Short-let rentals, particularly through platforms like Airbnb, are rapidly transforming Nigeria’s property market, particularly in major urban areas such as Lagos, JOSEPHINE OGUNDEJI writes
As Nigeria grapples with its escalating housing crisis, the short-let market has emerged as a significant alternative to traditional long-term rentals.
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.
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 response to this surge, 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.
“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 read, “In 2024, 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.”
“This growth is expected to be driven by sustained demand across all submarkets, as well as notable revenue expansion in emerging areas,” said the Chief Operating Officer, Edala Homes, Samuel Olatunde.
The Lagos market report revealed that regulatory oversight is also expected to tighten in 2025, with the Lagos State government likely to enforce stricter rules on taxation, safety standards, and customer verification protocols.
“Operators are urged to ensure compliance through proactive engagement, transparent financial reporting, and robust safety measures,” it said.
The Chief Executive Officer of Edala Homes, Temidayo Oloyede, said one notable highlight of 2024 was the surge in tourism during the festive season, popularly referred to as ‘Detty December’.
“Lagos attracted an estimated 1.2 million tourists, with approximately 60 per cent being local tourists from the South-East and FCT and 40 per cent being diaspora visitors,” he said.
In a similar vein, a recent report by Estate Intel, a data-driven market intelligence platform, stated that flexibility has been this market’s selling point, as it provides renters with a homely experience and access to hospitality services.
“Lagos, as a location for short-let rentals, has seen a massive growth of up to 263 per cent in the past three years. Seasonal demand from Nigerians in the diaspora has been the major driver of this sector, as well as the flexibility in services compared to the traditional hotel setup,” it said.
According to Statista, Nigeria is projected to generate revenue of $595.60m in the vacation rentals market by 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.”
According to the National Bureau of Statistics, Nigeria’s gross domestic product grew by 3.46 per cent by the third quarter of 2024, with the construction sector experiencing a modest growth of 2.91 per cent, indicating ongoing infrastructure projects and a strong demand for housing.
The real estate services sector, on the other hand, experienced minimal growth of 0.68 per cent, indicating subdued activity amidst economic uncertainties.
Despite this, challenges in the sector persist, including rising competition and market saturation, inflation, and escalating operational costs. Increased electricity tariffs, diesel prices, and property maintenance expenses are eating into profitability.
“To navigate these headwinds, operators are encouraged to adopt energy-efficient solutions such as solar power and inverter systems and leverage bulk service contracts to reduce recurring costs,” the report said.
Data from Lagos Airport revealed that around 550,000 inbound passengers arrived between November 19 and December 26, 2024, with 90 per cent travelling for leisure and tourism.
The short-let market disclosed that Ikoyi emerged as the leading luxury destination, generating N37.5 bn in 2024 and projected to reach N42 bn in 2025.
This is because Ikoyi, famed for its luxury real estate, modern infrastructure, and exclusive gated communities, stands as a haven for business moguls, expatriates, and top officials.
Victoria Island followed closely, contributing N19.3bn and forecasting N21.6bn in 2025, while Banana Island recorded N11bn in revenue, with a 2025 projection of N12.4bn.
Lekki Phase I and Lekki Peninsula II proved to be the largest contributors, with revenues of N94 bn and N70 bn, respectively. Emerging submarkets like Ikeja, Surulere, Yaba, and Gbagada also performed well, reflecting growing demand across Lagos.
“Surulere and Yaba, with their high growth potential, present significant opportunities for investors targeting the affordable segment,” Olatunde said.
“Meanwhile, established luxury markets like Ikoyi, Banana Island, and Lekki Phase I will remain stable and attractive for premium investments,” he added.
The rising popularity of short lets is reshaping real estate investment strategies, urban development, and housing dynamics across the country. As property owners increasingly seek to capitalise on the higher returns offered by short-term rentals, the demand for flexible, well-located, and fully furnished accommodations is on the rise.
While Airbnb has become a dominant platform in the short-let market, it is important to understand that short lets and Airbnb are not synonymous. A short let refers to any rental of a furnished property for a short duration, whether it’s listed on Airbnb, other platforms, or rented directly through agents. Airbnb is simply one of the most popular channels for these types of rentals, but not all short lets are found on the platform.
The growth of short lets is influencing investment decisions, as developers and investors adapt to a market where flexibility, convenience, and higher yields are becoming the norm.
The Lagos Airbnb Market Statistics & Data, Nigeria, reported, “A typical short-term rental listing in Lagos is booked for 161 nights a year, with a median occupancy rate of 44 per cent and an average daily rate of $66. In 2023, a typical host income (annual revenue) was $10,000. As of 12th September, 2024, there are 1,400 active Airbnb listings.”
The growing demand for short-let apartments in cities like Lagos, Abuja, Port Harcourt, and Ibadan is primarily driven by their ability to cater for the needs of a diverse clientele. This includes diaspora visitors and young, upwardly mobile professionals seeking flexible, short-term accommodation.
The popularity of short-let apartments surged during the COVID-19 pandemic when many businesses, including hotels, shut down. These properties quickly emerged as a preferred alternative to traditional hotels, offering business travellers and other visitors well-furnished living spaces, fully equipped kitchens, and other amenities that provided a home-like experience.
Years after the pandemic, short-let apartments have continued to thrive as a viable option for accommodation, with occupancy rates forecasted to exceed 50 per cent in 2025.
These apartments are available for various durations, from a few days to a month, and range from studio apartments to multi-bedroom units, including duplexes and bungalows, in key urban areas across the country.
According to data from the BuyLet Live 2024 Nigeria Property Price Index Report, short-let apartment prices in Lagos rose by over 200 per cent in 2024, following a modest 12.95 per cent increase in 2023 and a notable 46.4 per cent rise in 2024.
“Short-let apartments recorded the most notable growth, with prices surging from 12.95 per cent in 2023 to 46.40 per cent in 2024, reflecting an increase of over 200 per cent,” the report read in part.
The report attributes the price hikes across various property types to inflation and rising development costs, which have compelled developers to increase prices in order to maintain profitability.
While the average price increase for short-let apartments in Lagos in 2024 stood at 46.4 per cent, the growth varied across different areas.
According to the report’s graph, Ikoyi saw the highest increase at 60 per cent, followed by Lekki Phase 1 at slightly lower rates. Surulere experienced around 30 per cent, while Ikeja saw a 42 per cent rise.
Magodo saw an increase of over 50 per cent but not quite reaching 60 per cent. Areas like Ajah and Yaba followed closely behind, while Victoria Island experienced a slight uptick, though still below 60 per cent. Prices in Ikate and Gbagada were a bit more modest, with increases just above 50 per cent and just under 40 per cent, respectively.
An estate surveyor, Olorunyomi Alatise, 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, the massive shift toward short lets has unintended consequences. Because more housing units (especially those in eyebrow areas) are withdrawn from the long-term rental pool and converted into short-term stays, hence, availability of affordable housing stock decreases. Short lets are a good investment medium, but its growth needs to be checked to prevent further stress on the existing housing affordability challenge.”
In a similar vein, the Chief Executive Officer, Dr Kolade Adepoju, said a strong real estate market thrives on investor activity, as good returns attract more capital, boosting the economy and benefiting society at large.
He said, “A good real estate market should be driven by investors, not just those buying to live. So, it’s actually a positive thing, in my opinion. I pray it works well and investors get their return on investment. If the return on investment is good, it will encourage them to bring in more investment into the economy, which will positively affect the economy and the people and institutions.”
