One of the chief complaints among young people across the globe today is the increasingly high cost of housing. In much of the developed world, decades of underinvestment in new housing, coupled with restrictive zoning regulations and other barriers to development, have contributed to persistent housing shortages. The resulting imbalance between supply and demand has driven rents and property prices to levels that are increasingly unattainable for many young professionals.
I have experienced this firsthand. Over the past few weeks and months, I have been searching for a flat to rent, and the process has left me baffled by the extremely high cost of housing in many parts of Nigeria. Yet this is by no means a phenomenon restricted to Nigeria. Across both developed and developing countries, younger generations are confronting a housing market that increasingly appears to be working against them.
In the United States, what was once considered a quintessential component of the “American Dream” owning a home, has become increasingly unattainable for many young Americans. The National Association of Realtors recently reported that the median age of first-time homebuyers had reached an all-time high of 40. Similar trends are emerging elsewhere, with the age at which people purchase their first homes increasing in a number of countries.
For much of the developed world. Homeownership has long been an aspiration for younger people. However, due to worsening economic conditions, the expectation that a person will eventually purchase a home is becoming increasingly difficult to sustain as incomes fail to keep pace with the cost of living and economic opportunities remain limited.
In the developing world, access to formal housing, not just home ownership is something that has been largely unattainable to large swaths of the population. High levels of income inequality typically result in only a small group of elites having the ability to afford formal housing. This problem is particularly acute in cities, where employment opportunities are concentrated but housing is often most expensive. High levels of income inequality mean that formal housing is frequently accessible primarily to those with relatively high incomes, such as senior professionals, executives working for major corporations, employees in lucrative sectors such as oil and gas and mining, or high-ranking government officials. For everyone else, the choices can be considerably more difficult.
This is a major problem because the cost and availability of housing determines not just where people are able to live, but where they can work and even which opportunities they are able to pursue. When rents in areas close to employment centres become prohibitively expensive, workers may be forced to live farther away, endure lengthy commutes or, in some cases, turn down employment opportunities entirely.
Housing is not merely a matter of personal comfort or homeownership. It is closely connected to economic opportunity. My own experience searching for accommodation in Nigeria has made this particularly apparent: as i am not simply looking for a place to live, but whether I can afford to live within reasonable proximity to the opportunities available to me.
The Mathematics of Nigeria’s Housing Crisis
When we look at the incomes of the average Nigerian worker, it is difficult to arrive at any other conclusion than that Nigeria’s housing market is fundamentally disconnected from the economic reality of the majority of its population.
Let us begin with the salaries of workers in the formal sector. According to The Guardian, public-sector entry-level positions typically pay between ₦70,000 and ₦120,000 per month, while mid-level professionals in industries such as banking and telecommunications earn roughly ₦250,000 to ₦600,000. Senior management and executive positions can earn ₦1 million or more per month.
Even these figures, however, provide a somewhat misleading picture of the Nigerian labour market because they primarily reflect those working in the formal economy. The overwhelming majority of Nigerians do not work in such positions.
According to data from Nigeria’s National Bureau of Statistics (NBS) and the International Labour Organization (ILO), approximately 93 percent of Nigeria’s workforce operates in the informal sector, compared with just 7 percent in formal employment. This means that the salaries of the relatively well-paid professionals we often use when discussing income in Nigeria represent only a small fraction of the population.
Obtaining accurate figures for informal-sector earnings is considerably more difficult, given the nature of the work and the absence of regular, standardised salaries. However, estimates from organisations such as Moniepoint and Moody’s Ratings suggest that many informal workers earn relatively modest incomes, with individual take-home earnings often falling within the range of ₦30,000 to ₦100,000 per month.
Against this income reality, the cost of housing becomes difficult to comprehend. A commonly used benchmark for housing affordability is that households should spend no more than 30 percent of their income on housing costs. When a household spends more than this threshold, it is generally considered to be “rent-burdened.” Yet in my own search for accommodation, I have repeatedly encountered one-bedroom flats costing more than ₦1 million per year. According to the Nigeria Property Centre, rents for standard flats can range from roughly ₦1.2 million to ₦7 million per year, depending heavily on the city, neighbourhood and size of the property.
