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Real estate market 2022: Inflation-induced hike in building materials hits home-seekers, developers hard

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By Wilson Adekumola

The real estate sector in Nigeria has been facing some difficulties as the rising cost of building materials continues to have significant bearing on rentals and the cost of delivering affordable housing for citizens.

The current inflation fighting mode is having adverse effect on many real estate developers.

Experts have lamented inflation rate in the Country, linking it to the Country being a consuming and not a producing nation.

The situation has put the developers or house managers on sad mood, lamenting they are not enjoying the best of their time in the industry.

The development has informed upward review of prices of housing units in developers’ stocks, while there has been issue with delay in delivering projects timely due to the economic meltdown.

Other issues of concern include, the cost of acquiring land, unavailability of skilled labour, fluctuating foreign exchange, logistics problems and bottlenecks in supply chains that affected projections negatively.

The prices of essential building reinforcement, sand, roofing sheets, ceiling, iron rod, paints, plumbering materials, tiles, cement and granite have increased geometrically in the recent past.

For instance, cement that was sold for N4,l000 early 2022 increased to N4,500, 30 tonnes of granite sold for N180,000 increased to N250,000, 10 tonnes of sharp sands which was earlier about N80,000 increased to N120,000 and so on.

It is pertinent to note that building materials has been playing a vital role in the construction industry.

The building materials industry is believed to be the life nerve of the economy of the built industry, because of it’s output impact on both rate and quality of construction work.

It also constitute the largest single input in housing construction with 60 per cent of the total house expenditure used for the purchase of building materials, while the remaining 40 per cent is to be spent on labour.

Experts in the industry have argued that the price of building materials is the main factor that put limit in the supply of housing, hence, fall in real estate as the price of materials hit the roof.

It was gathered that, the average cost of building materials in Nigeria went up by 35.75 per cent in the first half of 2022 compared to the same period in 2021.

The statistics were revealed in a report that was gathered by Northcourt Real Estate, titled, “Half Year 2022 Nigeria Real Estate Market Review”.

It maintained further that, “the rising cost of building continues to have a native influence on the real estate.”

This development has consequently affected the price of rentals in major cities such as, Lagos, Ogun, Ibadan, Abuja, Port Harcourt and Kano with landlords and property developers influenced to increased rent at least by 80 per cent recently.

It is also important to bear in mind that most residents who are victims of this hassle of homeowners and house developers because of the increase due to the soaring price of building materials, in these cities, are lamenting the increase on rent and cost of housing unit.

The question has been how and when government will intervene by creating a system or enabling environment that will make the low-income earners own a house?

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Tinubu approves take-off of N100bn consumer credit for Nigerians

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President Bola Tinubu has approved the commencement of the N100 billion Consumer Credit Scheme for Nigerians amid escalating economic hardship in the country.

Ajuri Ngelale, the President’s spokesperson, disclosed this in a statement on Wednesday.

He stated that interested Nigerians are expected to visit the portal of Nigerian Consumer Credit Corporation before May 15, 2024.

“Consumer credit serves as the lifeblood of modern economies, enabling citizens to enhance their quality of life by accessing goods and services upfront, paying responsibly over time. It facilitates crucial purchases, such as homes, vehicles, education, and healthcare, which are essential for ongoing stability and the pursuit of their aspirations.

“Individuals build credit histories through responsible repayment, unlocking more opportunities for a better life. The increased demand for goods and services also stimulates local industry and job creation.

“The President believes every hardworking Nigerian should have access to social mobility, with consumer credit playing a pivotal role in achieving this vision.

“The Nigerian Consumer Credit Corporation (CREDICORP) achieves its mandate through the following: Strengthening Nigeria’s credit reporting systems and ensuring every economically active citizen has a dependable credit score. This score becomes personal equity they build, facilitating access to consumer credit, Offering credit guarantees and wholesale lending to financial institutions dedicated to broadening consumer credit access today and Promoting responsible consumer credit as a pathway to an improved quality of life, fostering a cultural shift towards growth and financial responsibility.

“In line with the President’s directive to expand consumer credit access to Nigerians, the Nigerian Consumer Credit Corporation (CREDICORP) has launched a portal for Nigerians to express interest in receiving consumer credit.

“This initiative, in collaboration with financial institutions and cooperatives nationwide, aims to broaden consumer credit availability.

“Working Nigerians interested in receiving consumer credit can visit www.credicorp.ng to express interest. The deadline is May 15, 2024.

“The scheme will be rolled out in phases, starting with members of the civil service and cascading to members of the public,” the statement said.

Recall that two months ago, a presidential spokesman, Bayo Onanuga, announced that the Federal Executive Council had given the nod for the establishment of the Consumer Credit Scheme.

He said the President’s Chief of Staff, Femi Gbajabiamila, will lead a committee that includes the Budget Minister, Attorney-General, and Coordinating Minister of the Economy and Finance to make the scheme a reality.

In March, the Chairman of the Federal Inland Revenue Service Chairman, Zacch Adedeji, said the Nigerian government would unveil its proposed N100 billion consumer credit loan in a few days.

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Nigerian Govt grounds Dana Air operations

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The Nigerian Government has suspended the operations of Dana Air.

The order followed an incident involving a Dana Air plane at Lagos airport on April 23, which forced aviation authorities to divert flights from local to international airport.

The decision was announced by Minister of Aviation, Festus Keyamo.

Details shortly…

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CBN disowns notice on cryptocurrency transactions

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The Central Bank of Nigeria says a notice circulating on social media about the risk of cryptocurrency is fake news.

The Apex disclosed this via its official X account, urging the public to disregard the purported notice for all Deposits Money Bank, Non-Bank Financial Institutions, and other Financial Institutions.

The notice reminded “Institutions that dealing in cryptocurrencies and facilitating payments for cryptocurrency exchanges is prohibited”.

However, CBN said the content doesn’t originate from it.

“This information does not originate from the Central Bank of Nigeria.

“For authentic updates, please visit the official website,” CBN wrote.

Recall that the CBN governor, during the Bank’s 293rd Monetary Policy Committee meeting, said over $26 billion funnelled through Binance.

On Tuesday, the Chairman of the Economic and Financial Crimes Commission, EFCC, Ola Olukoyede, said the anti-graft agency froze about 300 accounts to ensure the safety of the foreign exchange market.

The Nigerian government had continued clamping down on Binance and other cryptocurrency platforms amid efforts to defend the Naira in the foreign exchange market.

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