The average cost of building materials in Nigeria increased by 35.75% in the first half of 2022, compared to the same period in 2021.
This was revealed in a report which was compiled by Northcourt Real Estate, titled “Review of the 2022 Half Year Property Market in Nigeria”, obtained by THISDAY.
He said “the rising cost of building materials continues to negatively influence the real estate market” even as “developers adjust in a timely manner to deliver projects.”
The first-half review also said the private sector seemed more likely to provide the types of housing that the majority of Nigerians could afford, adding that the suburban and coworking property markets could become the most popular investment destination. privileged.
He said “demand for the Class ‘A’ office market has been weak as major companies continue to implement key elements of work-from-home policies.”
The report showed that the construction materials with the highest percentage price increase were Ariston Water Heater, Dulux White Emulsion and 6mm coil cable at 55, 52 and 52% respectively.
“But the ones that saw the lowest percentage increase were the 50kg cement, or 14%; nine-inch sand block, 14% and 13A 15% plug,” he added.
The report, which was signed by NorthCourt’s Director of Operations and Director of Property Research, Mr. Ayo Ibaru, also estimated that the average increase in land prices per square meter in certain areas of Lagos State in the first half of 2022 was 64.63. percent.
The selected areas and their percentage increase were estimated at Old Ikoyi – 53%; Lekki Phase One – 79%; Victoria Island – 75%; Sangotedo – 56% and Agungi – 73%. Other areas were Abraham Adesanya – 51%; Magodo – 95% and Ikeja GRA – 35%.
This indicated that the location with the highest percentage price increase was Magodo at 95%, while the location with the lowest percentage increase was Ikeja GRA at 35%.
The report states that “the private sector appears more likely to provide the types of housing that the majority of Nigerians can afford.”
He also emphatically stated “that public sector efforts to address the growing housing deficit and rising housing costs through direct housing construction and other enabling strategies have been ineffective.
“Measured in terms of housing produced, private developers have not increased supply significantly. Low-income groups have limited access to the housing delivery capacity of the organized private sector. This is further limited by the nature and price of the houses produced, as well as their location and mode of access.
The report also states that “recent surveys suggest that residential projects are most in demand for construction contracts, followed by healthcare, then industrial uses for factories, warehouses, etc.”
He noted that “While demand for new office developments has been sluggish at best, the construction contract value chain is becoming increasingly specialized, with companies choosing to focus on residential development, from healthcare and retail. At least until the first quarter of 2023, the infrastructure projects should be commissioned.”
The report noted that housing supply in Nigeria was still lagging behind effective demand as major players continued to tinker with their solutions to redress the balance.
He added that “developers will continue to focus on lean on-premises execution. This is expected to happen in the retail and hospitality submarkets as they accelerate the rollout of their strategies honed during the pandemic. Neighborhood malls are still the way to go, and larger offerings will need to incorporate other uses – hospitality, family and residential entertainment to mitigate Nigeria’s unique economic circumstances.
“Hospitality concerns will emphasize alternative services that have proven successful during the pandemic and improve formal and informal partnerships while bringing technology into more areas of the business. As boutique hospitality returned to profitability first, big brands have closed the gap.