Building materials price hike amid housing deficit

It has become increasingly difficult to argue against the popular view that most stories about Nigeria today are tales of hardship and contraction. While headlines may now highlight modest declines in food-price inflation or slight easing in the cost of some essentials, the reality on the ground, especially in the housing and construction sector, remains glaring and deeply worrying. For many Nigerians, homeownership and decent housing are receding further from reach, even as the broader economy shows signs of stabilisation.

From available data, building materials soar, even as inflation softens, with recent figures showing a painful contradiction. Although general inflation appears to be easing, prices for core building materials continue to rocket.

“It is true that macroeconomic indicators, such as GDP growth, inflation trending lower, and even modest improvements in some consumer-goods prices, may offer hope. But when housing remains out of reach, the sense of national recovery rings hollow for ordinary citizens.”

As of 2025, a 50 kg bag of cement sells for between N10,500 and N12,500, depending on brand and location. Earlier reports highlight that cement prices have more than quadrupled since 2018, a dramatic escalation even compared to the general rise in consumer goods.

Core materials, including cement, steel, and paint, reportedly experienced price surges of over 30 percent in 2024 alone.

In addition, building-cost surveys warn that construction costs (materials and labour) have spiked by 100 to 200 percent over the past two years, driven by currency depreciation, rising transport costs, and supply-chain disruptions. These increases matter deeply because building materials often account for 35 to 75 percent of total construction costs.

The consequences of persistently high building-material prices are far-reaching. For a nation already grappling with a housing deficit measured in the tens of millions, the surging cost of inputs pushes the dream of homeownership even farther away. Developers who once hoped to build affordable units are now forced to pass costs to buyers or shelve projects altogether.

As construction cost feeds into purchase prices, landlords and informal landlords hike rents. For many Nigerians, especially low- and middle-income earners, rent becomes a bigger drain on already limited household income.

Read also: Costs of housing surges as prices of dollar denominated building materials spikes

Slowed housing delivery stagnates social and economic progress. Affordable housing is more than shelter; it is a foundation for stability, family growth, and social investment. When housing deliveries stall, the ripple effects touch education, health, employment, and social mobility.

It is true that macroeconomic indicators, such as GDP growth, inflation trending lower, and even modest improvements in some consumer-goods prices, may offer hope. But when housing remains out of reach, the sense of national recovery rings hollow for ordinary citizens.

A 2024 report summarised this contradiction: “Though headline inflation has dipped marginally, costs of goods and services, especially in construction, remain extremely high.”

Evidence from recent studies and industry reports points to a set of structural and macroeconomic causes responsible for the divergence between general inflation and building-material prices. Top among them are exchange-rate volatility and currency depreciation. Many components of building materials, especially steel, tiles, ceramics, and plumbing materials, are imported or licensed, so when the naira weakens, prices jump.

Fuel price spikes and higher transport expenses increase the cost of moving raw materials like limestone, sand, and cement across states.

Also, shortages of raw materials, supply defaults, and inadequate local production capacity, especially for steel, have forced builders into costlier sourcing or reduced supply overall.

Above all, elevated interest rates make borrowing expensive for developers, forcing many to cut margins or delay projects, which in turn reduces supply and pushes up prices.

Currently in the country, even as everyday food and consumer inflation may be showing signs of levelling, structural cost drivers specific to construction remain dangerously volatile.

Ideally, cement and steel should not double every few years. Producers, distributors, and regulators must ensure that supply-chain costs are managed and that currency/forex volatility does not translate into runaway prices.

Given that building materials make up the bulk of construction costs, curbing price hikes is essential to deliver housing at realistic price points, whether through social housing, subsidised mortgages, or developer incentives.

Robust support for developers, especially those targeting large-scale housing, should be encouraged. Incentives, including tax breaks, concessional financing, and access to land, would enable developers to plan and build en masse, bringing down per-unit costs.

Land ownership bottlenecks, unclear titles, difficulty obtaining the governor’s consent, and lengthy approval processes inhibit developers and add hidden costs. Simplifying and modernising land laws would unlock development.

Encouraging the use of durable, locally available materials (use of interlocking blocks, burnt bricks, and alternative roofing) can reduce reliance on expensive imported materials, thereby lowering costs while boosting sustainability.

To move towards that ideal, the government and stakeholders must act decisively. First and foremost, declare a ‘state of emergency’ in the construction/housing sector, as a national policy commitment, backed by regulation, is needed to prevent monopolistic or oligopolistic control of critical materials (cement, steel, etc.) and to ensure fair pricing and supply.

Tax breaks for developers willing to commit to building 500 to 1,000 housing units per annum, combined with a dedicated fund to subsidise mortgages or provide cheap financing, could revive large-scale housing delivery.

Streamline land registration, fast-track approvals, and reduce bureaucratic delays in obtaining title perfection and Governor’s Consent. This can remove hidden costs and make land, the foundational input to housing, more accessible.

For a country with a housing deficit measured in the tens of millions, this is not just an economic challenge; it is a social crisis. Unless bold, structural policy interventions are adopted, the housing gap will widen, rents will soar, and homelessness will deepen.

The government must treat housing not as an afterthought, but as a national priority. It is time to declare an emergency in the building sector, crack down on price distortions, unlock land, incentivise developers, and support every Nigerian who still hopes to own a home. Anything less, and the façade of economic recovery will crumble in the face of empty door frames and unfinished houses.

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