Building Material Costs Skyrocket in Nigeria, Threatening Real Estate Sector, Says Expert
KEHINDE AKINPELU, ILORIN
Real estate expert, Olumofe Dele Oluwole, has highlighted the detrimental impact of the high cost of building materials on the real estate sector in Nigeria. With factors such as inflation, currency devaluation, import restrictions, and supply chain disruptions contributing to escalating costs, the industry is facing challenges that are translating into increased rental values and reduced affordability for many Nigerians.
In an interview with leading housing publication, Oluwole emphasized that the volatile inflation rate and weakening naira make it difficult for developers to import materials at reasonable prices.
The global supply chain disruptions brought about by the COVID-19 pandemic have also exacerbated the situation, affecting the availability and cost of building materials in the country. Additionally, government policies like import tariffs and high energy costs further drive up production and transportation expenses for materials used in construction projects.
The repercussions of these high building material costs are far-reaching. Tenants are bearing the brunt of increased rental values as developers pass on the elevated construction costs. This, in turn, makes housing less affordable for many Nigerians, aggravating the housing deficit and impacting economic growth by reducing disposable income and increasing the cost of living.
To address these challenges, Oluwole recommended several mitigating strategies. Adopting sustainable building practices can significantly reduce construction costs, as can exploring alternative building materials and increasing efficiency in construction processes. Governments can also play a crucial role by offering incentives such as tax breaks or subsidies to developers who undertake affordable housing initiatives.
In conclusion, the real estate sector in Nigeria is facing a significant hurdle in the form of high building material costs. To overcome this obstacle, a collective effort involving government support, sustainable building practices, adoption of alternative materials, and increased efficiency in construction processes is necessary. By implementing these recommendations, the industry can mitigate the impact of escalating costs and work towards providing affordable housing solutions for all Nigerians.
