Marginal slump in prices of cement, wood raises hope for low cost housing 

The marginal slump in prices of cement and wood, two major components in building construction in Nigeria have heightened hope for low-cost housing development in the country.

Before the slump, the hike in prices of cement and other building materials had threatened the aspiration of prospective homeowners.

For instance, the price of cement amassed about 48 per cent increase between November and December.

A bag of cement was sold at N3, 500 as at November last year but by end of the year to early this year, it went as high as N3, 700, raking about 48 per cent rise in price within November and December.

However, in between, the price came down to N3, 000, meaning a reduction of 38 per cent, which players said is a positive development for the low cost and affordable housing campaign of the present administration.

Similarly, the price of wood frame, which goes for N3, 500, for size 2×3, 2×7, N8, 000 and 2×10, N10, 000, also dropped significantly over the week.

Timber dealers said it was as a result of the dry season that allows easy processing of wood.

The Chief Executive Officer, Kaytise Ventures Limited, Mr. Alatise Kazem Olakanmi, said the price of wood is coming down because the roads to the forests are easily accessible thereby reducing the challenges faced during the rainy season.

Apart from Plywood, which is going up to N10, 000, because of the dollar exchange rate the price of others dropped significantly.

For instance, the price for 2×6 hardwood ranges between N1,100 and N1, 500, depending on whether it is manually or engine sawed.

Also, the price for 2×4 goes between N750 and N1, 000 while softwood 2×3 used for formworks goes between N300 and N350.

The price of panel door is between N8, 000 and N13, 000 depending on if it is Mahogany or Milana.

Olakanmi said the government’s 300,000 housing project may be feasible because materials can be assembled in bulk while cost can be reduced.

He, however, urged the government to increase access to funding for timber merchants as well as improve on the security challenge in the country because of the high risk involved in the timber business.

A developer and Managing Director of Propertygate, Adetokunbo Ajayi, expressed happiness with the slump in price, stressing that if the price of input of housing construction goes up, the price of the end products will also go up.

Ajayi noted that building construction is more of an amalgam of various inputs, like cement, reinforcement, doors, including labour and consultancy services. He observed that when those components are going up, the final output would also be expensive.

“So, if you see a trend that one is coming down, it is a positive outlook. We only pray that it maintains that because practitioners will not be happy that the prices are going higher and the end products will be very high.
“When your end products are becoming very high, then affordability becomes an issue to people, who want to purchase your products. “ It is better for everybody when prices come down”, he added.

Ajayi stressed that apart from the prices of cement and woods, the price of other inputs has gone up like granite, sand, paints, and raft pipes used for scaffolding.

Sharp sand, he noted, moved from N65, 000 to N80, 000, while the labour cost rose from N2, 500 to N3,500.

The price of iron rods has also increased in the past two months worsening the woes of developers who are already suffering from declining revenue.

Also, a survey of the market by The Guardian revealed that a tonne of 12mm reinforcement is sold for N265, 000, 10 mm, N260, 000, 20mm N260, 000, while 25mm and 8mm go for N265, 000.00 and N205, 000.00 respectively.

A dealer, Mr. Sola Adewuyi said the cost of reinforcement has gone up by over 20 per cent.

He attributed the situation to the economy, stressing that the manufacturers didn’t give any major reason for the increase.

Only recently, the Federal Government and cement manufacturers have agreed on a discount price on cement for the construction of 300,000 houses under the Economic Sustainability Plan, ESP, for low income earning Nigerians.

The 300,000 housing unit is part of the Federal Government Social Housing Scheme aimed at providing affordable houses for low-income citizens.

The Vice President, Yemi Osinbajo, during a visit to the completed model houses in Dei Dei, an outskirt of the Federal Capital Territory, FCT, said it was possible to deliver decent and affordable accommodation that will be within the reach of many Nigerians.