Nigeria’s housing market is facing significant challenges due to its heavy reliance on imported building materials, according to the State of Lagos Housing Market Report (Volume 3). The report reveals that a staggering 70% of building materials used in the country are imported, leaving the market vulnerable to global supply chain disruptions and currency fluctuations.
The construction industry in Nigeria, particularly in Lagos, is experiencing rapid growth, with an expected annual increase of 8% and a projected value of NGN 25.72 trillion by 2025. However, this growth is being hindered by rising material costs, inflation, and bureaucratic obstacles. The report notes that the market’s expansion is largely driven by price increases rather than volume growth, indicating that the sector’s efficiency and affordability are being compromised by structural issues.
The high demand for housing in Lagos, driven by rapid urbanization and population growth, is further exacerbating the problem. The government’s commitment to infrastructure development, including projects such as the Lagos Rail Mass Transit, is expected to boost property values and demand in the construction sector. However, the report warns that the market’s reliance on imported materials is a significant risk, as it exposes the sector to external shocks and currency volatility.
The prices of essential building materials in Lagos have increased dramatically between 2015 and 2025, with a sharp acceleration from 2023 onwards. For example, the cost of iron rods has surged from N87,000 per 133 units in 2015 to N1,600,000 per tonne or more in 2024, representing a 100% increase from 2023.
To address these challenges, the report recommends a multi-pronged approach, including enhancing local production, optimizing supply chains, and promoting sustainable and innovative building practices. It also emphasizes the need for consistent policy reforms and attracting domestic and foreign investment to stabilize prices and address the country’s severe housing deficit.
The State of Lagos Housing Market Report is a critical analysis of the housing market in Lagos, which serves as a bellwether for the broader Nigerian construction industry. The report’s findings and recommendations are essential for policymakers, industry stakeholders, and investors seeking to navigate the complexities of the Nigerian housing market and unlock its potential for sustainable growth and development.