A report from real estate company Clever reveals that while most buyers prefer homes requiring minimal work, nearly a third end up purchasing properties that need substantial improvements. But at what point does it make more sense to demolish rather than renovate?

Tearing down a home offers a fresh start. It allows homeowners to construct a completely new property tailored to modern needs and personal tastes. Kurt Carlton, co-founder and president of New Western, a real estate investment marketplace, points out that while demolishing can sometimes be more affordable than renovating, the actual costs depend on various factors, including location and project specifics.

A new build eliminates the limitations of outdated structures, providing opportunities for contemporary designs and advanced energy efficiency. Renovations, on the other hand, often require working around existing layouts and materials, which might not always align with a homeowner’s vision.

Despite its advantages, demolition isn’t always the simplest solution. Carlton explains that since 2008, constructing new homes has become increasingly complicated due to regulatory requirements, labor shortages, and material costs. Nearly 25% of a new home’s cost now comes from compliance and permitting expenses.

Delays in securing permits and finding skilled workers add to the challenges, making rebuilding from the ground up more difficult than it may initially seem. While demolishing a home offers a clean slate, the process can be riddled with unforeseen obstacles that stretch budgets and timelines.

The choice between demolition and renovation requires careful consideration. Structural integrity is a key factor—if a home has foundational issues or extensive damage, rebuilding might be the safer and more efficient option. Similarly, properties that don’t meet modern building codes may require so many upgrades that a teardown becomes the more practical choice.

Carlton notes that in high-end housing markets, where demand for luxury homes is high, demolition can be a smart investment. However, in urban areas where affordable housing is a pressing issue, renovations are often the better path, as constructing new homes at lower price points has become nearly impossible.

Perhaps the most critical aspect of a successful demolition project is selecting the right builder. Carlton warns that while renovations may uncover existing problems, demolitions introduce new risks. With an older home, issues are generally known and can be addressed. But when building from scratch, unexpected complications can arise. He stresses the importance of thoroughly vetting builders, checking references, and speaking with past clients to understand their experiences. While portfolios may showcase stunning completed projects, they don’t always reveal the challenges encountered along the way. Homeowners who choose demolition must ensure they have a skilled and trustworthy team to navigate the complexities of construction.

Ultimately, the decision to renovate or demolish depends on personal goals, budget constraints, and local market conditions. Some homeowners may prefer a blank slate and a fully customized home, while others might find that renovating an existing structure offers a more cost-effective and manageable solution. By weighing the pros and cons and thoroughly understanding the process, homeowners can make the choice that best suits their long-term needs and lifestyle.

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This sharp increase, coupled with a dire shortage of available housing, has created a fierce competition where only the highest bidders secure accommodation, leaving many scrambling for alternatives.

The housing shortage has provided landlords and estate agents with an opportunity to exploit the situation. Agents are now charging exorbitant fees for services such as commission, agreements, and maintenance charges, adding further strain on those seeking shelter. The economic hardship gripping the country has only exacerbated the plight of tenants, with many forced to relocate to less desirable and more distant areas in search of affordable housing.

In Lagos, rents for newly constructed one-bedroom apartments in prime locations like Victoria Island, Lekki, and Ikeja GRA now range from ₦1.5 million to ₦3.5 million annually, a staggering increase from ₦600,000 to ₦1.2 million earlier in 2024. Two-bedroom apartments in these areas, which are in high demand but short supply, now cost between ₦5 million and ₦9 million, depending on amenities, while three-bedroom units fetch up to ₦14 million. For those unable to afford these prices, areas like Ayobo, Mowe-Ofada, and Ikorodu have become last resorts, despite the increased commuting costs they entail.

The crisis is no less severe in Abuja, where neighborhoods like Wuse 2, Asokoro, and Gwarinpa have witnessed rents for one-bedroom apartments soar to as much as ₦13 million, depending on size and location. The demand has overwhelmed supply, forcing many to compete for limited options. As a result, landlords in suburban areas have seized the opportunity to hike rents significantly.

One Lagos-based estate agent, Alhaji Sunday Agbabiaka, noted that properties in previously affordable areas like Ipaja and Ayobo have seen rental costs double or triple within a year due to overpopulation and soaring demand. “The demand for accommodation far outweighs the available supply. Landlords know this and are taking advantage of the situation. It’s not unusual to see 10 people competing for a single apartment, which inevitably leads to higher rents,” he explained.

