High Building Materials Costs Frustrate Affordable Housing Delivery as Stakeholders Set Agenda for 2025
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Loading... - Philip Udofot
- 17 Jan 2025
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The year 2024 proved to be a challenging one for Nigeria’s housing sector, despite efforts to implement new policies and strategies aimed at addressing the country’s housing needs. The Federal Mortgage Bank of Nigeria (FMBN) reported a housing unit shortfall of over 20 million units, highlighting the urgent need for effective solutions.
Data from the National Bureau of Statistics (NBS) indicated that inflation in the building materials sector rose by 12% in 2024, driven by supply chain disruptions, foreign exchange volatility, and the soaring costs of essential materials like cement. For instance, cement prices reached an all-time high of N9,500 per bag, placing immense pressure on builders and developers.
Festus Adebayo, Executive Director of the Housing Development Advocacy Network (HDAN), emphasized that the skyrocketing costs of building materials are a significant barrier to affordable housing. He noted, “How will we be talking about affordable housing under this kind of situation?”
Despite the introduction of the Renewed Hope Housing Strategy by the current administration, stakeholders like Mr. Benjamin Onigbinde, CEO of Sigvent Property Trust Limited, expressed disappointment over the lack of substantial progress in the housing sector. He likened the new strategy to previous initiatives, such as the Shehu Shagari Administration’s housing program, which delivered minimal real change.
Onigbinde pointed out that limited access to housing finance and weak regulatory frameworks have hindered the sector’s performance, contributing to issues like building collapses, widespread fraud, and inadequate consumer protection in the real estate market.
Looking ahead to 2025, experts are calling for a fundamental shift in the housing sector. Onigbinde advocated for a consumer-centered approach to housing development, emphasizing the need to prioritize the preferences and requirements of buyers rather than imposing uniform designs. This shift could make housing more affordable and reduce the number of unfinished estate projects, which currently contribute to high levels of dead capital in the industry.
He also highlighted the importance of stricter regulation in the real estate sector to combat unregulated developments and housing fraud. He pointed to the Lagos State Real Estate Regulation Agency as a model for national regulation, suggesting that similar frameworks should be adopted at the federal level.
Adebayo urged the government to create an enabling environment for affordable housing development, suggesting that tax reforms could provide much-needed relief for developers willing to build social and low-cost housing. He recalled successful past initiatives, such as the provision of free land and infrastructure development under former Minister of the Federal Capital Territory, Nasir El-Rufai, which spurred growth in areas like Lokogoma and Sun City in Abuja.
He stated, “The only way is for the government to come up with an enabling environment. We are talking about new tax reforms. These are just a way to motivate people to build houses that are affordable.”
As Nigeria’s housing sector grapples with high building material costs and regulatory challenges, stakeholders are calling for a concerted effort to address these issues in 2025. By prioritizing consumer needs, implementing effective regulations, and fostering collaboration between the government and private sector, there is potential for significant progress in delivering affordable housing solutions for the Nigerian populace. The time for action is now, as the need for affordable housing has never been more pressing.
