There is a new report that says Lagos is one of the least affordable cities in the world for renters.
According to The Guardian, the report was released by RENTCafé, a property search website puts Lagos rent at $355 (N129, 575) per month while the household income is $625 (N228, 125), making the city the third behind Manhattan, New york city with 59 per cent and Mexico City with 60 percent. It also identified the three least cities as vibrant urban hubs with thriving or emerging economies but unaffordable for renters.
Price Water Corporation (Pwc) Opportunity report also lists Lagos at 28 position of 30 cities, having compiled a list of the best cities in the world to live and work in. The ranking is the result of an in-depth analysis of the most prosperous global business, finance and culture capitals, which considers different factors from infrastructure, to intellectual capital, sustainability and ease of doing business.
The researchers also considered the amount people earn in these cities and whether these salaries are enough to afford a decent rental apartment. They also looked at the current rents in the top global financial centres, but not restricted to cities with outstanding activity in the financial sector, and bringing into the equation the affordability of local housing prices too.
What this report shows is that renters in Mexico City, Manhattan and Lagos face hard time concerning rent affordability, that is, the rent takes up more than half of a household’s income each month (60 per cent, 59per cent and 57per cent respectively). This implies that Lagos residents spend 57 percent of their income on rent. Mexico City is the world’s most unaffordable city for renters with a 60per cent rent burden. The 40per cent rent-to-income ratio places London among the moderately rent-burdened global powerhouses of the world. Kuala Lumpur, according to the report, is the most affordable city. Rent barely takes 20per cent of the median household income in Malaysia’s capital city.
According to the Communications Specialist for RENTCafé, Amalia Otet, researchers used the list of the world’s top cities of opportunity as published in the latest issue of their Cities of Opportunity report and study the overall average rents or their US Dollar-equivalents adjusted for inflation as necessary.
In the report, London slide back 21 places when ranked by rental affordability, with the seven out of the top 10 most affordable cities of opportunity catapulted straight from the lower third of the initial ranking.
“London is famously expensive. And so is LA. But is this just an outside perception or the sad reality? Our research team here at RENTCafé looked at rental prices in the world’s 30 best cities to live in and compared them with the local median incomes to see just hom (un)affordable these fine urban hotspots are”, Otet noted.
According to the study, Kuala Lumpur, Moscow and Johannesburg ranked as the most affordable cities of opportunity from the 20th, 22nd and 24th places of the original ranking, respectively. Also two South American markets on the 4th and 5th places, Bogotá and Rio de Janeiro moved the farthest from their original positions—22 places up from 26th and 27th.
Regarding the ranking, Lookman Oshodi, an urban development expert, said the ranking is not unexpected considering increase in inflation that the country has witnessed in the past few years. He noted that in the past two years, however, most property owners have maintained rent freeze.
Despite the freeze on the real rent cost, Oshodi said that property owners and renters alike, have been dealing with costs ranging from security, energy, water and road among other housing related services.
“The energy crisis has further pushed housing related cost to astronomical level as residents need to fuel and repair their power systems,” he added.