Lagos Ranks Fourth Most Expensive City for House Rent in Africa — Report

Lagos Ranks Fourth Most Expensive City for House Rent in Africa — Report

Lagos has been ranked as the fourth most expensive city for house rent in Africa, according to a new report by Fortren & Company, highlighting a growing affordability crisis that is reshaping urban living patterns in Nigeria’s largest city. The report, which examined the average rent for two-bedroom apartments across Africa’s key cities, places Lagos behind Abidjan, Cape Town, and Accra, which occupy the first three positions, while other cities featured include Douala, Nairobi, Kigali, Dar es Salaam, Cairo, and Casablanca.

In Lagos’ high-end neighbourhoods such as Ikoyi, Banana Island, and Victoria Island, the average annual rent for a luxury two-bedroom apartment is approximately $19,379 (around ₦26.8 million). While still lower than Abidjan’s $41,671, Cape Town’s $27,813, and Accra’s $26,299, analysts note that Lagos’ rate of rent increase is among the steepest in Africa. Over the past two years, rents have surged by 50% to 200%, driven by rising demand, limited housing supply, and macroeconomic pressures.

Experts warn that the escalating rental costs are putting a significant strain on household incomes, with the income-to-rent ratio in some cases reaching 70%, well above the 30% affordability benchmark recommended by the United Nations. Many residents have been forced to relocate from central districts to suburban areas, yet even these outskirts see rents for standard two-bedroom apartments ranging between ₦1.5 million and ₦2.5 million annually, demonstrating the widespread nature of the housing crunch.

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The surge in rental prices has been attributed to a combination of structural and economic factors, including high inflation, rising construction costs, and elevated borrowing rates. Limited land availability, speculative investments, and currency devaluation have also pushed rents higher, particularly in premium districts. Many luxury apartments in areas like Ikoyi and Victoria Island are priced in U.S. dollars, restricting access to high-income earners and expatriates, with some ultra-luxury properties commanding up to $130,000 per year.

Across Africa, similar trends are observed. In Cape Town, rising demand from both domestic and international residents has led landlords to prioritise short-term rentals, tightening long-term housing supply. In Accra, strong economic growth and the presence of multinational companies and diplomatic missions have created intense competition for high-end apartments, often supported by foreign-currency housing allowances.

Structural inefficiencies in rental systems further exacerbate the problem. Many tenants are required to pay one to two years’ rent upfront, a practice common in Lagos and other African cities, which raises financial barriers and limits access for middle- and low-income residents.

Despite the challenges, analysts see investment opportunities in build-to-let residential units, particularly smaller one- and two-bedroom apartments that cater to growing urban populations. However, without policy interventions to expand housing supply, improve financing options, and regulate rental practices, Lagos’ housing affordability crisis is likely to worsen, with long-term consequences for urban development, economic stability, and social equity.