High building materials cost triggers 40% rise in house prices

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 put 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 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.