These are not the best of times for city dwellers. Macroeconomic pressures have made the rental market inaccessible to Nigerians, following a 100 per cent surge in rents in major commercial centres.

Nigeria has been battling an estimated 28 million housing deficit in the affordable housing segment, and efforts by the government and private sector to reverse the trend have not yielded results over the years. Less than 100,000 housing units are produced yearly despite the involvement of the government and private developers.

Progress across the construction industry has slowed recently, and property development has also slipped to its lowest level in the past five years due to higher borrowing costs, foreign exchange volatility, and a lack of infrastructure.

This inflationary pressure has affected the prices of building materials, limited home ownership, and increased prices of new homes. With the rising construction costs, many developers are reviewing home prices to maximise profits, while property owners are raising rents to meet maintenance costs. These costs have skyrocketed due to an increase in material costs over the past year, driven by fiscal policies, political instability, and fluctuations in the Nigerian Naira against the dollar.

Currently, in cities such as Lagos, Abuja, Kano, Ibadan, and Port-Harcourt, many Nigerians living in rental apartments are having challenges renting or building their homes, as the national minimum of N70,000 is inadequate to meet basic human needs such as food, health care, and education.

In most urban areas reviewed by The Guardian in Lagos, rental costs have increased by over 100 per cent in the last year. A two-bedroom apartment that was previously between N450,000 and N700,000 now costs N1 million to N1.2 million, while a three-bedroom accommodation that was previously N800,000 and N1 million is now rented out for N1.5 million and N2.5 million and above, depending on location.

The situation exists in Abuja, as a four-bedroom detached duplex house for rent costs as high as N15,000,000, a three-bedroom N6,000,000, a newly built two-bedroom apartment- N8,000,000, while a two-bedroom flat for rent costs as high as between N5 million to N12 million depending on locations.

In other locations like Port Harcourt, Rivers State, a two-bedroom flat costs between N2m and N3.5m yearly, a three-bedroom flat costs N3.5m to N8m, and a mini-flat costs N500,000 to N600,000, depending on the location. In highbrow locations in Akure, a two-bedroom flat that was previously N400,000 has increased to N450,000 and N500,000, a development that has forced some tenants to relocate to areas where rents are considered cheaper at N300,000 or N350,000.

The situation has made many urban dwellers to relocate the outskirts in search of cheaper rents, while those who could not relocate now spend over 70 per cent of their earnings on rentals because of the low purchasing power.

The concern is that major intervention to regulate the rental market through the ‘rent control’ law, which was moved by the national assembly and the Lagos State government recently has not seen the light of the day in terms of implementation.

The Guardian learnt that some property owners are taking undue advantage of the high demand for homes to hike prices. A source told The Guardian that the landlord increased the rent from N400,000 to N500,000 for a self-contained-apartment since last December without any renovation on the property.

The source said: “Some of the landlords have attributed their decision to hike rent to the fact that workers have started earning the new minimum wage.” But that argument was rebuffed by a property owner, who said that the cost of living and maintaining houses are higher now.

The Guardian that housing rents and homes for sale have increased beyond normal. “A three-bedroom flat that rented out at N1.5 million is now about N2.5 million and N3 million in some locations not considered as highbrow areas.

“It is by luck that you will get a five-bedroom duplex at N240 million for sale. A studio apartment outright sale is now as high as N55 million, two-bedroom from N85 million, three-bedroom moved from N120m to N130m and N250m depending on locations, furnishing and demand,” according to a property manager, Mr Stephen Sobo.

He explained that the rise in housing costs is a concern affecting many residents, emphasising that high inflation and increased demand have led to an increase in the price of accommodation.

Sobo said the scarcity of affordable homes has driven up demand, which in turn leads to a rise in rental prices. “Demand for housing by the segment of the population called ‘Gen Z and millennial’ is increasing. We are also seeing a shift towards relocation to less expensive communities, and hybrid working styles, creating a surge in the popularity of studio, one-bedroom, and two-bedroom apartments.

“Property managers take advantage of such situations by adjusting rents. Many people now have less money to spend on other essential expenses considering the high inflation rate currently standing at over 34 per cent as of December last year. This development has made it difficult for an average Nigerian to save and invest in other things.”

Other industry experts argued that uncontrolled migration from states with fewer opportunities to urban centres is also contributing to the rent crisis, noting that this increases demand for an undersupplied market.

A past Chairman of the Nigerian Institution of Estate Surveyors and Valuers (NIESV), Ekiti branch, Dr Sunday Olajide, lamented what he called, ‘housing poverty’ as residents in some states instead of paying high rent prefer to put up an imperfect structure in suburbs.

He pointed out that in some locations there are houses that have become unoccupied because of high rent demand from the property owners. “Demand is not well pronounced because, some people believe that instead of paying high rent, I will go and live in my village, particularly those suburbs that are closer to the city. This sometimes does not allow landlords to increase rent because if they do that there wouldn’t be any tenant asking for a house.

The Guardian learnt that the Special Adviser to the Ekiti State governor on Housing and Land Related Issues recently invited the estate agents to harmonise processes.

Olajide, who confirmed the development, said: “The public believes that agents add to the rent particularly the untrained agents who engage in unprofessional acts. Those who are trained and are under professional bodies can’t do that because they work according to the ethics of the profession,” he said.

He noted that the surge hasn’t really escalated as residents can still access a two-bedroom flat at N500,000 to N700,000 depending on the location. Despite the rate, he observed that no civil servant can pay such rent, adding that any civil servant who can afford such rent should be able to build his or her own house within two years.

According to him, the rent situation remains intractable because it is only the private sector operators in housing that are sacrificing their resources to build for the masses.

He argued that this is why the ‘rent control’, option, which seeks to peg rent by the government cannot work in urban centres like Lagos, Abuja and Port Harcourt with an economy that remains static.

“Government should see housing provision as a social service and subsidise housing rather than being capitalist. The government should also implement policies that will cushion the effects of inflation and the high cost of living on Nigerians. Regrettably in Nigeria, there is no room for the poor,” he said.

A past chairman of the Nigerian Institution of Estate Surveyors and Valuer’s Real Estate Consulting division, Niyi Fayoju, identified cost-push, inflation and demand-pull as factors responsible for the hike, adding the components for producing houses went up because of the inflation-pushed up cost of building in the country.

“The demand for housing in some urban centres far outstripped the supply. There is a period to design, move to site and build. The few that are available, the developers have to break even and make a profit and so they push up the price. The fact is that the developers are few, there is no serious competition, and the options for the people that want to buy are limited, hence, the prices go up,” Fadoju said.

On housing low-income earners, he said: “We need to look at housing beyond building; people must own their own houses. Housing programmes should include making people have places to rent and government helps by giving tax incentives to developers of rental houses for low-income earners, as well as incentives to investors in social housing.

“Through that, the government then can control the rent and that will be available to those within certain income levels. They also have to deploy the use of technology to ensure those that need the houses get it.”