Nigeria’s real estate and construction sectors are navigating severe cost pressures and shifting demand dynamics, as building material prices surged by as much as 440 per cent between 2019 and 2026.
According to a report by Panterra Real Estate Group, led by Ayo Ibaru, the prices of key structural and finishing materials skyrocketed during the period, with some components rising by as much as 440 per cent relative to their 2019 baseline levels.
The report noted that between 60 per cent and 80 per cent of finishing materials, including tiles, sanitary ware and window fittings, are imported, resulting in widespread reliance on grey-market channels.
The data index by Panterra Real Estate Group attributed the continuous and steep price increases across both locally produced and imported construction materials to rising import exposure, currency depreciation and increasing production costs.
It noted that Nigeria’s acute housing deficit was putting additional pressure on property development across the country.
According to the report, the prices of key building materials increased significantly between 2019 and 2026. Roofing sheets, for instance, surged by 440 per cent per square metre, driven largely by rising logistics costs and foreign exchange exposure, with aluminium roofing recording some of the largest price swings.
During the period, the price of iron rods increased by 410 per cent per tonne. The report said steel prices remained highly volatile due to the continuous depreciation of the naira and the high cost of imported scrap metal.
Similarly, the price of a 50-kilogramme bag of cement increased by 367 per cent, with retail prices rising from about N2,500 in 2019 to N14,000 in 2026.
The price of a standard six-inch block also increased by 275 per cent, closely tracking the rise in cement prices and further amplified by higher labour and sand costs.
‘PVC pipes (per roll) grew by 240 per cent (Index: 340). This category recorded a relatively moderate increase as domestic manufacturing partially cushioned direct import exposure,’ Ibaru noted in the report.
The report highlighted underlying structural constraints within Nigeria’s building supply chain as a major reason material prices continue to rise faster than broader inflation.
According to the report, three major players, Dangote, BUA and Lafarge now HMB, control approximately 70 per cent of Nigeria’s domestic cement market, while power costs account for roughly 30 per cent of total manufacturing expenditure.
The report also cited underutilised steel production capacity, noting that local steel mills, including Delta Steel, have historically operated at less than 30 per cent capacity, leaving the market heavily reliant on imported steel products.
‘Steel costs remain volatile due to ongoing naira depreciation and the high cost of imported scrap,’ the report stated.
The Panterra report also identified unregulated timber supply as one of the major challenges facing Nigeria’s real estate and construction sectors.
According to the report, wood remains locally available but is largely unregulated, while accelerating deforestation is compounding long-term supply risks.
Meanwhile, homebuilders, property developers and built-environment professional bodies, including the Nigerian Institute of Building (NIOB), Nigerian Institution of Estate Surveyors and Valuers (NIESV) and Nigerian Society of Engineers (NSE), among others, have warned that uncontrolled increases in building material prices threaten the provision of affordable housing across major urban areas.
A former President of the NIOB, Mr Kunle Awobodu, said developers were being forced to renegotiate project contracts midway through construction because of unpredictable increases in material costs.
‘We are having to renegotiate project contracts midway through execution,’ Awobodu said.
‘When a single bag of cement moves from N2,500 to over N14,000 in a few years, standard project contingency budgets simply can’t absorb the shock,’ he added.