Nigeria’s housing affordability challenge is worsening as rising rents across major cities force many workers to spend a large share of their income on accommodation.

Recent reports show that tenants in cities such as Lagos, Abuja and Port Harcourt now spend more than 60 percent of their earnings on rent, significantly higher than the 30 percent affordability benchmark recommended by the United Nations.

The rent-to-income ratio is a key measure used to determine housing affordability. It calculates the percentage of a person’s monthly income spent on rent. Housing experts say the ratio in Nigeria has climbed sharply in recent years due to increasing accommodation costs and economic pressures on households.

Over the past two years, rents in several Nigerian cities have reportedly increased by more than 100 percent, putting additional strain on tenants and making home ownership more difficult for many Nigerians.

Many residents have also reported sudden rent increases by landlords. A Lagos-based professional, Oluwasegun Olamilekan, explained that the annual rent for his two-bedroom apartment outside the city centre recently increased from ₦450,000 to ₦850,000.

He said similar apartments in his neighbourhood are now rented to new tenants for up to ₦1.2 million per year, excluding additional charges such as agency, agreement and caution fees. When these extra costs are added, tenants may end up paying between ₦1.5 million and ₦2 million to secure accommodation.

Industry experts say the housing affordability threshold in Nigeria has been severely strained. Speaking at a real estate forum in Lagos, Olajumoke Akinwunmi, co-founder of Alitheia Capital and chairman of Purple Group, noted that some Nigerians now spend as much as 70 percent of their income on housing.

She said the current situation has made it increasingly difficult for aspiring homeowners to buy property, as rising costs have significantly increased the financial requirements for home ownership.

Experts also attribute the surge in housing costs to rising construction expenses. Although data from the National Bureau of Statistics shows inflation has slowed in recent months, prices of building materials continue to increase.

For instance, the cost of a 50kg bag of cement has risen from about ₦7,500 in late 2025 to between ₦11,500 and ₦15,000 in many parts of the country.

According to Timothy Nubi, professor and founding director of the Centre for Housing and Sustainable Development at the University of Lagos, other building materials such as steel and sand have also experienced significant price increases, further pushing up development costs and rental prices.

Analysts say the housing market is currently under pressure as both tenants and developers struggle with economic uncertainty. While renters face increasing accommodation costs, developers are also dealing with fluctuating building material prices, making it difficult to determine realistic property prices.

Experts warn that without stronger housing policies and increased supply of affordable homes, the housing affordability crisis in Nigeria may continue to worsen.

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Luxury property values in Lagos have surged sharply over the past year, with a portfolio of 10 high-end investment assets rising to ₦25.6 billion from ₦9.3 billion recorded in December 2024, according to industry data.

The strongest gains were recorded in Ikoyi, one of Nigeria’s most exclusive neighbourhoods, where property values increased between 132 per cent and 176 per cent. Analysts attribute the surge to strong investor demand and the impact of the naira’s devaluation, which has favoured buyers holding stronger foreign currencies.

Despite the emergence of new upscale districts across Lagos, Ikoyi continues to attract premium residential and commercial investments, reinforcing its reputation as a top destination for high-yield real estate.

David Mbah, chief executive officer of MDS Properties, noted that the area remains the first choice for luxury developments, with only Eko Atlantic offering comparable exclusivity.

He explained that most new projects in Ikoyi involve redeveloping older structures into modern high-rise residential buildings that command higher sale and rental values, making such investments highly profitable.

Several properties within the surveyed portfolio recorded major value jumps. A prime parcel at Sapara Williams rose to ₦4.02 billion from ₦1.73 billion, while a Macdonald Road property climbed to ₦3.15 billion from ₦1.14 billion. A Sinari Daranijo asset appreciated to ₦6.93 billion from ₦2.69 billion, becoming the most valuable property in the portfolio. Another property in Rumens appreciated by 196 per cent to ₦5.05 billion.

Abuja’s high-end market also recorded growth, though at a more moderate pace. A property on Mike Akhigbe Street increased to ₦1.8 billion from about ₦418 million, while an Ago Dutse location rose to ₦600 million from approximately ₦248 million.

Industry professionals say inflation and currency depreciation have played a major role in pushing up property prices across Lagos.

Chudi Ubosi, principal partner at Ubosi Eleh & Co, noted that land on Cooper Road that sold for about ₦800,000 per square metre in January 2024 now commands as much as ₦3.5 million per square metre.

He added that prices have also increased on the mainland. In Ikeja GRA, land now sells for around ₦1.5 million per square metre, up from ₦600,000, while a three-bedroom flat rents for about ₦15 million per year, compared to ₦5 million previously.

Rental values in top locations have risen even more sharply. In Banana Island, an average duplex now rents for between ₦80 million and ₦100 million annually.

Ubosi urged authorities to ease pressure on the city centre by expanding transport infrastructure into surrounding areas through coastal roads, rail systems and waterways.

Charles Ihedigbo, a former managing director at Fine and Country, also confirmed the surge in Ikoyi property values, attributing it to limited land supply and sustained demand.

According to him, land that sold for about ₦1.5 million per square metre in 2024 now goes for roughly ₦3.5 million per square metre, noting that land typically appreciates faster than built structures because of its development flexibility.

Lagos, Africa’s most populous city with more than 20 million residents, continues to attract both local and international investors, sustaining demand for premium real estate despite infrastructure constraints.

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Lagos has kept its crown as Nigeria’s luxury property hub. A new report by Diya Fatimilehin & Co. shows that Eko Atlantic, Old Ikoyi, Banana Island, and Victoria Island remain the country’s most expensive residential areas.

In Ikoyi, a four-bedroom apartment now sells for about ₦1.5 billion, highlighting strong demand in the city’s upscale enclaves.

The report also points to Ogun and Oyo as emerging alternatives. With lower entry costs and better infrastructure, areas such as Alalubosa and Iyaganku GRAs in Ibadan, and Laderin Estate in Abeokuta, are gaining traction. Annual rents in these estates reach up to ₦3 million.

Infrastructure projects are driving this shift. The Lagos Blue and Red Line metro rails, the expanded Lagos–Ibadan Expressway, and the planned Fourth Mainland Bridge and Lekki International Airport are opening new growth corridors.

Beyond Lagos, housing demand is rising in regions like the North-West and South-South. Cities such as Kano, Kaduna, and Sokoto are seeing opportunities from industrial growth and agriculture. Despite security challenges, established districts like Barnawa in Kaduna and Nasarawa GRA in Kano remain resilient.

In the South-South, urban renewal and major road projects are reshaping Uyo, Asaba, Port Harcourt, and Benin City. A 169-room Radisson Hotel nearing completion in Benin highlights renewed investor confidence.

The report concludes that Nigeria’s housing market is evolving. From Lagos’ dominance to new frontiers in emerging cities, urbanisation, reforms, and infrastructure continue to shape where Nigerians live and invest.

Source: Punch

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