Consider what this means for someone earning ₦100,000 per month. Their annual income is ₦1.2 million. A ₦1 million annual rent would therefore consume approximately 83 percent of their entire yearly income; before they have paid for food, transportation, electricity, water, healthcare, clothing or anything else.
To compound the issues are that in reality, the advertised rent is often only the beginning of the financial commitment required to make a property in Nigeria habitable. Unlike many housing markets where rent is paid monthly, Nigerian tenants are often expected to pay a full year’s rent upfront, particularly in major urban centres. This creates an enormous financial barrier for low- and middle-income workers. Someone earning ₦100,000 per month may technically be able to earn enough over an entire year to cover a ₦1 million rent, but that does not mean they can immeadiatey produce ₦1 million in cash at will.
There are also substantial costs beyond the rent itself. Many rental properties are offered with only the most basic amenities, meaning tenants often have to purchase furniture, appliances, cooking equipment and other necessities themselves. In some cases, even basic infrastructure such as reliable electricity, water supply, functioning toilets or adequate electrical wiring cannot be taken for granted.
In a country where the overwhelming majority of workers operate in the informal sector and where many earn less than ₦100,000 per month, the formal rental market in major urban areas is priced as though a large proportion of the population earns several times that amount.
So where do these people live? For many, the answer is with family. Multigenerational households remain an important means through which Nigerians cope with the cost of housing. Others live in increasingly overcrowded accommodation, informal settlements or poorly serviced communities on the outskirts of major cities, where rents may be lower but access to reliable electricity, water, sanitation, roads and other basic infrastructure is often limited.
The result is that Nigeria effectively has two housing realities. There is a formal housing market that is increasingly unaffordable to a large proportion of the population, and an informal housing system that absorbs those who cannot afford the formal market but often does so at the expense of living conditions, infrastructure and quality of life.
The Search for Alternative Paths to Wealth
The consequences of an increasingly unaffordable housing market extend beyond the immediate problem of where people live. For younger generations, it can also contribute to a broader sense of economic pessimism. If owning a home, traditionally one of the most important ways for ordinary people to accumulate wealth, is increasingly out of reach, it is natural that some people will begin looking elsewhere for opportunities to improve their financial position.
This may help explain the growing popularity of alternative and often more speculative forms of investment among younger people. Money that might once have been saved toward a house or other long-term assets is increasingly being directed toward cryptocurrencies, foreign exchange trading, prediction markets, sports betting and retail investing. These are very different activities, of course, and they should not all be treated as equivalent. But what they offer individuals is the possibility of generating financial returns without requiring them to first accumulate the enormous amount of capital increasingly needed to enter the housing market.
The growth of sports betting is perhaps the most visible example. The global sports betting market was valued at more than $111 billion in 2025 and is projected to more than double by the early 2030s. In Nigeria, sports betting has become particularly prominent among millions of young people. In my own experience, it is difficult to find many men around my age (early to mid-20s) who do not engage in sports betting in some form.
Prediction markets provide another example. Once a relatively niche financial product, prediction markets have experienced an extraordinary increase in trading activity in recent years. They are increasingly discussed not only in financial circles but also in relation to sports, politics, elections, economic policy and other major events.
Cryptocurrency has followed a similar trajectory. What was initially promoted by many of its advocates as an alternative to conventional fiat currencies and the traditional financial system has, in practice, developed into a major speculative asset class. For many younger investors, the attraction is not necessarily the monetary or technological philosophy behind cryptocurrency but the possibility of achieving substantial returns from relatively small investments. The enormous price fluctuations associated with many cryptocurrencies, however, also mean that the same mechanism that can produce extraordinary gains can produce extraordinary losses.
Then there is retail investing: the participation of individuals in financial markets through the purchase and sale of assets such as stocks, bonds and exchange-traded funds (ETFs) for their own accounts. Platforms such as Robinhood in the United States and CowryWise and Bamboo in Nigeria have made investing considerably more accessible to ordinary people.
