Real estate sector is being impacted negatively by the challenges of insecurity in Nigeria and latest rising building materials cost. Dayo Ayeyemi reports.
The rising cost of building materials and escalating wave of insecurity dotting the landscape are already impacting negatively on the Nigeria’s real estate sector.
According to findings by Nigerian Tribune, many ongoing housing projects are currently being abandoned as a result of challenges of insecurity spreading across some states of the federation and rising cost of building materials.
While professionals comprising developers and mortgage finance operators under the auspices of the Housing Development Advocacy Network (HDAN), have raised the alarm over the spate of insecurity, others in another platforms have expressed worry about increasing rate of abandoned buildings due to high materials’ cost.
According to market survey by Nigerian Tribune, the price of cement, one of the major components in the building construction process, has increased to N3, 800 in Lagos and Ogun States from N3, 300 within one week.
In other locations such as Imo, Abia, Cross Rivers, Rivers, Akwa Ibom and Delta States, among others a bag of 50-kilogramme of cement is currently selling above N4, 000; whereas this same product was sold for N2,600 in second quarter of 2020.
The most shocking thing is that the price of other products such as wood, roofing sheets, nails, tiles, plumbing and other finishing materials are soaring high every week.
Rising insecurity
Worried by the rising level of insecurity in the land, the Lagos State Government has vowed to seal off all abandoned and uncompleted buildings that are not properly managed by its owners as part of measures aimed at stemming the rising cases of criminality and security challenges in the state.
Commissioner for Physical Planning and Urban Development, Dr Idris Salako, who disclosed this at the weekend, said the decision became necessary due to the security situation in the country, as some hoodlums and social miscreants have continued to convert abandoned and construction sites to their safe haven, thereby perpetuating mischief that poses a serious threat to the sanity and sanctity of the state.
Also, HEDAN, led by its Executive Director, Mr Festus Adebayo, noted that the undying spate of insecurity in Nigeria has been hitting real estate sector of the economy hard.
The group warned that the sector might soon be grounded if nothing is urgently done to tackle the menace by the Federal Government.
Adebayo pointed out that foreign investors are currently shunning the real estate sector due to high level of insecurity.
Citing Twitter example, he said “Twitter took its regional headquarters to Ghana, ignoring Nigeria with the largest Twitter community in Africa because of insecurity.
‘’As you are most aware, the United States has warned its nationals against traveling to Nigeria. As an organisation, we are worried that insecurity is adversely affecting the real estate sector, the highest employer of labour and contributor to the GDP in the industrialised countries like Canada and USA.”
Suggesting ways out, Adebayo, who is the lead promoter of the yearly Abuja International Housing Show, called the Federal, state governments and elder statesmen to come together and tackle the serious security challenges facing Nigeria.
“We are urging that in the interest of real estate development, and the economy as a whole should be addressed overtime,” he said.
High cost of materials
Experts in the sector also noted that rising building materials’ cost has really distorted many on-going housing schemes, leading to delay, total abandonment in some cases or postponement of the delivery dates due to lack of funds.
President, Nigeria Institute of Building (NIOB), Mr Kunle Awobodu, warned that with high cost of building materials, especially reinforcement bar and cement, Nigerians would pay more for houses.
If care is not taken to address the situation, he pointed out that homelessness may increase among accommodation seeking Nigerians.
Managing Director, HOB Estates Limited, Chief Olusegun Bamgbade, decried the rising cost of building materials, adding that the situation has made many developers to jack up prices of housing units in their stock. He warned that prices will go up further if something urgent is not done to address the situation.
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