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Nigeria: The growing number of short-let apartments in Nigeria’s major cities is reducing the supply of long-term rental housing, according to a report on the country’s property market.
It is now more common in Lagos, Abuja, Port Harcourt and Ibadan, where more landlords are converting residential apartments into short-term accommodation.
Short-let apartments are becoming popular due to the growing demand by business travellers, tourists, expatriates and professionals, the report said. This has led to the growth of serviced accommodation arrangements amongst many property owners, who are looking to eliminate the need for annual leases.
Real estate analysts said: “Many landlords are opting to convert conventional rental properties into short-let apartments because they offer significantly higher returns than annual leases.”
The report said the growing number of short-let properties is reducing the number of homes available for long-term tenants. This has added to the already strained rental market in housing-scarce urban areas.
It also stated that its expansion has led to concerns about planning regulations and the management of short-term rentals. Industry stakeholders believe clearer licensing and planning guidelines could help authorities better understand the impact of short-let accommodation on local housing markets.
The report stated that the supply of new homes, particularly affordable homes and build-to-rent, could be expanded to help create a balance between investment opportunities and the demand for more long-term rental housing.
Highlights:
- Short-let apartments are expanding across Lagos, Abuja, Port Harcourt and Ibadan, reducing the supply of long-term rental housing in Nigeria’s largest cities.
- Growing demand from business travellers, tourists, expatriates and professionals is encouraging more landlords to convert residential apartments into short-term serviced accommodation.
- Real estate analysts said higher returns from short-let apartments are prompting property owners to replace traditional annual rental agreements with flexible short-term stays.
- The report said the growth of the short-let sector is increasing pressure on Nigeria’s long-term rental market and raising concerns about housing affordability in urban areas.
- Industry stakeholders said clearer planning rules, licensing frameworks and increased housing supply, including affordable housing and build-to-rent developments, could help balance investment growth with long-term housing demand.
