Investors in Nigeria’s housing sector have expressed concerns that inflation, rising cement prices, and the cost of dollar-denominated building materials significantly impact housing costs and their business operations.
Industry players highlighted that the volatility of the foreign exchange market and the increasing cost of cement are contributing to longer delivery timelines, forcing them to secure additional funding to complete ongoing projects.
During the handover ceremony of the newly built Cello Luxury Apartment 1 in Lekki, the Managing Director of Leadroitt Realty Limited, Mrs. Gbemisola Ojerinde, shed light on the challenges investors face in the current market. She revealed that to mitigate the effects of inflation, her company had resorted to advance purchasing of materials.
“We face the challenge of inflation; It is so bad. For example, the price of cement at the time we started this project was N3000, and today it’s N8300. The prices of many other items, especially those denominated in dollars, have skyrocketed, and this remains a major challenge. You’ll see that housing costs continue to rise,” Ojerinde said.
She added that to minimize the pressure, her firm secured materials in advance through forward contracts, including lifts, generators, and other essential items. Despite being impacted by inflation, the company was able to cushion the pressure on their operations.
Similarly, Senior Investment Adviser at Leadroitt Realty Limited, Damilola Adeniran, noted that the skyrocketing prices of building materials have caused substantial increases in the cost of completing projects within their set timelines.
“The cost of building an apartment in Nigeria has risen significantly compared to three to five years ago. The instability in FX and the price hikes of materials that are dollar-denominated are affecting the industry,” Adeniran said.
Despite these challenges, Ojerinde emphasized the importance of adhering to regulatory standards and utilizing quality materials, underscoring the industry’s responsibility to maintain high construction standards regardless of the prevailing economic challenges.
