Rental crisis deepens as Nigerians spend up to 70% of income on housing

Millions of Nigerians are grappling with a worsening housing crisis as tenants and prospective homebuyers now spend well above the global affordability threshold on rent, with many allocating up to 60-70% of their income on housing.

The development, which experts say reflects growing pressure on the country’s property market, far exceeds the 30% rent-to-income benchmark recommended by the United Nations for sustainable and affordable housing.

The findings indicate that sharp increases in rents in major cities including Lagos, Abuja and Port Harcourt over the past two years have put a strain on the finances of working-class Nigerians, forcing many to move to distant suburbs or cut spending on other basic needs.

The rent-to-income ratio measures the percentage of a tenant’s gross monthly earnings spent on rent and is widely used to determine housing affordability and financial stability.

However, analysts say the ratio in Nigeria has risen to alarming levels due to rising construction costs, growing urban population and limited housing supply.

A Lagos-based business executive, Oluwasegun Olamilekan, recounted his experience, describing the situation as unbearable for average workers.

According to him, he had been paying N450,000 a year for a two-bedroom apartment in a Lagos suburb until his landlord recently increased the rent to N850,000.

“I chose to live outside the city center because I knew I couldn’t afford city rent on my salary. Suddenly the landlord increased the rent to N850,000,” he said.

Olamilekan noted that the new rate is still lower than what some landlords are now charging new tenants in the area.

“Some landlords ask for up to N1.2 million from new tenants, excluding agency, contract and security fees. When you add it all together, you could end up paying between N1.5 million and N2 million,” he added.

Industry experts say the situation has broken the affordability threshold for many Nigerians looking to rent or own homes.

Alitheia Capital co-founder and Purple Group chairman, Olajumoke Akinwunmi, has warned that the property market is experiencing severe strain, with renters in Nigeria now spending up to 70% of their income on housing.

“This figure alone should shake us. Those looking to build or buy today are facing not only barriers, but also cliffs,” he said at a real estate forum in Lagos.

He added that current realities are forcing both developers and buyers to reconsider their expectations in a volatile market.

According to Akinwunmi, would-be homeowners who had spent years saving for equity contributions are finding that their savings now represent only a fraction of what is required due to rising construction costs.

“Buyers’ dreams have been dashed to zero. Developers also find it difficult to determine realistic prices because production costs change frequently,” he said.

Experts attribute the sharp increase in rents to Nigeria’s rapidly expanding population, accelerated urbanization and sharp increases in the cost of building materials.

Data from the Office for National Statistics shows that although inflation fell for the tenth consecutive month from January 2026, prices of key construction materials continued to rise.

The price of a 50kg bag of cement, which sold for about N7,500 at the end of 2025, rose to between N11,500 and N15,000 in different parts of the country at the beginning of 2026.

Professor Timothy Nubi, founding director of the Center for Housing and Sustainable Development at the University of Lagos, said rising costs of building materials were directly pushing up house prices and rents.

According to him, in the last quarter, steel prices increased by about 20%, while sharpsand prices increased by about 25%.

He noted that the rising cost of construction equipment was already translating into higher property prices and rental levels in major Nigerian cities.

Industry stakeholders warn that without deliberate government intervention to increase housing supply and stabilize construction costs, Nigeria’s housing affordability crisis could worsen, pushing more urban residents into financial distress.

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