High inflation affects building materials

High inflation affects building materials
Photo by Haneen Krimly- Ask Nigeria

The doubled rate of the cost of building materials affects house rentals.

As of July, Nigeria’s inflation rate was above 19 percent, causing hard times for estate developers in the housing sector. The country’s housing sector also suffering from the rapid inflation affecting the economy as the cost of building materials continue to skyrocket, thereby having negative impacts on rentals and the cost of affordable housing. In response to these economic challenges which include the cost of acquiring a land, lack of skilled labour, unstable foreign exchange rates, logistics problem and supply bottlenecks that have negatively affected projections, the sector has begun an upward review of prices of units for projects.

Estate developers complained that about 60 percent of the total cost of building construction is spent on materials while the remaining 40 percent is expended for labour. In 2021, the prices of reinforcement, sand, roofing sheets, tiles, cement and granite, which are essential building materials, skyrocketed by over 100 percent. Cement which used to be N2,500 is now sold for N4,300, a tonne of 8mm reinforcement that was sold for N441,000 in April 2021, is now sold for N475,000 and 30 tonnes of granite which was also sold at N140,000 is now N320,000 in the building market.

House rentals in major Nigerian cities has increased by about 80%.

Major Nigerian cities like Lagos, Abuja, Ogun, Ibadan, Port Harcourt, and Kano have been really affected by the rise in building cost so much that landlords and property managers increase rents by about 80 percent in recent times. In Lagos state, the average price for the rental of one-bedroom flats in a standard location is about N900,000 per year, while rentals for three bedrooms begin from N1.9 million to about N4 million yearly. Also, before the recent development, house owners used to charge between N1 million and N1.2 million for a two-bedroom apartment, but as of now, the price has doubled.

In Abuja also, a one-bedroom flat is rented for as high as N1.2 million and up to N1.5 million. A duplex in the exclusive areas of Ogun state also, such as Abeokuta GRA and others, could be rented for N2.5 million per year, while a two-bedroom apartment could be as high as N750,000 per year, as imposed by the landlord. Likewise in highbrow areas of Ibadan where rents for apartments was N1 million, there is now an increase to about N1.5 million.

The government is advised to enable local production of building materials.

The former President of the Nigerian Institute of Building (NIOB), Mr. Kunle Awobodu, asserted that there might be a continuous rise in the cost of building materials depending on the country’s exchange rate and current inflation. He further stated that the housing sector requires the intervention of the government through the production of locally produced materials, so as to avoid a stagnant high cost of construction. The current situation of the housing sector has also been said to be unhealthy for it, in that, developers and other workers in the sector might reduce the quality of materials to cut cost and make increased profits.

Hence, the government is also advised to formulate policies that ensure that the situation does not continue further and create more damage to the real estate sector of the country. Asides its effects on the sector, the NIOB past President said that the high cost of materials create hopelessness for meagre income earners in the country. This is because many Nigerians now prioritize feeding and other basic necessities over commitment of highly expensive resources to build homes.

FG should make loan facilities available to housing developers.

Notwithstanding the high cost of building materials, Nigerians who desire a home of their own are advised to deploy a gradual construction, by buying critical building materials gradually. This can be as a means of escape from the costs of construction, rather than waiting to buy all at once. A former chairman of the Faculty of Housing of the Nigerian Institution of Estate Surveyors and Valuers (NIESV), Mr. Adiatu Adesina, added that building materials, being essential components in housing development, determines the price of a house in the market. In addition, he urged the government to enable the availability of loan facilities to housing developers.


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22 comments
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Ask Nigeria
10 days ago

High inflation affects building materials – The doubled rate of the cost of building materials affects house rentals. – Express your point of view.

SarahDiv
Member
9 days ago

FG is making things difficult for us with their policies which is not inline with the economic interest. Why won’t we have high cost of building materials.

DimOla
Member
9 days ago

It is well. We can’t continue like this in this country. Already we know that we have an incompetent government who is further plundering the country financial crises. We need a new government who will have the interest of the country at heart. High cost of building materials is the reasons why we have more building understand construction collapsing in a bid to manage materials.

Adeolastan
Member
9 days ago

The non availability of loan has really done bad to housing development in Nigeria and because of the unchallant attitude of the government to provide shelter for her citizens.

Ultra0711
Member
9 days ago

Every nook of our economy have been ravaged by inflation leaving the people in hard situation. I can’t even imagine where this will lead us to in this country

Tonerol10
Member
9 days ago

building materials is high, feeding is high, electricity is high, education Is high, transportation is high, everything is high in the fail country called Nigeria.
Failed government , so annoying CHAI

Iyanu12345ogg
Member
9 days ago

Inflation affected us because we import almost everything, and the exchange rates has its effect. Nigeria really needs restructuring.

Hassan Isa
Member
9 days ago

I am suggesting that the current scenario in the housing sector is unhealthy for it, in the sense that builders and other workers in the field might lower the quality of the materials they use in order to minimise costs and maximise their profits.

Nwachukwu Kingsley
Member
9 days ago

This is due to the fact that many Nigerians now place a higher priority on ensuring that they have access to food and other fundamental necessities than they do on devoting extremely costly resources to the construction of dwellings.

Taiwoo
Member
9 days ago

In order to avoid a continued rise in the cost of construction, the housing market necessitates the participation of the government in the form of the manufacturing of materials that are produced locally.

Chibuzor
Member
9 days ago

Regardless of the country’s currency exchange rate and the level of inflation at the time, the cost of building materials is expected to continue their upward trend.

Kazeem1
Member
9 days ago

The increase in the cost of construction has had a significant impact on Lagos, to the point where landlords and property managers have had to raise rents by almost 80 percent in recent times.

Godsewill Ifeanyi
Member
9 days ago

Due to supply difficulties, which have had a negative impact on estimates, the industry has started an upward evaluation of prices of units for projects.

Adesanyaj72
Member
9 days ago

The home market in this country is suffering as a result of the rapid inflation that is hitting the economy as a whole as the cost of building materials continues to climb.

Remi1
Member
9 days ago

The economy as a whole has been impacted by inflation. Other nations are experiencing inflation as well. They simply have a superior government, which has been successful in handling the matter well. Since we import practically everything, the exchange rates also had an impact on how badly the inflation hit us. Local production and nascent industries should be supported by the government.

Haykaylyon26
Member
9 days ago

Inflation are make everything cost so it expected for the rental fees to the high since the building material is expensive. We have to find way to reduce this inflation it is getting too much with everything just cost

jdpumping
Member
9 days ago

Is there anything cheap in Nigeria anymore no, everything used in building houses are expensive so what do we expect high cost of renting houses when government cannot build houses for the masses.

theApr
Member
9 days ago

Inflation has affected every sector of the economy. Inflation is also happening in other countries too. They just have a better government who have been able to manage the situation efficiently. Inflation affected us really bad here because we import almost everything, and the exchange rates has its effect. The government should encourage infant industry and local production.

Bola12
Member
9 days ago

Now I’m starting to doubt the fact that things will get better in this country, the sad part is that the government are not making good efforts to put an end to all this crisis

Tolaniiii
Member
9 days ago

If the government cannot work on restructuring the economy, they should invite experts to give them advice on how to reduce this inflation rate cos if not it will keep increasing.

Christiana
Member
9 days ago

Things keep getting worse in Nigeria every now and then, people that are struggling to feed themselves now have extra worries of how to lay the exorbitant rental fees. This is totally sad

Abusi
Member
9 days ago

Things have gotten so bad in these country. To build house now is a lot of work. Building materials are now Cost. The rate of rent will sporadically go up soon. Nigeria really needs restructuring.