Beyond the issue of demand and supply, rising construction costs have also contributed to the crisis. A landlord in Ikeja, who preferred to remain anonymous, blamed the situation on the escalating prices of building materials, which have made constructing new homes increasingly expensive. “Inflation is driving up costs everywhere, and landlords are using rental income as a way to survive,” he said.

Real estate experts have confirmed that Nigeria’s rental market is in the grips of an unprecedented crisis. Lagos-based surveyor and valuer, Olufemi Oyedele, emphasized that the housing deficit, estimated at nearly 20 million units, is a major driver of the problem. Combined with the high cost of building materials, rents in many parts of Lagos have risen almost threefold in the past year. Oyedele pointed out that even completed buildings often remain vacant due to poor enforcement of laws against abandoned properties. “If there were heavy taxes on abandoned properties, landlords would be incentivized to put them to use, easing the market pressure,” he argued.

Abuja-based real estate practitioner Osilama E. Osilama linked the housing crisis to broader economic challenges. He criticized the federal government for failing to mitigate the effects of fuel subsidy removal, which has triggered inflation across all sectors. “The surge in transportation costs has a domino effect, raising prices for food, building materials, and everything in between. This inflation is eroding the purchasing power of Nigerians, making it harder for them to afford housing,” Osilama explained.

He also condemned the abrupt nature of the subsidy removal, calling for a phased approach to ease the burden on citizens. Additionally, he proposed redirecting funds from ineffective poverty alleviation programs to develop robust public transportation systems, which could offset the rising cost of commuting for those forced to live in distant suburbs.

Experts agree that addressing Nigeria’s housing crisis requires comprehensive reforms. Osilama urged the government to tackle underlying economic issues by promoting job creation and sustainable growth while implementing policies to make housing more affordable. “This isn’t just about building homes; it’s about creating an environment where people can live, work, and thrive without being crushed by the weight of economic hardship,” he said.

As rents continue to climb and the housing shortage deepens, the calls for decisive government action grow louder. Without intervention, the gap between demand and supply will only widen, leaving millions of Nigerians struggling to find and afford a place to call home.

The post Rent Soars to Unprecedented Highs Amid Nigeria’s Housing Crisis appeared first on Housing TV Africa.

A retrospective analysis of the 2024 real estate market shows declining purchasing power due to high inflation, which peaked at 34.6% in November last year. Combined with volatile exchange rates and high-interest rates, these factors have caused a dip in property sales and low demand. However, the rental market continues to thrive, fueled by necessity rather than affordability.

Analysts explain that inflation has significantly eroded consumer purchasing power, leaving many unable to afford property prices. Renting has become the only viable option for a large portion of the population. In 2024, the rental market recorded a 50% rise in demand in some locations, particularly outside city centers.

Unemployment remains a key factor driving demand for rental housing. Although unemployment rates declined slightly in 2024, they are projected to rise again in 2025, pushing more individuals towards rented accommodation. Even for those with stable jobs, the difficulty in accessing mortgages further dampens property sales, leaving renting as the primary option.

In Lagos, the rental market is particularly active, driven by rapid urbanization and a growing population estimated at 20 million. The city attracts thousands of new residents daily, drawn by job opportunities and economic prospects. About 80% of Lagos residents are renters, according to a recent report confirmed by the state’s Commissioner for Housing, Moruf Akinderu-Fatai.

Akinderu-Fatai highlighted the strain on the city’s housing situation, with over 6,000 new residents arriving daily. He acknowledged that while the rental demand poses challenges for the state government, it also presents investment opportunities for private developers to collaborate with the government on housing projects.

Abuja, Nigeria’s Federal Capital Territory, is also projected to see a surge in rental transactions in 2025, despite federal initiatives to make housing more affordable. The city’s growing population and rising demand for housing continue to pressure both the rental and sales markets.

Unlike Lagos, Abuja experienced a construction boom in 2023 and 2024, resulting in an increase in housing supply. Government-backed projects and private developments added new estates and apartment complexes to the market, creating more choices for tenants and heightened competition among landlords. Despite the oversupply, residents note that rents and property prices remain high, even in suburban areas.

Despite economic challenges, industry experts remain optimistic about the real estate sector’s growth in 2025. Wale Akinola, CEO of Earthbound Real Estate, described the year as pivotal for the industry, with opportunities for investors, developers, and first-time homeowners.

“With government-backed initiatives, urbanization, technological advancements, and growing interest from local and diaspora investors, the sector is primed to deliver unprecedented returns,” Akinola noted.

As Nigeria works to bridge its housing deficit, estimated at over 20 million units, the real estate sector in 2025 is expected to lay the foundation for long-term growth and wealth creation.

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