According to a report by BuyLetLive, over 30 per cent of housing projects initiated in 2023 are either delayed or abandoned.
It stated, “Developers are struggling to maintain project timelines due to budget overruns caused by fluctuating material prices. Reports suggest that over 30 per cent of housing projects initiated in 2023 are either delayed or abandoned.
“The impact of rising building material costs is evident across several dimensions of Nigeria’s housing market. The rising cost of materials has pushed up property prices, placing homeownership out of reach for many Nigerians. A three-bedroom bungalow that cost approximately N10m to construct in 2020 now requires about N15-N18m in 2024, a 50-80 per cent increase.
“Nigeria’s housing affordability index continues to deteriorate. With the average annual household income at N2m, many Nigerians cannot afford rising rents or purchase costs. Low-income families, in particular, are disproportionately affected. Buyers and renters are going for smaller units or shared housing arrangements to reduce costs. This trend is evident in Lagos, where unit demand for one-bedroom apartments and studios has surged by 20 per cent in the last year.”
According to the report, the housing market in Nigeria is grappling with the surging cost of building materials, a trend that has far-reaching consequences for affordability, project timelines, and overall market dynamics.
“With Nigeria already facing a housing deficit estimated at over 20 million units, according to the Federal Mortgage Bank of Nigeria, the rising material costs are worsening an already dire situation. The depreciation of the naira against major foreign currencies has increased the cost of imported building materials such as steel, aluminium, and tiles. Between 2020 and 2024, the naira experienced a devaluation of over 50 per cent against the US dollar. This has made it significantly more expensive for developers to procure essential materials, particularly those not produced locally.
“The COVID-19 pandemic, followed by geopolitical conflicts like the Russia-Ukraine war, has disrupted global supply chains. Materials such as cement and iron rods, which are heavily reliant on international trade, have seen price hikes. The price of a tonne of steel rose globally by nearly 30 per cent in 2023 alone.
“Nigeria’s rising inflation rate is a major driver of the increasing cost of building materials. The removal of subsidies on petroleum products in 2023 has also caused a surge in fuel prices, significantly raising transportation costs for delivering materials to construction sites.”
According to the report, the rising cost of building materials was a critical challenge for Nigeria’s housing market.
“The rising cost of building materials is a critical challenge for Nigeria’s housing market, exacerbating affordability issues and delaying much-needed projects. However, with strategic interventions such as boosting local production, adopting alternative materials, and leveraging technology, the sector can mitigate these impacts. Collaborative efforts from government agencies, developers, and financial institutions are essential to ensure that housing remains accessible for Nigeria’s growing population.
“As Nigeria’s urban population continues to grow, the need for affordable and sustainable housing solutions cannot be overstated. Addressing the rising costs of building materials is a crucial step in closing the housing deficit and fostering economic growth,” the report concluded.
