Economy Contractions and the Rental Housing Affordability Situation in the Lagos Property Market: A Short-Term Outlook

With real estate cycles being a subset of business cycles, contraction stages are often perceived as short-term, after which a revival of the property market sets in. The worsening Nigerian economy has further complicated the issues of housing supply and affordability in economic nerves like Lagos. This study examined the fundamental and associated factors contributing to rental housing affordability issues between 2019-2023 in Lagos. This article is produced with the intention of providing a market data update on rental housing price movements for both the mainland and island zones of Lagos, as well as comparing their affordability convenience for income-earners or households based on the rent-income ratio. The study adopted a mixed research design and various data sources were consulted in analyzing the fundamentals, rent and affordability trends. The study discovered that affordability convenience ratios for the various income bands had deteriorated further between 2019 and 2023 in Lagos mainland (8%) and island (9%). 67% and 80% of income earners are paying above the optimal 30% of their personal or household income in meeting their rental demand in Lagos mainland and island respectively. The paper suggested the application of fundamental, institutional and environmental strategies to combating the current phenomenon.