Short-let apartments take over property market as annual rent skyrockets

As the cost of annual property rent continue to rise in major states across the country,  short-term rental market which is driven by platforms like Airbnb, is gradually becoming the new alternative for Nigerians With housing shortages becoming more pronounced in major cities, particularly due to rapid urbanisation and a rising population, many Nigerians are […]

As the cost of annual property rent continue to rise in major states across the country,  short-term rental market which is driven by platforms like Airbnb, is gradually becoming the new alternative for Nigerians

With housing shortages becoming more pronounced in major cities, particularly due to rapid urbanisation and a rising population, many Nigerians are turning to short-let properties for flexibility and affordability.

In cities such as Lagos, Port Harcourt, and Abuja, short-term rentals and serviced apartments are becoming a preferred investment strategy.

Checks by Daily Trust has shown that annual property rent has increased by over 300 per cent in the last three years

This shift is fuelled by the high costs of long-term rentals, which are out of reach for many middle-class families, and the increasing influx of tourists, expatriates, and business professionals who seek temporary accommodations.

The growing popularity of platforms like Airbnb and local short-let services has further fuelled this market expansion, making it an essential part of Nigeria’s housing landscape.

In return, property owners are capitalising on the lucrative opportunities that short-term rentals provide, offering fully furnished homes to meet the demand for quality but temporary housing solutions.

A recent report shows that the short-let market in Lagos State, Nigeria’s commercial capital, is gaining momentum, with revenue projected to rise to N300 bn in 2025 from N264.3 bn last year, a report by Edala Homes stated.

The report, titled ‘Lagos Short-let Market 2024’, surveyed 5,806 listings, with 78 per cent of the data sourced from AirDNA and the remaining 22 per cent tracked by Edala Homes

It was developed to provide in-depth insight into the Lagos short-let market, focusing on the performance of various submarkets.

The report said, “In 2024 alone, the Lagos short-let market’s total estimated revenue was N264.3 bn. This figure underscores the sector’s significance in the broader hospitality industry and its contribution to Lagos’s economy.

“Key demand drivers include Lagos’ strategic positioning as a business and leisure hub, an influx of domestic and international events, and the rising popularity of remote work and digital nomadism, and the forecast for 2025 indicates a total market revenue of N300 bn, marking a significant growth trajectory.

“The market experienced substantial growth in 2024, driven by increasing demand for flexible and luxurious accommodations across various submarkets. As a vital component of Nigeria’s hospitality sector, Lagos’s short-let market caters to business travellers, tourists, expatriates, and local professionals.”

A breakdown of the report revealed that Ikoyi led in luxury accommodations, generating N37.5 bn, and revenue is forecasted to reach N42 bn. Victoria Island, balancing luxury and accessibility, recorded N19.3 bn, with expected growth to N21.6 bn, and Banana Island, an exclusive market, contributed N11 bn, expected to reach N12.4 bn.

“Lekki Phase I and Lekki Peninsula II remained key players, with revenues of N94 bn and N70 bn, respectively, projected to grow. Ikeja, Surulere, and Yaba also demonstrated strong performance, each poised for continued growth in 2025, reflecting the robust demand across Lagos.”

 

The rising numbers

According to Statista, Nigeria was projected to have generated revenue of $595.60m in the vacation rentals market in 2025

It stated, “The revenue is expected to grow annually at a rate of 10.35 per cent, resulting in a projected market volume of US$883.18m by 2029. By 2029, it is expected that the number of users in Nigeria’s vacation rental market will reach 17.33 million users.

“The user penetration is projected to increase from 6.1 per cent in 2025 to 6.7 per cent by 2029. The average revenue per user is expected to be $41.82. Moreover, it is expected that 70 per cent of the total revenue of Nigeria’s vacation rental market will be generated through online sales by 2029.” the report said

 

What it means – Expert

Experts have stated that the growing demand for short-let apartments in cities like Lagos, Abuja, Port Harcourt  is primarily driven by their ability to cater for the needs of a diverse clientele which includes diaspora visitors and young, upwardly mobile professionals seeking flexible, short-term accommodation.

A real estate expert, Dayo Daramola said Shorlet/Airbnb was a rapidly growing market as far as real estate is concerned and a very disruptive force in Nigeria’s housing market.

He said, “Due to the security of income and capital growth, an investor would prefer to put his/her property in a good location for Airbnb use because of its daily rent rather than committing to long-term tenants who pay yearly rents. This is because investors can earn significantly more through daily rental income, especially when located in high-demand areas.

However,  beyond pricing, the expansion of short-term rentals is also tightening the supply of long-term housing.

Analysts warn that as more landlords convert residential properties into short-stay units, fewer homes are available for permanent residents.

A real estate expert Basil Kanu said “One of the implications of the rising attraction of Airbnb of the boom is that landlords are now prioritising higher returns, which is pushing up rents across the board.

“The situation is resulting to higher rents which is pushing more people out of the housing net and increasing housing deficits, while investors continue to favour short-term gains, further reducing supply,” he explained