Lagos faces a serious challenge as its housing deficit grows by 15 percent. The city’s rapid population explosion fuels the demand for homes, but supply lags behind. This post explores the reasons behind the rising housing crisis, its impact on residents, and what measures might help bridge the gap.
Lagos faces a growing housing gap, which has increased by 15% over recent years. The shortage jumped from about 2.95 million units in 2016 to an estimated 3.4 million by 2025.
A new report, called the ‘State of Lagos Housing Market Report (Vol. 3)’, was created by the Roland Igbinoba Real Foundation for Housing and Urban Development (RIRFHUD). It shows a mix of progress and ongoing inequality in Lagos’s property market.
The study used field surveys, property data, and satellite images, making it one of the most detailed independent sources on Lagos real estate so far. It builds on previous reports from 2009 and 2016. The findings aim to influence future policies and investments in the housing sector.
Launched at an event in Victoria Island, Lagos, the third report shows a growing gap between luxury projects and affordable homes in both urban and nearby rural areas.
More than 70% of Lagos residents rent homes. Many spend 40% to 60% of their income on rent. This is most common in places like Lekki, Ikoyi, and Victoria Island, where luxury apartments keep getting more expensive despite economic issues.
While luxury housing and short-term rentals are booming—fueled by overseas investors and wealthy clients—affordable homes receive little funding and attention. There’s a clear mismatch between private supply and actual demand for affordable housing, especially in the city.
The report highlights Ikorodu, Badagry, and Alimosho as areas with high demand but little new building. Housing prices increased by 12% annually despite rising construction costs and economic ups and downs. Short-term rentals in wealthy areas are now yielding 15-18%, but vacancy rates are climbing in mainland zones because many people can’t afford them. Infrastructure problems, like bad roads, poor drainage, and unreliable electricity, still make many neighborhoods hard to live in.
The report warns about growing numbers of informal settlements and unregulated housing. It urges the government and private sector to work together and create more inclusive housing. It suggests key incentives like land reforms, tax breaks, and mortgage programs to help developers build affordable homes.
During this period, the Lagos housing market stayed very complex and constantly changing. Economic instability, rising building costs, and a big gap between luxury and affordable homes shaped the scene. Many stakeholders see the mismatch growing worse; they say supply no longer matches demand.
Most new developments focus on luxury houses in wealthy areas. These are often large, 3-5 bedroom homes. But most Lagos residents can’t afford such units. One developer said, “The market is full of high-end apartments, but the middle class can’t keep up.” Others agree, pointing out that too many luxury units are built, even when most people can’t buy them.
Another key issue is the difficult rules and paperwork that slow down new projects. Developers report that land titles and permits cost a lot and take a long time. Sometimes, these delays add 15 to 20% to the cost of a home. These problems discourage new investments and make building affordable housing more difficult.
