The Nigerian construction and real estate industry is facing a paradox: growing demand for housing on one hand, and escalating building costs on the other. For property developers, investors, and even individuals looking to build, the increasing cost of construction materials and services is reshaping how and where people invest in real estate.
In this blog post, we’ll explore the current market trends and the factors behind the rising cost of building in Nigeria, and offer strategies for adapting to these challenges.
🏗️ Current Market Trends in Nigeria’s Construction Industry
Despite economic pressures, Nigeria’s real estate sector continues to see significant activity—especially in urban centers like Lagos, Abuja, and Port Harcourt. Some key trends include:
1. Growing Urbanization and Housing Demand
Nigeria’s population is estimated to exceed 223 million by 2025, with increasing urban migration. Lagos alone receives over 2,000 new residents daily, fueling the demand for residential, commercial, and mixed-use buildings.
2. Shift Toward Affordable and Modular Housing
As costs rise, there’s a growing trend toward affordable housing and pre-fabricated structures. Developers are exploring compact designs, alternative materials, and shared amenities to reduce construction and maintenance costs.
3. Increased Focus on Sustainable Building
Energy efficiency and sustainable construction are gaining traction, especially among high-end developers and eco-conscious buyers. Features like solar power, water recycling, and insulated roofing are becoming more common, despite their upfront cost.
4. Private Sector-Led Development
Private developers are increasingly leading real estate growth, especially in areas like Ibeju-Lekki, Epe, Ajah, and Gwarinpa, where infrastructure is rapidly improving.
💰 The High Cost of Building: What’s Driving It?
If you’ve attempted to build or renovate a property recently, you’ve likely felt the financial squeeze. Here’s why construction costs are skyrocketing:
1. Exchange Rate Volatility
Many building materials (e.g., cement additives, tiles, steel rods, roofing sheets) are imported, and the fluctuating exchange rate—especially the weakening of the naira—has a direct impact on pricing.
2. Inflation and Rising Fuel Costs
General inflation in Nigeria, combined with removal of fuel subsidies, has increased the cost of transporting materials and paying laborers. This affects everything from block production to site clearance.
3. Scarcity of Skilled Labor
As skilled workers migrate abroad or shift to higher-paying sectors, wages for artisans such as bricklayers, electricians, and carpenters have increased—pushing up the total cost of projects.
4. High Cost of Cement and Steel
Cement prices have risen by over 60% in the past 2 years, with steel prices doubling in some areas. This is due to both global supply chain issues and local production limitations.
5. Regulatory and Permitting Bottlenecks
Obtaining land titles, building permits, and development approvals can be time-consuming and costly. Hidden charges and bureaucracy add to overall project expenses.
📉 Impact on Investors and Developers
- Delayed Projects: Many projects stall halfway due to unexpected cost increases.
- Higher Property Prices: Developers pass the cost to buyers, making homes less affordable.
- Reduced ROI: Rental yields and capital appreciation may not keep pace with development costs, affecting profitability.
- Increased Demand for Completed Homes: Many buyers now prefer already-built properties to avoid construction stress and cost uncertainty.
💡 How to Navigate the Rising Costs
✅ 1. Plan Thoroughly and Budget Realistically
Account for inflation and cost increases before breaking ground. Include at least 15–20% contingency in your budget.
✅ 2. Build in Phases
Consider phased development or starting with a smaller structure you can expand over time. This reduces financial pressure and allows for cash flow recovery.
✅ 3. Source Materials Locally
Where possible, use locally sourced materials to reduce reliance on imports and forex fluctuations. Consider alternatives like stabilized earth blocks, bamboo, or recycled materials.
✅ 4. Partner with Reputable Builders
Work with professionals who have experience managing budgets and timelines, and who can help you avoid costly mistakes.
✅ 5. Invest in Strategic Locations
Target areas where land is still affordable but infrastructure is improving—like Epe, Sangotedo, Mowe, or parts of Abuja outskirts. You’ll save on land while positioning yourself for future value appreciation.
🏠 Conclusion: Cost Is Up, But So Are Opportunities
The rising cost of building in Nigeria is a real challenge—but it’s not the end of profitable investing. In fact, savvy developers are using this period to innovate, streamline processes, and find new ways to meet market demand.
By understanding current trends and adapting to the economic landscape, investors and homebuilders can still thrive—even in today’s cost-intensive environment.
📞 Ready to Build or Invest Smartly?
At Geomatrice Limited, we help individuals and investors navigate Nigeria’s real estate landscape with verified properties, construction support, and affordable development options.
💼 Whether you’re looking to build, buy, or invest, we’ve got you covered.
🔗 geomatricelimited.com.ng
📞 +234 7069 1413 49, +234 7035 8420 07
📧 info.geomatriceproperty@gmail.com
Let’s build smarter, not just bigger.
