Affordable Housing Is Booming: But Can Nigerians Still Afford to Rent?
BY: Landnest Homes And Properties
BY: Landnest Homes And Properties
Wednesday, August 27, 2025
August 27, 2025
Walk through any developing neighborhood in Nigeria today: Ibadan, Lagos, Abuja, even Makurdi, and you’ll see it. Red-roofed bungalows. Terraced buildings still smelling of cement. Estate gates painted in fresh blue and white. Everyone is talking about affordable housing.
But despite this visible growth, a pressing question remains: Can the average Nigerian actually afford to live in these homes?
The real estate sector is expanding. New government-backed projects and private estate launches continue to increase. Still, most urban dwellers find themselves spending more than 50% of their income on rent, well above the global affordability threshold of 30%.
So, what exactly is going on?
1. What Is “Affordable Housing” in Nigeria?
Let’s start with definitions.
Affordable housing generally refers to homes whose cost (rent or mortgage) does not exceed 30–35% of the household's income. In Nigeria, this term is used broadly to describe any home that is cheaper than premium market options.
The federal government, via the National Housing Programme (NHP), and private developers have built thousands of units across the country, especially in:
Ogun (e.g., Asero, Ilaro)
Lagos (e.g., Ibeju-Lekki, Egan-Igando)
Oyo (e.g., Ajoda New Town, Ido, Moniya)
FCT and Nasarawa
But here’s the catch: many of these “affordable” units still cost between ₦15 million and ₦25 million, or around ₦500,000–₦1.2 million annually in rent equivalents.
Tip: Just because a home is smaller doesn’t mean it’s affordable. Look at how it compares to average local income.
Walk through any developing neighborhood in Nigeria today: Ibadan, Lagos, Abuja, even Makurdi, and you’ll see it. Red-roofed bungalows. Terraced buildings still smelling of cement. Estate gates painted in fresh blue and white. Everyone is talking about affordable housing.
But despite this visible growth, a pressing question remains: Can the average Nigerian actually afford to live in these homes?
The real estate sector is expanding. New government-backed projects and private estate launches continue to increase. Still, most urban dwellers find themselves spending more than 50% of their income on rent, well above the global affordability threshold of 30%.
So, what exactly is going on?
1. What Is “Affordable Housing” in Nigeria?
Let’s start with definitions.
Affordable housing generally refers to homes whose cost (rent or mortgage) does not exceed 30–35% of the household's income. In Nigeria, this term is used broadly to describe any home that is cheaper than premium market options.
The federal government, via the National Housing Programme (NHP), and private developers have built thousands of units across the country, especially in:
Ogun (e.g., Asero, Ilaro)
Lagos (e.g., Ibeju-Lekki, Egan-Igando)
Oyo (e.g., Ajoda New Town, Ido, Moniya)
FCT and Nasarawa
But here’s the catch: many of these “affordable” units still cost between ₦15 million and ₦25 million, or around ₦500,000–₦1.2 million annually in rent equivalents.
Tip: Just because a home is smaller doesn’t mean it’s affordable. Look at how it compares to average local income.
2. Rent Outpaces Income
In Nigeria’s major cities, the income-to-rent ratio is unsustainable for most renters.
Lagos State:
Average monthly salary: ~₦90,000–₦120,000
Average rent for a one-bedroom flat: ₦1.2 million/year (₦100,000/month)
That’s 80–100% of monthly earnings
Ibadan:
Average salary: ~₦60,000–₦90,000
One-bedroom rent in Bodija or Akobo: ₦400,000–₦600,000/year
In many cases, tenants rely on bulk payments, usually one or two years in advance, further worsening the financial strain.
Tip: If your rent exceeds one-third of your income, it’s time to explore locations with newer, flexible housing initiatives.
3. Housing Supply Is Growing, But Not Fast Enough
According to the Federal Mortgage Bank of Nigeria, over 20 million housing units are needed to close the housing gap. While over 10,000 units have been delivered through recent public-private partnerships, this barely makes a dent.
Why?
Urban migration continues at a rapid pace
Population growth outpaces construction
Land documentation delays slow down new developments
Mortgage access remains low due to tight lending requirements
While developers are building, they often target middle- and upper-income buyers — not minimum-wage earners or small business owners.
2. Rent Outpaces Income
In Nigeria’s major cities, the income-to-rent ratio is unsustainable for most renters.
