Lagos residential property market remains deeply undersupplied despite a surge in development activity, according to the Lagos Real Estate Development Pipeline Report 2025/2026 released by Estate Intel. The report, published on February 4, 2026, estimates that while there ares more than 34,800 housing units currently in the pipeline, the city still faces a massive housing deficit exceeding 2.7 million units.
With an existing residential stock of only 1.8 million units, the current development pace is failing to keep up with the rapid urbanization and inward migration of Africa’s most populous city.
The report highlights a significant “mismatch” in the types of homes being built. Developers are increasingly gravitating toward luxury and deluxe-grade projects to protect their profit margins against high construction costs and currency volatility.
By denominating prices in US dollars or linking them to foreign currency, these developers shield themselves from inflation but simultaneously widen the affordability gap. Consequently, the shortfall is most severe in the middle-income and affordable segments, where demand is highest but new supply is almost non-existent.
Economic pressures are also driving up costs for existing residents. Sale prices for three-bedroom apartments in prime areas like Ikoyi, Victoria Island, and Lekki Phase 1 have surged by 38% to 60% annually over the last five years.
In middle-income areas like Yaba and Ajah, rents are also rising sharply as landlords adjust prices to offset the devaluation of the Naira. Despite these hikes, net absorption remains high because the supply gap is so large that any available unit, even at inflated prices is typically reoccupied almost immediately.
The Lagos State Government has acknowledged this crisis, with Commissioner for Housing Moruf Akinderu-Fatai announcing an intensified strategy for 2026 to tackle the deficit. The state is prioritizing the completion of “high impact” projects such as Sangotedo Phase II and Egan-Igando Clusters, while leveraging Public-Private Partnerships (PPPs) to incentivize affordable builds.
To make homeownership accessible, the state continues to promote its Rent-To-Own programs, allowing first-time buyers to move in with a 5% down payment. However, analysts warn that without more coordinated policy support to lower construction costs, the market will continue to favor the wealthy while the majority of Lagosians remain renters.
