By: Charles Okezie
The Building materials market is very important to the housing sector. These building materials come in different kinds and are for different purposes.
According to research, building materials accounts for about 30%-50% of project cost and controls about 80% of its schedule. Usual building materials seen on construction sites include blocks, tiles, roofing sheets and iron rods.
In Nigeria, private individuals control the building material market, which makes it prone to market forces (supply and demand) and dealings of private players, especially middlemen even though critics of the housing sector have argued that building materials shouldn’t be left to market forces of demand and supply; given that shelter is considered one of the basic needs of life after food and clothing.
In our country, we import most of our conventional building materials aside from cement, all thanks to huge conglomerates like Dangote, BUA, who have contributed to meeting the need for cement in the industry. Since these building materials are imported and they are affected by inflation which in turn leads to their high landing cost.
Industry experts have attributed the rapid inflation in the price of the building materials to numerous factors such as government fiscal policies, scarcity of building raw materials/hoarding of building materials, fluctuation in the cost of fuel and power supply, inadequate infrastructure, interest rates, corruption etc. Though, other factors influence the cost of building materials in Nigeria such as brand, quality of the product and location of purchase (Proximity is everything).
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The high cost of building materials has dire consequences to individuals (Unemployment), property developers(abandoned projects) and the economy at large. These price hike in building materials has created a shortfall in housing supply.
Given the fact that the present administration of President Muhammadu Buhari set up a social housing initiative through the Family Homes Funds Limited both to provide 200,000 affordable houses to individuals and to augment the efforts of private developers to reduce the housing deficit in the country. One will wonder how all these changes will affect the government’s drive towards the successful delivery of this laudable initiative with the current prices for building materials.
These problems have led industry players to challenge researchers to look into providing sustainable alternative building materials to conventional building materials. It’s important to note these researchers have made headway and have produced results such as the infamous polished bamboo for floor finishing as a cheaper alternative to vitrified or ceramics tiles.
Waste is also a problem property developers have and use effective project management techniques and construction equipment to minimize waste of building materials on site.
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This uncertain and unstable building materials market has caused a lot of headaches for property developers making them constantly review their projections and change their sales prices to reflect current realities. This in turn creates some sort of distrust towards property developers. Making off-takers and clients to accuse them of shifting the goal post. This has pushed some developers to build using lower quality building materials.
Industry players have advised property developers to communicate these uncertainties to their clients before embarking on any project, as well as projecting for future price changes to create enough buffer for them to be able to break even and make a profit.
Despite all these strategies by property developers to cushion the effect of the high cost of building materials, there is still a need for the government to introduce a price control policy, incentives should be given to local manufacturers to improve their output to meet local consumption.
Both private developers and the government have to collaborate to achieve a stable building materials market in the country.