Lagos State:
Average monthly salary: ~₦90,000–₦120,000
Average rent for a one-bedroom flat: ₦1.2 million/year (₦100,000/month)
That’s 80–100% of monthly earnings
Ibadan:
Average salary: ~₦60,000–₦90,000
One-bedroom rent in Bodija or Akobo: ₦400,000–₦600,000/year
In many cases, tenants rely on bulk payments, usually one or two years in advance, further worsening the financial strain.
Tip: If your rent exceeds one-third of your income, it’s time to explore locations with newer, flexible housing initiatives.
3. Housing Supply Is Growing, But Not Fast Enough
According to the Federal Mortgage Bank of Nigeria, over 20 million housing units are needed to close the housing gap. While over 10,000 units have been delivered through recent public-private partnerships, this barely makes a dent.
Why?
Urban migration continues at a rapid pace
Population growth outpaces construction
Land documentation delays slow down new developments
Mortgage access remains low due to tight lending requirements
While developers are building, they often target middle- and upper-income buyers — not minimum-wage earners or small business owners.
4. Mortgages Are Still Out of Reach
The federal government, through initiatives like the Nigerian Mortgage Refinance Company (NMRC) and Family Homes Funds, has attempted to increase access to home loans with longer tenures and better rates.
But uptake is slow. Why?
Most banks require formal employment records
Down payments (often 20–30%) are unaffordable for most
Interest rates still range between 11% and 15%
There’s low awareness of how the mortgage process even works
Tip: For now, buying land through structured payment plans may offer more realistic ownership pathways than mortgage loans.
5. Private Developers Focus on Land, Not Rentals
One hidden cause of the rent crisis? Most developers focus on land sales, not rental housing.
Why?
Land is easier to sell and manage
It provides developers with immediate returns
There’s less regulatory burden compared to managing rental units
This has created an imbalance: while estate lands sell fast, few are immediately livable. Even fewer offer options for renters.
Tip: Look out for estates offering rent-to-own options or those building full units alongside land sales.
4. Mortgages Are Still Out of Reach
The federal government, through initiatives like the Nigerian Mortgage Refinance Company (NMRC) and Family Homes Funds, has attempted to increase access to home loans with longer tenures and better rates.
But uptake is slow. Why?
Most banks require formal employment records
Down payments (often 20–30%) are unaffordable for most
Interest rates still range between 11% and 15%
There’s low awareness of how the mortgage process even works
Tip: For now, buying land through structured payment plans may offer more realistic ownership pathways than mortgage loans.
5. Private Developers Focus on Land, Not Rentals
One hidden cause of the rent crisis? Most developers focus on land sales, not rental housing.
Why?
Land is easier to sell and manage
It provides developers with immediate returns
There’s less regulatory burden compared to managing rental units
This has created an imbalance: while estate lands sell fast, few are immediately livable. Even fewer offer options for renters.
Tip: Look out for estates offering rent-to-own options or those building full units alongside land sales.
6. The Rental Market Remains Largely Unregulated
Unlike in many countries, Nigeria lacks a standardised rent control system. Although Lagos introduced a monthly rent initiative through the Lagos State Rental Scheme (LSRS), implementation has been slow and limited to pilot areas.
As a result:
Landlords demand bulk rent
Rent reviews happen abruptly
Tenants have little legal protection
Tip: If you’re a tenant, review your tenancy agreement carefully. Avoid verbal arrangements and insist on documented terms.
7. What’s Working: Emerging Hope in Suburbs
Suburbs like:
Ido, Egbeda, Moniya (Ibadan)
Mowe, Ibafo (Ogun)
Karu, Gwagwalada (FCT/Nasarawa)
…are seeing new housing schemes with better affordability. Some developers like Landnest now offer:
6–12 month payment plans
Starter homes from ₦4 million
Shared infrastructure for lower entry costs
These locations may lack central-city glam, but they provide space, affordability, and growth.
6. The Rental Market Remains Largely Unregulated
Unlike in many countries, Nigeria lacks a standardised rent control system. Although Lagos introduced a monthly rent initiative through the Lagos State Rental Scheme (LSRS), implementation has been slow and limited to pilot areas.
As a result:
Landlords demand bulk rent
Rent reviews happen abruptly
Tenants have little legal protection
Tip: If you’re a tenant, review your tenancy agreement carefully. Avoid verbal arrangements and insist on documented terms.
