BUILDING MATERIALS COSTS INCREASES AND SUSTAINABILITY IN REAL ESTATE DEVELOPMENT IN NIGERIA

ABSTRACT

Sustaining real estate provision is vital in order to diminish the inaccessibility of housing to citizens, and is one of the best proactive and innovative measures to improve housing estates against the deficit challenge prevailing in Nigeria. This study examines the factors and effects of increasing costs of building materials in real estate development sustainability in Nigeria. The study found that eleven dynamics were significant to contributing to the widespread deficits, deplorable conditions and inaccessibility of housing units’ to people. The study further indicates that these factors also underscore the ever increasing rent of residential properties in the area. The study reflection should greatly assist in depicting better ways of tackling these issues so that reductions in the impact of building materials cost increases on real estate provision as experienced in practice can be sustained within the system. A ‘think tank’ effort is recommended for relevant stakeholders.

BACKGROUND TO THE STUDY

Researchers in building sector have indicated that between 50 to 60 per cent of the total construction input goes into building materials. As a result, there is an urgent need to address the high cost of these products which is said to have slowed down the growth of the building and construction sector in Nigeria. Building materials constitute the largest single input in housing construction. While Adedeji (2010) observed that about sixty (60) per cent of the total housing expenditure goes for the purchase of building materials, Arayela (2005) averred that the cost of building materials constitute about 65 percent of the construction cost.
Ogunsemi (2010) opined that building materials form the main factors that restricts the supply of housing and ascertained that they account for between 50-60 percent of the cost of buildings.

Thus, Adedeji (2002) rightly observed that one main barrier to the realization of effective housing in Nigeria as revealed in successive government efforts has been the cost of housing in the country. He argued that in the early periods, shelter in Nigeria was easily affordable as building materials were sourced from the immediate environment at affordable costs. Technology also was readily available with commensurate simple techniques. But contact with the outside world through interregional and international training of professionals in foreign countries as occasioned by colonization, brought changes to tastes and hence outlook to house forms. These changes rendered the undeveloped local building materials inadequate while there was an increased demand for exotic ones. Accordingly, Arayela (2002) posited that the modern building industry lays much emphasis on sophisticated building materials and techniques that are expensive and energy consuming. Though, housing delivery efforts have evidently been inhibited by prohibitive costs of building materials, this problem cannot be reasonably and reliably overcome by merely resorting to the use of locally available materials without due considerations to the applicable initiative, the cost of processing and sustainability of the local materials. One of the most important components of a sustainable building is the material efficiency. Correct selection of building materials can be performed by taking into account their complete life span and by choosing products with the minimal environmental impacts. For instance, González and Navarro (2006) estimated that the selection of building materials with low environmental impacts can reduce carbon dioxide (CO2) emissions by up to 30%. The use of renewable and recycled sources is widely encouraged as the life-cycle of a building and its elements can be closed (Chwieduk, 2003).

The major factor that greatly affect the selection of building materials are their costs and social requirements such as thermal comfort, good mechanical properties (strength and durability), aesthetic characteristics and an ability to construct quickly. Ideally, the combination of all environmental, economic and social factors can give a clear description of a material, and thus helps in a decision making process regarding the cost of the materials suitable for buildings (Abeysundara, et, al.,2009) . Nigerians would continue to pay more for accommodation in major cities until the cost of building materials is subsidized through probably through tax reduction. The instability in the price of building materials was posited as a direct result of high taxes which in turn impacts on the cost of accommodation in major cities across the country. According to Arayela (2002), many completed housing estates had remained unoccupied because of the high rental and sale prices attached to them as against the meager income of the average Nigerian workers. He also added that if government can revitalise our industrial base, the cost of building materials will come down and many more people would be able to build houses. He therefore urged the Federal Government to provide tax relief for local manufacturers and importers of building materials in order to reduce the high cost of accommodation in major cities.

1.2 STATEMENT OF THE PROBLEM

Building materials have been playing an important role in the construction industry—they are those materials put together in erecting or constructing structures, no field of engineering is conceivable without their use (Akanni, 2006; Udosen & Akanni, 2010). Building materials contribute immensely to the quality and cost of housing, from what is used in the foundation to the materials for roofing and finishes, while the building materials industry is an important contributor to the national economy of any nation as its output governs both the rate and the quality of construction work.

The cost of building materials poses a significant threat to both the construction industry and people aspiring to own houses (Anosike, 2009; Mekson, 2008; Mohammed, 2008; Njoku, 2007); for example, a bag of cement, which is valued at Ν1,350.00 in 2006, goes as high as Ν1,850.00 in 2009 (Anosike, 2009) depicting about 37% increment; the bag goes as high as Ν2,000.00 in 2015 during peak season (field survey 2015). Supporting this view, Jagboro and Owoeye (2004) earlier established that increase in the prices of building materials has multiplier effects on housing development while Idoro and Jolaiya (2010) affirmed that many projects were not completed on time due to the cost of materials, which have been on the increase. Besides timely completion, high prices of building materials form a crucial constraint to improving housing conditions in Nigeria (United Nations Centre for Human Settlement [UNCHS], 1993). In spite of the past studies on the cost of building materials in Nigeria, little is publicized about the implications of the rise in cost on the construction industry; most literature (Jagboro & Owoeye, 2004; Mekson, 2008; Njoku, 2007; Oladipo & Oni, 2012) has concentrated on identifying the causes with little emphasis on the implications; hence, the research seeks to provide information on the effect of cost of building materials on housing development in Nigeria.