Rent projected to rise in Q4 2026 – Report

As Nigeria’s property market enters the final quarter of 2026, rising rental demand, housing affordability challenges, high construction costs, mortgage financing constraints and changing investor preferences are expected to shape activities across the real estate sector, a report by the Research and Economic Development Unit of the Housing Development Advocacy Network (HDAN) has projected

The report stated that the Nigerian property market will remain active but increasingly selective between October and December 2026, with affordable residential developments, rental housing, serviced plots and income-generating properties expected to attract greater interest than speculative luxury developments.

According to HDAN, the last quarter of 2026 will present both opportunities and challenges for property developers, investors, landlords, tenants and prospective homeowners as the industry responds to prevailing economic realities.

The organisation noted that while Nigeria continues to experience substantial housing demand, the purchasing power of many households remains inadequate to translate this demand into actual homeownership.

HDAN identified seven major developments likely to shape the Nigerian property market during the final three months of 2026.

1. Residential Rents Likely to Remain Under Upward Pressure

HDAN predicts that residential rents will remain under upward pressure in major urban centres, particularly Lagos, Abuja, Port Harcourt, Ibadan and other rapidly growing cities.

The continued movement of people into urban areas, rising household formation, limited affordable housing supply and increasing property maintenance costs are expected to sustain demand for rental accommodation.

However, the organisation warned that landlords may face growing resistance from tenants whose incomes have not increased sufficiently to accommodate repeated rent adjustments.

The report projects that more households may relocate from expensive city centres to satellite communities where accommodation is relatively affordable.

HDAN expects demand for one-bedroom and two-bedroom apartments, smaller residential units and moderately priced rental properties to remain particularly strong.

Construction costs will continue to influence property prices

HDAN identifies the cost of construction as one of the most significant factors likely to determine property prices during the final quarter of 2026.

Despite signs of moderation in inflation, developers continue to face the accumulated effects of expensive building materials, energy costs, transportation, labour, infrastructure provision and construction financing.

The organisation noted that a reduction in the rate of inflation does not automatically mean that cement, reinforcement steel, roofing materials and other construction inputs will become cheaper.

HDAN predicts that some developers may respond by reducing building sizes, adopting alternative construction technologies, reviewing architectural designs and implementing phased development strategies.

The Unit further warns that high construction costs could discourage new housing projects, thereby worsening the supply shortage and placing additional pressure on rents.

It calls for stronger government support for local building-material production, research into alternative construction materials and policies that reduce the cost of delivering affordable homes.

Mortgage financing to remain a major constraint

The report identifies inadequate access to affordable mortgage financing as one of the greatest obstacles to expanding homeownership in Nigeria.

Although the Central Bank of Nigeria reduced its monetary policy rate to 23 per cent in September 2026, HDAN cautions that this adjustment does not automatically translate into affordable long-term housing loans.

The organisation notes that many Nigerians still lack access to mortgages with repayment terms and interest rates that reflect their actual earning capacity.

HDAN therefore calls for stronger coordination among the Federal Mortgage Bank of Nigeria, Nigeria Mortgage Refinance Company, Ministry of Finance Incorporated, Family Homes Funds Limited, the Ministry of Housing and Urban Development and other relevant financial institutions.

It also advocates expanded mortgage guarantee mechanisms, rent-to-own programmes, housing cooperatives and innovative financing arrangements designed for workers in the informal economy.

The Unit predicts that mortgage-dependent home purchases will remain constrained during the final quarter unless meaningful improvements occur in lending conditions and housing finance accessibility.

Regional property market outlook for the last quarter of 2026

The report further identifies different market expectations across major Nigerian cities.

For Lagos, rental demand is expected to remain strong, particularly for apartments and moderately priced residential properties. Housing affordability will continue to influence relocation to peripheral communities and neighbouring Ogun State.

For Abuja, residential rents are expected to remain under pressure in established districts, while demand for comparatively affordable accommodation in satellite communities may increase. High land and infrastructure costs will continue to affect development.

In Ogun, residential corridors benefiting from proximity to Lagos may continue attracting land investors, first-time buyers and developers seeking relatively affordable development locations.

In Port Harcourt, residential market performance is expected to vary across locations, with established neighbourhoods and properties offering reliable rental income attracting selective investor interest.

For Ibadan, the city may continue benefiting from demand for comparatively affordable family homes, residential plots and emerging housing developments.

In Enugu, interest in residential properties, serviced land and diaspora-related housing investment is expected to remain an important driver of activity.

HDAN emphasised that these projections are directional assessments rather than guaranteed increases in property prices or transaction volumes.

Government must make housing affordability a priority

Subsequently, HDAN, through its Executive Director, Festus Adebayo, further urged governments at all levels to prioritise affordable housing finance, access to serviced land, rental housing development and critical infrastructure provision to reduce the cost of housing delivery and make homeownership more accessible to ordinary Nigerians.

Adebayo stressed that the success of Nigeria’s property market should not be measured merely by rising property values, increased real estate investments or the profitability of developers, but by the number of Nigerians who can afford decent and secure accommodation.

He further called for deliberate government policies that would stimulate housing supply, reduce the cost of construction, expand access to long-term mortgage financing and encourage private sector investment in affordable housing.

According to him, the widening gap between property prices and household incomes presents a major challenge that requires urgent policy attention.

He noted that while housing demand continues to increase, millions of Nigerians remain unable to purchase homes because property prices, mortgage conditions and rental obligations are beyond their financial capacity.

Adebayo urged federal and state governments to move beyond announcements of housing projects and establish measurable programmes that deliver homes within the financial reach of low- and middle-income earners.