Landlords, in turn, are left frustrated, facing mounting arrears and the challenge of maintaining their properties in the face of dwindling returns.

In major cities like Lagos, rents have skyrocketed by as much as 100 percent in the past year, exacerbating the strain on households already struggling to make ends meet. Reports indicate that approximately 80 percent of properties under the management of some landlords are plagued with defaulting tenants, creating a ripple effect that has pushed some property owners to consider selling their investments altogether.

While the Lagos State government has advocated for the adoption of monthly rent payments to ease the financial burden on tenants, cultural preferences for yearly payments remain deeply ingrained. This system, which once provided landlords with a sense of security, has now become a double-edged sword. Many long-term tenants have fallen behind on their payments, forcing landlords to navigate the labyrinth of the Lagos State Tenancy Law, which makes reclaiming properties from defaulters a daunting task.

Amid these challenges, the Lagos State real estate market faces an uncertain future. Inflation and the volatility of the naira have discouraged local and foreign investors, many of whom have adopted a “wait and see” approach before committing to new projects. The BuyLetLive 2024 housing market survey highlighted that economic instability is deterring investment, leading to a decline in the development of affordable housing and an increase in competition for existing units in high-demand areas.

Despite the struggles, the survey revealed that most Lagosians continue to favor annual rent payments. According to the report, 62.6 percent of respondents prefer to pay rent yearly, even as the government explores the introduction of an online platform to facilitate monthly rent payments. This platform, as outlined in the state’s “EKO Revenue Plus Summit” document, aims to generate N2.5 billion annually through subscriptions. However, the government’s plan may face resistance from tenants who feel more comfortable with the traditional annual system.

The survey also shed light on the preferences and financial capacities of Lagos renters. While 34.5 percent of respondents prefer to pay between N1 million and N3 million annually, a smaller group—11.8 percent—can only afford rents between N100,000 and N500,000. Others, roughly 26.4 percent, fall into the mid-range bracket of N500,000 to N1 million. Only a minority, about 7.3 percent, can afford luxury rentals ranging from N5 million to N10 million per year.

When it comes to apartment preferences, Lagosians are predominantly opting for two-bedroom and three-bedroom apartments, with 38.2 percent and 35.5 percent of respondents selecting these categories, respectively. Smaller apartments, such as one-bedroom units, account for just 9.2 percent of the demand, while 16.4 percent prefer larger four-bedroom units.

For landlords, the situation has prompted a reevaluation of investment strategies. Some are contemplating further rent hikes to offset losses caused by defaulting tenants, but this move risks alienating renters even further. Others are considering exiting the buy-to-let market entirely, wary of prolonged returns on investment due to economic instability.

Experts warn that without decisive government intervention, the situation could deteriorate further. Proposals for rent control and increased regulation have been floated as potential solutions, but implementation remains a challenge. In the meantime, tenants find themselves trapped in a cycle of rising costs and diminishing purchasing power, while landlords struggle to navigate the increasingly hostile economic landscape.

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Despite the bleak outlook, the BuyLetLive report predicts some resilience in Lagos’s real estate sector. While the pace of rent increases is expected to slow in the latter half of the year, the combination of population growth and rapid urbanization suggests that demand for housing will remain strong. However, the lack of affordable options may continue to drive competition for existing units, leaving many prospective tenants in limbo.

In a country where economic instability has become the norm, the rent crisis serves as a microcosm of broader challenges. For now, both tenants and landlords are left searching for solutions in a market that offers few easy answers. As Nigeria continues to grapple with inflation, unemployment, and a volatile exchange rate, the question remains: who will bear the brunt of the burden in the months to come?

The post Rent Woes Deepen as Nigerians Struggle with Rising Costs appeared first on Housing TV Africa.

The story from UK is not any different as Great Britain is expected to witness a unique trend in its real estate market, with rental costs projected to surpass house prices by a significant 25 percent over the next four years, according to a report by source.

Canada, adjudged the second largest country in the world in area (after Russia), has received a significant number of Nigerians, young and old, who have left the country in the current japa wave in search of better living conditions and jobs.

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The country is currently gripped by a surge in homelessness that has seen tens of thousands of people priced out of the rental and real estate markets and left to live in the streets of the wealthy nation.

Besides rents, the country is also battling rising cost of living and galloping inflation such that humanitarian condition has reached crisis level, making it a double whammy for Nigerians in that country who left their home country for almost the same reasons.

A new report published in September 2023 cites Quebec, the second most populous province in Canada, to be facing a serious housing shortage because of factors ranging from the pandemic to record immigration driving population numbers higher and also fuelling demand.

According to the report, real estate prices have become the main topic around dinner tables in recent months, and public opinion and opposition criticisms have forced governments to prioritize housing and cost of living concerns.

Government data estimates there are some 235,000 homeless people across the country, but that is only counting people who access shelters, said University of Western Ontario professor, Cheryl Forchuk, who fears the true picture is far worse.

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Researchers warn that government data is vastly underestimating the number of homeless across the country, as the social ill spreads from major cities to small towns.

The September report notes that, in Quebec, one in two homeless people can be found in rural parts of the eastern province, instead of mainly in Montreal as had been the case in the past.

The report also cited Danny Brodeur-Cote, a young bachelor who has lived for months in a makeshift camp in woodlands near a cemetery in Granby, a town of 70,000 inhabitants 80 kilometres (50 miles) east of Montreal, after being evicted in June from an apartment he rented with his girlfriend.

“I work five days a week,” Brodeur-Cote was quoted as telling AFP. At age 39, this is the first time in his life that he has found himself living on the streets because, “any little housing there is is much too expensive,” he said.

Housing situation is really dire in Canada as nearly one in four homeless people found themselves on the street after being evicted from housing, according to the Quebec government report.

Karine Lussier, director of a local anti-poverty organisation, noted that “in Granby alone, we need at least 1,000 affordable housing units.”

He recalled that, between 2018 and 2022, the number of homeless people in Quebec increased by 44 per cent, their numbers swelling to 10,000 last year. Indigenous people, who represent five per cent of the Canadian population, are particularly over-represented in the streets, especially the Inuit, said Lussier.

Mayor Julie Bourdon told AFP that “visible homelessness did not exist three years ago in Granby,” admitting that “rents are very high now compared to two years ago; the city, rather than dismantling the camps and relocating the occupants, decided to opt for maintaining what it calls “places of tolerance.”

The report says that one contributing factor for the house rent increase in UK was the combination of lower yields and an increasing number of landlords relying on financing, which could place additional pressure on investor profits, particularly in the capital city.

“The looming surge in interest rates is expected to drive a substantial 5.5 percent growth in property prices nationwide. This surge in interest rates will exert greater pressure on rental prices than on house prices,” the report said.

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Source: BusinessDay

The post Homelessness Hits Nigerians’ Most Preferred ‘Japa’ Destination appeared first on Housing TV Africa.