The scale of this shift is significant. The World Economic Forum estimates that retail investors currently hold approximately 52 percent of global assets, a figure it projects could rise to more than 61 percent, representing approximately $107 trillion.
I am not immune to this trend myself. I have developed an increasing interest in retail investing, putting aside relatively small amounts of money each month into stocks and mutual funds. Among my friends and colleagues, I have observed similar behaviour, although the particular investment varies considerably. Some participate in sports betting; others trade forex or cryptocurrencies; others invest in stocks or mutual funds.
There is nothing inherently wrong with investing. Long-term investment in productive assets can be an important mechanism for building wealth, and the increasing accessibility of financial markets is a positive development. The problem however, arises when this speculative activity begins to act as the substitute for more conventional forms of wealth accumulation, when people feel that those conventional avenues are no longer available to them.
In reality, most individuals also lack the technical expertise required to consistently outperform financial markets or accurately assess the risks associated with complex financial products. This is particularly important in areas such as retail investing, leveraged forex trading, prediction markets and speculative cryptocurrencies, where substantial losses can occur just as quickly as gains.
The danger is amplified when economic insecurity encourages people to take increasingly large risks. When the conventional path to financial security appears closed, the promise of getting rich quickly can become considerably more attractive.
These speculative investments can have real world impacts. No example is more potent than that of South Korea where retial investors known as “ant” investors (개미투자자), who account for a massive 60% to 70% of the market’s daily trading volume. Following a loosening of restriction by the Korean governemnt retail traders piled a staggering 78 trillion won (~$54.2 billion) into KOSPI shares, using record-high levels of borrowed money to fund their trades, with most of this capital being heavily concentrated in the market’s two AI semiconductor giants: Samsung Electronics and SK Hynix. When the tech sector corrected in July, these leveraged products multiplied the losses, with automated, forced liquidations wiped out trillions of won in individual positions, accelerating the market’s rapid plunge
The takeaway from all of this is not that young people should avoid investing. It is more that the economic environment in which people make financial decisions matters. When younger generations believe that traditional routes to economic security are becoming increasingly inaccessible, they will inevitably search for alternatives.
Sometimes those alternatives will be productive. People may start businesses, acquire new skills or invest patiently for the long term. But sometimes the alternatives can be considerably more precarious. Speculation and gambling can all provide the psychological appeal of immediate gratification in an environment where long-term economic progress feels increasingly distant or just flat out impossible.
And the consequences can extend beyond individual finances. A generation that feels permanently locked out of economic opportunity can become resentful, making some more susceptible to criminal networks, political extremism, violent movements or other destructive behaviours.
When talking about housing affordability we are ultimately talking about whether younger people can look toward the future and believe that there is a realistic path toward building a stable and prosperous life. If that path becomes increasingly difficult to see, people will inevitably begin searching for another one.
The Cost of Starting a Family
Another broader societal consequence of this economic pessimism can be seen in declining birth rates. Across much of the world, people are increasingly delaying marriage and having children until later on in life, while some are choosing not to have children at all. Behind these demographic changes are undoubtedly many different cultural and personal factors, but economic insecurity is a major part of the discussion.
I am reminded of a recent conversation with my family in which the prospect of me getting married was raised. I could not help but find the thought somewhat baffling. As I am still trying to establish myself financially and dealing with the considerable cost of simply supporting myself. The prospect of supporting a wife, and potentially children as well, consequently feels like something very far off in the future.
It is not that I am opposed to marriage or having children either. But there is a considerable difference between wanting a family and believing that one can realistically afford to establish and support one. For me, as for many other young people, the latter question increasingly determines the former.
This is particularly significant in societies where men are still generally expected to assume a substantial share of household expenses. The financial commitments associated with marriage therefore extend beyond the cost of securing a home. There are wedding expenses, rent or a mortgage, utilities, food, healthcare, transportation, education and the many other costs associated with raising a family. If supporting oneself is already financially difficult, adding several more people to that equation can seem almost impossible.
Increasingly, people across the world appear to be reaching similar conclusions. When young adults struggle to afford to live independently, the prospect of supporting an entire family is naturally increasingly daunting. The result is that marriage and parenthood are being pushed further into adulthood.
