A report by BuyLetLive reveals that over 30% of housing projects initiated in 2023 are either delayed or abandoned.
Developers face challenges in maintaining project timelines due to budget overruns caused by fluctuating material prices nationwide.
Impact of Rising Building Material Costs
The increasing cost of materials has driven property prices higher, making homeownership unaffordable for many Nigerians.
A three-bedroom bungalow that cost N10m in 2020 now requires N15m–N18m to construct in 2024, a 50-80% increase.
With an average annual household income of N2m, many Nigerians struggle with rising rents and home purchase costs.
In Lagos, demand for smaller units like one-bedroom apartments and studios surged by 20% in the past year.
Housing Deficit and Exchange Rate Volatility
Nigeria’s housing deficit exceeds 20 million units, worsening due to rising material costs and economic instability.
The naira’s devaluation by over 50% since 2020 has increased prices of imported materials like steel and aluminium.
Developers face rising expenses for non-locally produced materials, significantly impacting overall housing project costs.
Inflation, Global Supply Chains, and Fuel Price Hikes
Inflation and subsidy removal on petroleum products have escalated transportation costs for building material deliveries.
Global factors like the COVID-19 pandemic and the Russia-Ukraine war disrupted supply chains, raising material costs.
The price of a tonne of steel alone rose globally by nearly 30% in 2023, affecting Nigeria’s construction sector.
Strategies for Mitigating Housing Cost Challenges
Boosting local material production, adopting alternative materials, and leveraging technology can help reduce costs.
Collaboration between government agencies, developers, and financial institutions is necessary for affordable housing.
As Nigeria’s urban population grows, addressing rising building costs is vital to closing the housing deficit.
