Rising material, construction costs deepened housing affordability crisis in 2025

As all is set to usher in the new year in less than 48 hours, a reflection on the outgoing year has revealed that the rising building materials and construction costs have deepened housing affordability crisis among accommodation-seeking Nigerians.

From Lagos to Abuja, Port Harcourt, Ibadan, Kaduna and Enugu, rising building material costs have limited access to affordable houses by middle and low-income Nigerians despite the estimated nation’s huge housing deficit of over 22 million units.

High costs of land, labour, finance and documentations are also contributing factors.

As of December 28, prices of cement ranged between N10,300 and N10,800, depending on brand.  Costs of one ton of 12mm reinforcement bar, popularly known as iron rod ranged between N900,000 and N1.2 million, while 16 mm sold at N1.3 million per ton.

Also, sandcrete blocks were sold between N700.00 and N1,000 per one, depending on sizes.

Due to the rising building materials and construction costs, prices of studio, one-bedroom and two-bedroom apartments in the Federal Government’s Renewed Hope Estates have been pegged between N8.5million and N12.5 million.

In private estates, the house prices range between N20 million and N40 million, depending on locations.

Reflection

Reflecting on some of the challenges in the year, Executive Director, Housing Development Advocacy Network, Festus Adebayo, said that one of the hurdles remained the rising construction costs and tested affordability thresholds in several markets.

He pointed out that 2025 presented significant challenges, despite few achievements during the years.

According to him, persistent gaps in financing and infrastructure arising from economic pressures, which hindered scale-up of projects was among the challenges.

He also listed climate change and resilience, saying they remained a critical need in housing development. He also identified policy implementation’s gaps.

“All of these factors impacted housing delivery negatively all through the year, and these realities underscore the complexity of the sector and the need for more deliberate, coordinated, and innovative responses,” Adebayo said.

For HDAN, he said the year under review has been both defining and instructive, advocating strong advocacy for improved housing delivery, increased policy engagement and greater public awareness of the need to address housing challenges.

“Together, we have sustained strong advocacy for improved housing delivery, increased policy engagement, and greater public awareness of the urgent need to address diverse challenges contributing to rising housing deficits in our continent.

“These achievements reaffirm the power of collaboration in driving systemic change,” he said.

“As a pioneer housing advocacy non-governmental organisation, we have drawn valuable lessons from these experiences. They reinforce the importance of evidence-based engagement, sustained stakeholder alignment, and a shared sense of responsibility in shaping policies and practices that deliver real impact for citizens,” he added.

Other views

In a recent interview, Managing Director/ CEO,  Fame Oyster and Co., Mr. Olufemi Oyedele, blamed a lack of political will and institutional capacity for increasing homelessness among Nigerians.

According to him, housing industry performed abysmally low, describing the sector as “unorganised, underfunded, corruption-laden, unprofessional, under-productive and lacking direction.”

“Though we have adequate resources to achieve adequate housing, we lack the will and the institutional capacity to be self-sufficient in housing.

“The government has refused to adequately organise the people to be able to house themselves, and adequate housing remains a mirage.”

He expressed displeasure over the accommodation gap in the country, pointing out that no fewer than 60 per cent of Nigerians live in slums.

“These are self-help abodes that people manage to remain hopeful. They manage these squalid settlements and inadequate quality houses with the hope that tomorrow will be better. Some have lost hope in a better future due to their past experiences despite the fact that the 1999 constitution of the Federal Republic of Nigeria in Chapter 4 claims that housing is a right of all citizens,” he said.

According to Oyedele, major achievements in the housing sector and  notable challenges in recent times included the Renewed Hope Housing Programme which “aim is to address the nation’s housing deficit by providing affordable, decent and dignified accommodation for citizens, particularly low-income and vulnerable groups.”

“If the government can achieve this aim, it will go a long way to ameliorate the housing sufferings of the people. The building materials hubs planned to be located in the six geographical zones of Nigeria and in which one is already set for the Lekki Free Trade Zone is also laudable achievement,” he said.

Former Chairman, Nigerian Institution of Estate Surveyors and Valuers, Lagos Branch, Dotun Bamigbola, said that affordable housing has continued to suffer due to drastic reduction in people’s disposable income compared to the prices available in the market.

He also blamed high cost of land and bottleneck procedures associated with documentations as major challenges.

He said the only way the country can beat rising rents and property prices is to critically resolve the issues with finishing materials for buildings.

“The moment you can produce that, we have better production, government can create an environment for production of all that.

“We can have a manufacturing hub for things like tiles, things like sanitary fittings, good doors.

“We imported some of these materials from China. Why can’t we be producing something like that? Why can’t we bring the technology instead of going to pay for the importation and all of that?

“The moment you have that, you crash prices to a very fair extent. That will help in developing the system. It will bring more revenue to government in terms of taxes.

“It will also help reduce the cost of housing. It’s not a short-term project, it’s a long-term project. “We’re looking at something you do by the next 10 years and give incentives for people to go and purchase, not that they can purchase anywhere and still compete with those people.

“Once you do that, you find out that as a direction, an economic policy direction, over time, we’ll be able to produce that for the housing sector,” Bamigbola, an astute real estate professional, said.

FG’s housing reforms

According to analysts at the Nigeria Housing Market (NHM), the Federal Ministry of Housing and Urban Development under Arc. Ahmed Musa Dangiwa, places heavy emphasis on shifting housing delivery from fragmented projects to a structured national programme supported by financing partnerships, clearer delivery pipelines, and affordability-focused interventions in 2025.

The year’s changes, they said, were not limited to new construction announcements, saying they included institutional and market-facing actions such as a national PPP framework push, uniform pricing for specific federal housing units, renewed land titling advocacy with a defined state funding target, new building materials industrialisation proposals, and expanded mortgage and rent-assistance product activity through FMBN.

They explained that a central 2025 policy move was the ministry’s deliberate repositioning of housing delivery as a PPP-led national execution program rather than a series of stand-alone government estates.

“This approach was reinforced through the Renewed Hope Housing PPP Summit and related public statements positioning PPPs as the core delivery mechanism for scale, speed, and financing depth.

“This shift signals an intent to reduce fiscal burden on direct government construction and instead use government as aggregator, regulator, and enabler. “For the market, it places greater weight on bankability, developer capacity, and project structuring as prerequisites for federal alignment,” the analysts said.

Also, in mid-2025, NHM’s analysts recalled that the ministry publicly introduced plans for a state-by-state homeownership and housing development campaign.

“The key change here was not a single new housing product, but a proposed governance model aimed at closing the execution gap at sub-national level.

“One of the most concrete consumer-facing policy changes in late 2025 was the Federal Government’s approval of uniform sale prices for Renewed Hope Housing Estate units across states. The stated policy intent was to promote affordability and fairness in access.

“In late 2025, the ministry escalated land administration reform messaging by urging states to allocate a defined percentage of their annual budgets to land administration and systematic titling. This went beyond general “improve land governance” language and placed a numeric target on the table. Positioning of land reform as a national growth lever under the “Land4Growth” framing.

“In 2025, the ministry expanded its policy focus beyond mortgage finance and housing supply, moving into construction cost reduction through local production and industrial planning. A major element was the Building Materials Manufacturing Hubs initiative, presented as a way to reduce costs and support affordable housing delivery.

Analysts also explained that the ministry became publicly involved in managing a major recovered housing asset, the 753-unit estate linked to EFCC recovery activity.

 “The change here was the ministry’s stated intent to assess, complete, and dispose of the units through a transparent process aligned with housing policy goals,” the analysts said.

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