7. What’s Working: Emerging Hope in Suburbs
Suburbs like:
Ido, Egbeda, Moniya (Ibadan)
Mowe, Ibafo (Ogun)
Karu, Gwagwalada (FCT/Nasarawa)
…are seeing new housing schemes with better affordability. Some developers like Landnest now offer:
6–12 month payment plans
Starter homes from ₦4 million
Shared infrastructure for lower entry costs
These locations may lack central-city glam, but they provide space, affordability, and growth.
The Takeaway
Nigeria’s housing sector is expanding, but real affordability remains elusive for millions of renters. For now, rental burden continues to eat up salaries, and bulk rent payments make it worse.
Yet, opportunity exists.
By looking beyond the hype and focusing on verifiable, flexible housing options, especially in growing suburbs, buyers and tenants can find better value for money.
At Landnest, we believe affordability is a standard not just a word. It helps clients secure land and homes in high-growth corridors like Ajoda New Town, Ido, and Moniya, backed by flexible plans and clear documentation.
Send “HOME” via WhatsApp to speak with a Landnest official about affordable options in your budget.
The Takeaway
Nigeria’s housing sector is expanding, but real affordability remains elusive for millions of renters. For now, rental burden continues to eat up salaries, and bulk rent payments make it worse.
Yet, opportunity exists.
By looking beyond the hype and focusing on verifiable, flexible housing options, especially in growing suburbs, buyers and tenants can find better value for money.
At Landnest, we believe affordability is a standard not just a word. It helps clients secure land and homes in high-growth corridors like Ajoda New Town, Ido, and Moniya, backed by flexible plans and clear documentation.
Send “HOME” via WhatsApp to speak with a Landnest official about affordable options in your budget.
LET’S GET IN TOUCH
The Ultimate Real Estate Investment Provider
Discover the unthinkable return of investment on real estate. We are committed to making this journey a seamless experience for you.
Visit Us at
Head Office:
No 2, Dele Adetoro Street, Bodija Ibadan.
Branch Office:
Suite 101 Block C, Akord Shopping Mall, Along Lekki_Epe, Expressway Bogije, Ibeju-Lekki, Lagos State.
EFCC via its Special Control Unit Money Laundering (SCUML)
We are also accredited by the Real Estate Developers Association of Nigeria (REDAN)
Registered with Corporate Affairs Commission, Nigeria (RC:7080017)
© LandNest Homes & Properties. 2024.
LET’S GET IN TOUCH
The Ultimate Real Estate Investment Provider
Discover the unthinkable return of investment on real estate. We are committed to making this journey a seamless experience for you.
Visit Us at
Head Office:
No 2, Dele Adetoro Street, Bodija Ibadan.
Branch Office:
Suite 101 Block C, Akord Shopping Mall, Along Lekki_Epe, Expressway Bogije, Ibeju-Lekki, Lagos State.
Registered under EFCC via its Special Control Unit Money Laundering (SCUML)
We are also accredited by the Real Estate Developers Association of Nigeria (REDAN)
Registered with Corporate Affairs Commission, Nigeria (RC:7080017)
© LandNest Homes & Properties. 2024.
LET’S GET IN TOUCH
The Ultimate Real Estate Investment Provider
Discover the unthinkable return of investment on real estate. We are committed to making this journey a seamless experience for you.
Visit Us at
Head Office:
No 2, Dele Adetoro Street, Bodija Ibadan.
Branch Office:
Suite 101 Block C, Akord Shopping Mall, Along Lekki_Epe, Expressway Bogije, Ibeju-Lekki, Lagos State.
EFCC via its Special Control Unit Money Laundering (SCUML)
We are also accredited by the Real Estate Developers Association of Nigeria (REDAN)
Registered with Corporate Affairs Commission, Nigeria (RC:7080017)
© LandNest Homes & Properties. 2024.
LET’S GET IN TOUCH
The Ultimate Real Estate Investment Provider
Discover the unthinkable return of investment on real estate. We are committed to making this journey a seamless experience for you.
Visit Us at
Head Office:
No 2, Dele Adetoro Street, Bodija Ibadan.
Branch Office:
Suite 101 Block C, Akord Shopping Mall, Along Lekki_Epe, Expressway Bogije, Ibeju-Lekki, Lagos State.
EFCC via its Special Control Unit Money Laundering (SCUML)
We are also accredited by the Real Estate Developers Association of Nigeria (REDAN)
Registered with Corporate Affairs Commission, Nigeria (RC:7080017)
© LandNest Homes & Properties. 2024.