The trend is particularly evident across developed economies. In countries belonging to the Organisation for Economic Co-operation and Development (OECD), the average age at which women have their first child has risen substantially over the past several decades. In 2000, it was approximately 26.4 years; today, it is close to 30. First-time fathers are also increasingly older, with the average age across developed countries generally between the early 30s and mid-30s.
We are seeing a broader postponement of the milestones traditionally associated with adulthood: leaving the family home, securing stable employment, purchasing a home, getting married and having children. The sequence has effectively become stretched out. For previous generations, these milestones could often occur relatively close together. A person might leave school, obtain a stable job, marry, purchase or build a home and start a family within a relatively short period. For many young people today, each of these steps can take years longer to achieve or may not realisitcally even be achievable at all.
Housing is particularly important in this regard. It is difficult to imagine starting a family when securing a place to live is itself a major financial struggle. A young couple may be able to postpone buying a home and rent instead, but if even renting a modest property consumes a large proportion of their combined income, having children introduces an entirely new set of financial pressures.
This does not mean that housing costs are solely responsible for declining birth rates. Culture, changing attitudes toward marriage, women’s increased participation in higher education and the workforce, access to contraception, urbanisation and many other factors all play important roles. But economic security is certainly an essential part of the equation.
An Unsustainable Economic Reality
What is clear is that the current economic reality facing younger generations is not sustainable. And at the centre of many of these pressures is simple: housing.
Shelter is a fundamental human need. In urban societies, a home is the physical space in which people spend much of their lives, raise their children, rest after work and build their families. Yet housing is treated not as a basic necessity, but as a financial asset whose value is determined by its ability to generate returns for those who own it.
There is nothing inherently wrong with investing in property. The problem arises when the investment value of housing becomes so dominant that its fundamental social function is forgotten. When housing is treated primarily as an asset rather than as somewhere for people to live, rising property values become a desirable outcome for owners, making it increasingly difficult for everyone else to afford a home.
The reality in much of the world now is that in cities where land and housing are scarce, those with greater wealth acquire more property, while those with less wealth are pushed further toward the periphery or into overcrowded and poorly serviced communities. The result is a system in which the basic necessity of shelter becomes increasingly dependent on one’s position in the economic hierarchy.
We therefore need to rethink how we build and regulate our cities. Restrictive zoning regulations that unnecessarily prevent the construction of denser housing should be done away with. Where demand for housing is high, artificially limiting the amount of housing that can be built will inevitably place upward pressure on prices. Cities need to be able to grow vertically and accommodate more people within areas that are already connected to jobs, infrastructure and public services.
This is particularly important in Africa, where one of the recurring patterns of urban development has been outward expansion rather than the creation of sufficiently dense, well-planned urban environments. Urban sprawl may appear to make housing more affordable by pushing development further away from expensive city centres, but it comes with other costs: longer distances between homes, workplaces and essential services.
For low-income populations, this can be particularly damaging. A cheaper home located far from employment opportunities may not actually be more affordable once transportation costs, commuting time and other associated expenses are taken into account. In cities where public transportation is inadequate, the economic burden of sprawl can become even greater. What we need is to build more affordable and adequately serviced housing in the places where people actually need to live.
Housing policy and economic policy are entertwined. The availability and affordability of homes affects where people can work, how much they can save, whether they can establish independent households, when they can start families and whether they can accumulate wealth. It even influences the kinds of risks people are willing to take in their pursuit of financial security.
When a young person cannot afford a home, cannot find sufficiently affordable rent and cannot see a realistic path toward ownership, the consequences extend far beyond their living arrangements. It can change how they invest, when they marry, whether they have children and how optimistic they feel about their economic future.
A society in which a young person can work full-time and still struggle to secure decent housing is not functioning as it should. A society in which starting a family becomes an economic luxury is not sustainable. And a society in which the majority of its population is permanently priced out of the places where economic opportunities exist will eventually have to confront the consequences.
Housing is not merely another commodity. It is the foundation upon which much of modern economic and social life is built.
