Why Previously Affordable Homes are Now Out of Reach For Many
Despite the biting economic effects of the recession in Nigeria, the cost of building a house has continued to rise. Between October 2016 and April 2017, several building materials have become more expensive than they used to be. In October 2016, it cost N2,500 to buy the ¼ white plywood board whereas, in April 2017, the same plywood was sold for N4,200 per unit.
As expected, this holds grave consequences for developers, the government, Nigerians planning to rent or buy property as well as other stakeholders. Industry experts have bared their minds on this topic as seen below:
“When former President Olusegun Obasanjo assumed office in 1999, a bag of cement was sold at N500 per bag. Despite various policies and interventions, if any, the price of cement has continued to rise. It is the same story all over the country. Since 2015, the price of cement has climbed from N1,400 to between N2,500 and N3,000, depending on the location and quality. A bag of cement costs between N2,550 and N2,600 in Calabar, Cross River State, while it costs N2,800 in Aba, Abia State. In Port Harcourt, it is sold at between N2,700 and N3,000, depending on the quality. One can buy a bag for between N2,700 and N2,800 in Jalingo, Taraba State, while it is sold at between N2,800 and N2,850 in Abuja.”
For more info: http://sunnewsonline.com/building-houses-with-tears/
“Another dangerous trend is that many developers and engineers have resulted in cutting corners to ensure that they remain in business in order to feed their families and make ends meet. The resultant effect is that proposed materials may not meet specified standards due to high cost… If you need 3O bags of cement to mix certain measurement of gravel, you may need to reduce to 15 bags in ensuring that projects are not abandoned.”
For more info: https://guardian.ng/property/developers-firms-in-dilemma-over-rising-building-materials-cost/
“Due to the depreciation of the Naira and high exchange rates, prices of building material have recorded about 150 to 200 percent increase as very high percentage of building materials are imported. A bag of cement has gone up from N1, 500 to N2, 500 and as high N3, 000 in some areas in Lagos, the cost of rod has skyrocketed from N160, 000 per tonne to N320, 000 which signifies about 200 percent increase. A tipper of 5 tonnes washed gravel now goes for about N32, 000 as against the price of N 20, 000 few months ago, a tipper of granite 30 tonnes now sells for N147, 000 compared to the previous price of N80, 000 to N85, 000. This scenario, according to President, Nigerian Institution of Structural Engineers, Oreoluwa Fadayomi, has impacted severely on many projects as many projects are now stalled as clients could no longer continue due to the high cost of all the building materials.”
For more info: https://dailytimes.ng/business/rising-cost-building-materials-dangerous-trend-stakeholders/
Nigeria Real Estate Hub
“Nigerians would continue to pay more for accommodation in major cities until the cost of building materials is subsidised. Many completed housing estates across the country have remained unoccupied because of the high rental and sale prices attached to them as against the meagre income of the average Nigerian worker. More so, it is worse now due to the economic recession. The increase in the prices of building materials has multiplier effects on housing development, many projects are not completed on time due to the cost of materials which have been on the increase. Besides timely completion, high prices of building materials form a crucial constraint to improving housing conditions in Nigeria.”
For more info: http://nigeriarealestatehub.com/implications-cost-building-materials.html/
The implication of this is that housing schemes initiated by the government are not affordable to the average Nigerian. As expected, this impacts negatively on the projection of the government to cut down the visible housing deficit that the country has endured for years.
The government has, over the years, launched initiatives to provide affordable housing to the teeming population and encouraging homeownership through site and services schemes but with the rising cost of building materials, this goal proves elusive.
What can be done to free the country from this real estate trap? Perhaps the government should establish policies that will be aimed at bringing down the cost of building materials.