A new report by Fortren & Company has placed Lagos as the fourth most expensive city in Africa forrental housing, highlighting growing pressure on affordability that is pushing many residents away from central urban areas.
The study, which analysed average rents for two-bedroom apartments across major African cities, ranked Abidjan first, followed by Cape Town and Accra. Lagos came in fourth, ahead of cities such as Douala, Nairobi, Kigali, Dar es Salaam, Cairo, and Casablanca.
In Lagos’ premium neighbourhoods—including Ikoyi, Victoria Island, and Banana Island—the average yearly rent for a luxury two-bedroom apartment is estimated at about $19,379 (roughly ₦26.8 million). This is significantly lower than Abidjan’s $41,671, Cape Town’s $27,813, and Accra’s $26,299 for similar properties.
However, analysts warn that although Lagos is fourth on the list, rent inflation in the city is among the fastest on the continent. Over the past two years, residential rents have reportedly surged by 50 to 200 percent, driven by strong demand, limited housing supply, and broader economic pressures.
Housing experts note that affordability has become a major concern, with some estimates showing that renters in Lagos now spend up to 70 percent of their income on housing—far above the 30 percent affordability benchmark recommended internationally.
The rising cost of rent is also reshaping settlement patterns in the city. Many residents are moving from central districts to outer suburbs in search of cheaper accommodation. Yet even in these outlying areas, rents for standard two-bedroom apartments now typically range between ₦1.5 million and ₦2.5 million annually, showing that the pressure is widespread.
Market observers attribute the situation to a mix of factors, including high inflation, expensive construction materials, elevated borrowing costs, and the weakening naira. These conditions have made homeownership more difficult, increasing demand in the rental sector and pushing prices higher.
Another key driver is the pricing structure in high-end areas, where many luxury properties are denominated in US dollars. This practice, analysts say, limits access to a small segment of wealthy Nigerians and expatriates, keeping rents elevated.
Some ultra-luxury apartments in exclusive parts of Ikoyi reportedly command as much as $130,000 per year, underscoring the sharp divide within Lagos’ housing market.
Across Africa, similar trends are visible. Cape Town has seen rent increases of nearly 70 percent since 2014, partly due to rising demand and the growth of short-term rental platforms. In Accra, strong economic activity and expatriate demand—boosted by multinational companies and diplomatic missions—continue to strain limited housing supply.
The report also highlights structural issues affecting rental markets across the continent. In Nigeria and several other African countries, tenants are often required to pay one to two years’ rent upfront, a practice that places heavy financial pressure on households.
Experts argue that this system persists due to weak credit infrastructure and low trust between landlords and tenants, prompting property owners to demand large advance payments as security.
While the housing crisis continues to deepen, analysts say opportunities exist for investors, particularly in developing affordable rental housing such as one- and two-bedroom apartments, which are increasingly in demand in urban centres like Lagos.
However, they caution that without significant policy reforms to expand housing supply, improve financing access, and regulate rental practices, affordability challenges in Lagos are likely to worsen in the coming years.
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