Lagos has been ranked the fourth most expensive city globally for high-end two-bedroom rentals, with an average annual cost of $19,379, according to a recent Nairametrics report. However, tenants willing to explore beyond prime areas like Ikoyi, Victoria Island, and Banana Island can find significantly cheaper options in six neighbourhoods identified in a January 2026 ranking.
Why Lagos Luxury Rents Keep Climbing
The Nairametrics report attributes the steep prices to limited land availability, strong demand in prime locations, rising construction costs, speculation, and the depreciation of the naira. High-end properties in Ikoyi, Victoria Island, and Banana Island are frequently priced in dollars, with ultra-luxury developments around Bourdillon, Alexandra, and Gerrard roads in Ikoyi commanding rents as high as $130,000 a year.
Beyond the advertised rent, tenants face additional costs including agency fees, legal and agreement fees, caution deposits, stamp duty, utility deposits, internet installation, and service charges. Agency charges can range from one or two months' rent to 10 per cent of the annual rent, while legal and agreement fees range from five to ten per cent. This means the actual amount required to secure a home can be substantially higher than the headline rent.
Construction Costs and Housing Deficit Add Pressure
Rising construction costs are also contributing to the pressure. Cement prices have climbed to about N12,500-N15,000 per bag, up from roughly N5,000-N6,000 at the end of 2023, while reinforcement steel has risen to between N1 million and N1.5 million per tonne. Against this backdrop, Lagos' housing deficit was estimated at 3.4 million units in 2025, increasing pressure on available housing.
The January 2026 Nairametrics ranking, based on the Lagos Residential Market Report 2025 by Edala Development, identified several cheaper locations for two-bedroom rents.
Six Cheaper Neighbourhoods for Two-Bedroom Rents
1. Badagry: From N575,000
Badagry emerged as the cheapest location on the ranking, with an average annual rent of about N575,000 for a two-bedroom apartment. The coastal town offers access to the Badagry corridor and has an economy driven largely by fishing, trading, and tourism. Its distance from central Lagos remains a major consideration for daily commuters.
2. Epe: From N605,000
Epe recorded an average annual two-bedroom rent of about N605,000. Located along the Lekki-Epe corridor, the area has road links to Ijebu-Ode and Ikorodu and benefits from growing residential and commercial activity. Its expanding infrastructure and proximity to emerging developments could make it attractive to renters prioritising space and lower housing costs.
3. Ikorodu: From N815,000
Ikorodu recorded an average annual rent of N815,000 for a two-bedroom apartment, according to the ranking. The area has become increasingly attractive to renters seeking cheaper housing while remaining connected to other parts of Lagos through road and water transport. Current Nigeria Property Centre listings show a broad range of rental options across neighbourhoods including Igbogbo, Agric, Isawo, Gberigbe, and Jumofak. Self-contained apartments currently average around N400,000, while mini-flats average roughly N700,000, though individual properties vary widely.
4. Ojo: From N967,000
Ojo recorded an average annual two-bedroom rent of about N967,000. The area benefits from its location along the Lagos-Badagry Expressway and proximity to major commercial centres such as Alaba International Market. It is also home to Lagos State University, making the area a significant residential and commercial hub.
5. Alimosho: About N1 Million
Alimosho ranks among the more affordable parts of Lagos, with average two-bedroom rent put at about N1 million annually. Its large geographical spread includes areas such as Egbeda, Ayobo, Ipaja, Ikotun, and Igando, giving renters a wide range of neighbourhoods and housing options. The area's large population and growing middle class continue to support demand for residential properties.
6. Mushin: About N1.1 Million
Mushin recorded an average annual two-bedroom rent of about N1.1 million. Its major advantage is location. Unlike some cheaper areas farther from central Lagos, Mushin is relatively close to several major commercial and transport corridors. The neighbourhood is connected through Agege Motor Road and Ikorodu Road and has access to markets, schools, healthcare facilities, and public transport. However, tenants must weigh affordability against challenges including congestion, overcrowding, and infrastructure pressures.
Cheaper Rent Does Not Always Mean Cheaper Living
For Lagos renters, the headline annual rent is only one part of the calculation. A cheaper apartment farther from work could result in significantly higher transport costs and longer commuting times. Tenants should also investigate electricity, water supply, security, road access, service charges, and additional fees before signing a tenancy agreement.
Still, with luxury rents continuing to rise, locations such as Badagry, Epe, Ikorodu, Ojo, Alimosho, and Mushin demonstrate that Lagos' rental market has sharply different price points. For households struggling with the cost of accommodation, moving away from the city's most expensive neighbourhoods could provide a more manageable path to securing a two-bedroom home.
Lagos is also moving to reshape the way millions of residents rent homes, with a proposed tenancy bill before the Lagos State House of Assembly seeking to tackle excessive rent increases, questionable agency charges, fraudulent agents, and long-standing disputes between landlords and tenants. If it becomes law, the bill could significantly change how rental transactions are conducted across the state, with potential implications for landlords and estate agents.
