracting selective investor interest.

Ibadan may continue benefiting from demand for comparatively affordable family homes, residential plots and emerging housing developments.

In Enugu, interest in residential properties, serviced land and diaspora-related housing investment is expected to remain an important driver of market activity.

HDAN emphasised that these projections are directional assessments rather than guaranteed increases in property prices or transaction volumes.

HDAN Calls for Government Action on Housing Affordability

The organisation, through its Executive Director, Festus Adebayo, urged governments at all levels to prioritise affordable housing finance, access to serviced land, rental housing development and critical infrastructure provision.

According to HDAN, these measures would help reduce the cost of housing delivery and make homeownership more accessible to ordinary Nigerians.

Adebayo stressed that the success of Nigeria’s property market should not be measured solely by rising property values, increased real estate investment or developer profitability. He said it should also be assessed by the number of Nigerians who can afford decent and secure accommodation.

He called for deliberate government policies to stimulate housing supply, reduce construction costs, expand access to long-term mortgage financing and encourage private-sector investment in affordable housing.

Adebayo noted that the widening gap between property prices and household incomes remained a major challenge requiring urgent policy attention.

He explained that although housing demand continues to increase, millions of Nigerians remain unable to purchase homes because property prices, mortgage conditions and rental obligations exceed their financial capacity.

He urged federal and state governments to move beyond announcements of housing projects and establish measurable programmes capable of delivering homes within the financial reach of low- and middle-income earners.