Going by the rising cost of building materials, many real estate developers have embarked on upward review of prices of housing units in their stock.
According to findings by the Nigerian Tribune, most of the developers have jacked up their house prices by 40 to 50 per cent in the last one year, citing exorbitant building materials’ prices, high cost of funds and labour; and high cost of securing planning permit and documentations.
Speaking when interviewed by the Nigerian Tribune, the Managing Director of Tobykemsworth Investment Limited, Mr. Adekunle Monehin, the developer of Honeywells Gardens, said that rising building materials’ cost has forced most developers to review their house prices upward in order to stay afloat.
These materials include iron rods, woods, paints, nails, cement, sandcrete blocks, sharp sand, granite, roof and window materials and workmanship among others
In Teachers’ and Broadcasters’ Villas, housing estates pioneered by the company, he disclosed that a mini bungalow, which was selling for N4.5 million two years ago now cost N6.5 million. This represents 30. 78 per cent increase.
He blamed the situation on rising building materials’ cost, saying, “We have a mini bungalow selling for N6.5 million which was initially N4.5 million. While the price went up because of the building materials’ cost.
“When we did the cost few years back, granite was about N140,000 for 30 tons. That same granite now is N320,000 for 30 tons. When we did the calculation, cement was N2,500, but that same cement is N4,500 now.
“A ton of iron rod at that point was N90,000 per ton. It is N385,000 per ton now. The long span roofing sheet – 4.5 inch, which the cost N850.00 per metre is now N2,850 per metre. That is the reason we reviewed,” the real estate developer said.
Monehin is not alone in this as other developers and housing professionals have raised the alarm over the negative implications of astronomical increase in building materials’ prices on accommodation seekers and home builders.
Most of the experts and cement distributors have laid the blame on the doorstep of manufacturers, while the latter have attributed volatile forex, uncontrolled inflation, logistics problems and dubious activities of middlemen and retailers as major causes.
Disturbed by the situation, professionals have warned that, with the current rise in building materials’ prices, it might be difficult for Nigeria to bridge the housing deficit of over 17 million units in the next 20 years.
To address the situation, the experts in the sector comprising of former Presidents of the Nigerian Institute of Building (NIOB). Mr Kunle Awobodu and Chucks Omeife respectively, President of Association of Housing Corporations of Nigeria (AHCN), Dr Victor Onukwugha and former Chairman of NIOB, Lagos chapter, Mr Asimiyu Bashir, have called on the government to create the enabling environment to encourage more research and local production of building materials in the country.
Omeife pointed out that the high cost of housing has also been negatively impacted by astronomical increases in the price of items like reinforcement and cement.
“Every day the news of escalating prices of goods and materials has become a song which the majority of the people have become used to,” he said.
Speaking with the Nigerian Tribune recently, a builder and official of Qualitec Roofing Products, Mr Asimiyu Bashir, pointed out that the price of aluminum roofing sheets has also increased.
Expressing displeasure over sharp increase in building materials prices, Bashir lamented that nothing was being controlled in Nigeria by the government, but to leave the masses on their own.
“It is no longer strange in Nigeria that whatever goes up never comes down,” he said. He explained that anything that affects the construction sector negatively, being the biggest generation of employment in Nigeria, would affect jobs.
Unlike it’s been rumored that more construction works are ongoing, Bashir said that many people have abandoned their sites due to high building materials’ cost.
Also recently, the immediate past President of the Nigerian Institute of Building (NIOB), Mr Kunle Awobodu, had lamented the rising building materials’ prices, saying it has become a big concern in the sector.
According to him, the hike in cement price would affect housing and rental values, pointing out that home builders would find a way to pass the extra cost to the consumers.
He explained that an increase in the price of materials would affect projects negatively as such increases were not anticipated during the budget.
“A nation that relies so much on imported building materials will have this type of instability; and this will affect the Bill of Quantities and contract sums,” he said.
He lamented that timbers for roofing were becoming scarce and expensive.
“When you talk about building materials, timber is part of it. As it is, it’s even more expensive to use steel for roofing. “We need to find solutions to all these,” Awobodu said
Source : Nigerian Tribune