Prices of building materials rise 300%, making housing worse – Property – The Guardian Nigeria News – Nigeria and World News

These are not the best times for potential homeowners and developers, as a sharp increase in the prices of building materials across the country could further exacerbate the existing housing deficit in low / middle income segments of the real estate market.

Access to affordable housing is quickly becoming an unrealized dream for the majority, with the gaps growing from bad to worse as government efforts have failed to deliver the much desired result.

In addition, problems such as low inflow of funds into the industry, slowness of administrative procedures, high cost of registration, shortage of skilled labor, bad policies and the like have gone unresolved. over the years. The country’s inflationary trends and economic disruption fostered by the COVID-19 pandemic have not helped the sector.

The cost of raw materials such as reinforcement, cement, finish, paint and other components has increased by more than 300 percent in recent times. With higher prices for projects, which include rising materials and labor costs, the construction industry struggles as activities are postponed, reviewed or projects are canceled. For each construction project, more than 30 cents of the total cost goes towards the purchase of materials; this value depends on the taste and design of the projects. A one-bedroom apartment that can be developed with 2.5 million Naira on top of the cost of the land last year now costs over 4 million Naira.

The few developers, who can continue with housing development, pass increases in material costs on to customers who pay higher prices for housing.

The price of cement had reached a record level of 5,000 N per 50 kg bag before stabilizing. Currently, in some places in the southwest, the price varies between N3,800 and N4,000 per bag. In the South-East, the same bag goes for N3,200 while in the North a 50kg bag starts at N3,900, depending on the location.

An increase in the price of reinforcement has also thrilled private developers, leading to weak sponsorship and confusion among contractors, whose previously scheduled material quotes are now in dissonance with current market realities.

Guardian’s market research last weekend showed that prices had also increased in the past two months, inflicting more pain on developers, who are already hit by the drop in revenue. The price of 12 and 16 mm iron rods has increased from N 260,000 in April to N 415,000, while 10, 25 and 20 mm, which were sold for N 355,000, are currently selling for N 425,000. N. The 8mm goes from N355 to N420,000 per ton.

A dealer, Mr. Kayode Ilesanmi, who spoke to The Guardian, explained that the price of cement has continued to fluctuate lately from factories, with major manufacturers attributing the development to the cost of production, to poor power supply and tough economic policies.

He noted that it was only in the past two weeks that the price has become stable.

For his part, a seller of iron bars, Mr. Ola, explained that the increase in the price of iron bars was due to the fact that the producers tried to raise the standard, besides the fact that there is inflation everywhere, which also affected the building materials market.

He said: “Inflation spreads across all levels, including the food we eat. This will affect the production of houses in the long run. We are experiencing low sales because the source of income for people has not increased. The iron level is now improved. Earlier this year there were a lot of substandard products on the market. The products on the market are now “ordinary local”, but they are of standard quality, although expensive. “

Former Nigerian Institute of Building (NIOB) President Kunle Awobodu said that an increase in the price of materials negatively affects projects because before embarking on a project there must be a budget, adding only increases that do not These were not unforeseen will affect the budget, slow down the project and result in the fact that the allocated money will not be enough.

He said that if the projects are not completed on time and to the satisfaction due to fluctuating material prices, there will be low production and the number of buildings will not be reached.

“Except in projects where there are a lot of reserves, the housing shortage will continue. “

Awobodu revealed that the institute is working on alternative building materials that could be deployed, especially pipes, cement, wall materials and others, to cushion the effect of the price increase.

According to him, if the companies producing part of the imported building materials could establish their factories in Nigeria, the cost of transport, which contributes to a rise in prices, would be eliminated.

He said: “Our major problem is that we are importing heavily from abroad and this has a negative impact on the economy. Some local producers import their spare parts and billets for steel production. This can be overcome if we source our iron ore internally and that is why we pray that Ajaokuta steel becomes efficient.

The managing partner of REFin homes, a real estate development company, Mr. Kazeem Owolabi said the development had imposed a negative impact of about 80 percent on housing projects.

According to him, the cost of reinforcement, a material used for the structural phase of housing development, has exceeded the affordability range.

Owolabi said: “The price of an iron bar is high right now; the granite, the toilet system, the pipes and the cement, has really gone up and the cost of transportation is also going up. There is a need for collaboration between developers and operators of building materials. There should be coordination between building material associations which are supposed to bring together all stakeholders to deliberate on building material incentives. This is the sort of thing that we currently expect in the industry. Also, there are too many fake and substandard building materials on the market. You keep buying finishes, most of them are not quality materials ”

“There is going to be a huge impact on the current deficit. Sometimes you look around and see a lot of empty buildings in some areas, but the problem is, they’re not what people want due to lack of financial capacity. If you build and people can’t own the building, no one will occupy it, yet there would be a shortage because there is a lag. If you don’t produce houses due to a shortage of materials, it will have a big impact on housing inventories. “