Business Hilights

Tracking Nigeria's Headline Business News Online

Babatunde Fashola

Housing sector still in recession as prices of cement, others remain out of reach

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The debate whether Nigeria has actually exited recession reverberated on Monday as checks by Business Hilights Economic Intelligence Team (BHEIT), showed that cement and other building materials including sand are becoming unreachable by developers and prospective home seekers.

Investigations showed cement market within the out-going year, displayed much inconsistency in the prices as currently cement still hovers at an exorbitant price range of N2,500 and N3,000.

Besides, government’s silence on the high price is not helping matter.

Visits to several estate development sites in parts of Lagos, Abuja and Port Harcourt including Enugu showed serious drop in building activities and some of the developers’ who barred their minds on the cause of the lull fingered high cost of cement even at a time, Nigeria has long achieved backward integration in the production of the product.

Nigeria had during the last lap of former president Goodluck Jonathan, completed backward integration in local manufacturing of the product, but there has not been any season of price drop so as to jerk up both public and private sector investments in housing delivery.,

Statistics available show that Nigeria is still lagging behind in housing delivery and currently its housing deficit has risen to over 17 million housing units.

Market figures showed that currently, nationwide average cement price stood at about N2,900 as against the price tag of N2, 200 per 50 kilogram bag last year.

This high cement price has a hand in soaring cost of Sandcrete blocks which in parts of Lagos has jumped from N200 and N250 for a six-inch and nine-inch block categories to N220 and N270 respectively.

In a recent interview, the National General Secretary, Real Estate Developers Association of Nigeria (REDAN), Mr. Akintoye Adeoye, said investors, especially those in the residential sub-sector, had yet to feel the impact of a rebound in the economy.

He noted that despite several innovative options that had been made available to buyers, developers were still unable to sell off or lease properties.

Adeoye noted that “As developers, we haven’t felt any change in the economy. It is still the same as it was about one year ago when the recession was biting hard. Many houses are still vacant despite the fact that developers are becoming very innovative with offers to investors.

“We have come up with offers some of which allow subscribers to pay between 20 and 30 per cent deposit, move into the houses and spread the balance over four to six-year period. But despite this very generous offer, many subscribers are not forthcoming, because they are unable to come up with the deposits even on houses as cheap as N9m. So, in the real estate industry, we are still in a recession.”

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