Lagos State Govt Moves To Tighten Regulation On Shortlet Rentals As Annual Revenue Hits N264 Billion

• The shortlet industry is rapidly growing in Nigeria, bringing in billions of naira as the operators service a market of expatriates and tourists
• A survey by Edala Homes shows that the total revenue in 2024 hit N264 billion, and this sum is set to increase significantly in 2025
• Amid all of these growths, stakeholders predict a worsening of the existing housing crisis, even as Lagos state seeks to regulate this emerging sector

Legit.ng journalist Ruth Okwumbu-Imafidon has over a decade of experience in business reporting across digital and mainstream media.

Since 2020, shortlet rentals have gradually increased in popularity, especially in urban areas like Lagos, Port Harcourt, Abuja, and others.

A report shows that more Nigerians are turning to shortlet properties for flexibility in line with their needs.

The ‘Lagos Short-let Market 2024’ report shows that in 2024, the short-let market in Lagos State had a total estimated revenue of N264 billion and is projected to reach N300 billion in 2025.

The report surveyed 5,806 short-let property listings in Lagos state, with about 78% sourced from AirDNA and the remaining 22% from Edala homes.

According to the report, the growth in demand for short-let rentals in Lagos is its strategic positioning as a business and leisure hub.

The rise of remote work and digital nomadism, as well as the influx recorded during domestic and international events, also drives the growth of this emerging sector that services tourists, expatriates, business travellers, and local professionals in need of flexible but luxurious accommodations.

Lekki leads as short-let homes rake in N264 billion

The report shows that Lekki Phase I and Lekki Peninsula II pooled in N94 billion and N70 billion each during the period.

Ikoyi leads for luxury accommodations with N37.5 billion revenue in 2024, and is projected to reach N42 billion in 2025, the PUNCH reports.

Banana Island, with its exclusive and luxurious offerings, also pooled N11 billion in revenue for the period and is expected to cross N12.4 billion in 2025.

Victoria Island, with a balance between luxury and accessibility, recorded N19.3 billion in 2024 and is projected to cross N21.6 billion in 2025.

It also highlights strong performance and continuous growth in other areas like Ikeja, Surulere, and Yaba.

Commenting on the report, Chief Operating Officer, Edala Homes, Samuel Olatunde, stated that the growth would be sustained by demand from all the submarkets and the growing revenue in emerging areas.

There are also seasonal surges, such as the ‘Detty December’, where shortlets see a spike in patronage. The Chief Executive Officer of Edala Homes, Temidayo Oloyede, described this season as one of the highlights of the 2024 report.

He said:

“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.”

Statista projects that by the end of 2025, vacation rentals across Nigeria will generate up to US$595.60 million in revenue with an annual growth rate of 10.35%, and are expected to reach $883.18 million by 2029.

Lagos State set to tighten regulatory oversight on shortlets

The Lagos State government is also looking to tighten regulatory oversight in the emerging short-let industry in 2025.

The report projects that there will be stricter taxation rules and insistence on transparent financial reporting for operators, enforcement of safety standards, and introduction of customer verification protocols for security reasons.

Note that the government is also enforcing regulatory oversight over the long-term rentals by regulating fees and related charges in the sector.

The government has also launched reporting channels for Lagosians to report real estate agents or landlords who try to exploit them.

Housing crisis worsens due to decreased availability

The report also shows that property owners are capitalizing on the lucrative opportunities in the sector, and many are now moving to offer fully-furnished homes for shortlets and ignoring long-term rentals.

An estate surveyor, Olorunyomi Alatise, referred to the short-let growth as a disruptive force with several unintended consequences.

He explained that the daily and weekly rents mean a more stable and significantly higher revenue for the property owners, especially in high-demand areas, compared to yearly rents paid by tenants.

He warned;

“The consequence is that more housing units (especially those in eyebrow areas) are withdrawn from the long-term rental pool and converted into short-term stays, hence, the 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.”

Lagosians applaud the government's housing reforms

In related news, the Lagos state government has implemented several housing reforms, including the launch of reporting channels and the proposal of monthly or quarterly rent payments.

The move attracted lots of commendations from Lagosians who took to social media to thank the government for heeding their cries.

With the latest reforms, residents can report housing agents and landlords who try to extort more fees than are legally permitted.

Source: Legit.ng