The construction sector in Nigeria is facing strong price pressures, which are increasingly being passed on to the housing market. Data cited by BRG Building Solutions shows that between 2019 and 2026, the prices of basic construction materials have increased by up to 440%, making it difficult for both entrepreneurs and households who build with their own funds.
The strongest growth is in reinforcing steel - about 410%, followed by cement with approximately 367% and building blocks with about 275%. The reasons are a combination of the depreciation of the Nigerian naira, higher production costs, expensive transportation and a heavy reliance on imported materials and equipment.
The finishing materials segment is particularly sensitive. Approximately 60-80% of products such as tiles and sanitary ware are imported, making their prices highly dependent on the exchange rate and international supplies.
Cement prices rose sharply again in 2026.
The problem is not just long-term. In August 2026, BusinessDay reported another jump of about 23% in the price of cement in just one week - from approximately 13,000 to 16,000 naira for a 50-kilogram bag. This is forcing private builders and prospective owners to review their budgets or temporarily halt projects.
Earlier this year, cement prices in various parts of the country were already hovering between 11,500 and 15,000 naira per bag, compared to around 7,500 naira at the end of 2025. Over the same period, steel prices have risen by about 20% and sharp sand by approximately 25%.
For construction companies, this means constantly changing costs. Some developers are forced to renegotiate contracts during implementation, as initial budgets become outdated in just a few months.
Affordable housing hit
The worst impact is on the low and middle price segments.
Representatives of the Nigerian construction sector warn that high prices for cement, steel, roofing materials, transport and infrastructure are making affordable housing increasingly difficult to achieve.
The reason is simple: developers have a smaller margin for housing for lower-income households, and they have a significantly more limited ability to absorb price increases. Therefore, some of the capital is directed towards more expensive projects, where the higher costs can be more easily passed on to the end buyer.
This further exacerbates the shortage of affordable housing.
Housing deficit remains huge
Estimates of the size of the housing deficit in Nigeria vary significantly depending on the methodology.
A National Technical Committee under the Federal Ministry of Housing puts the official deficit at about 14.9 million homes, with an additional approximately 15.2 million homes classified as structurally inadequate or substandard. If these are included, the effective shortfall approaches 28 million housing units.
This is a more precise estimate than the oft-repeated claim of “over 20 million missing housing units“, as it shows the difference between an actual shortfall and an existing but substandard housing stock.
In Lagos, the problem is particularly acute. An earlier World Bank estimate indicated a shortfall of about 3-4 million well-located and affordable housing units in the metropolis alone, with 87% of the need among low- and very low-income households.
Land and credit further increase the cost of construction
Construction materials are only part of the problem.
The World Bank points out that in urban housing, land can account for between 40% and 80% of the total property price. Added to this are high mortgage rates, limited mortgage financing and weak infrastructure.
For many Nigerian developers, bank financing remains prohibitively expensive, which is why projects are often built with their own capital or buyers' funds. This increases risk and extends construction times.
Households themselves are also struggling. High interest rates and significant down payment requirements limit access to mortgages for a large part of the population.
Higher construction costs are also being passed on to rents
The rise in cost is already being felt in the rental market. According to industry representatives, rents for small detached houses in Abuja have reached between 800,000 and 1.5 million naira per year, compared to around 400,000 naira previously. In Lagos, similar homes are being sold for around 800,000-1 million naira per year, also at significantly lower levels in the past.
These figures are market estimates, not an official national index, but they indicate the direction of pressure on households.
The market faces a difficult balance
Nigeria is in a difficult situation - the country has a huge need for new housing, but construction is becoming increasingly expensive at a time when real incomes remain under pressure.
The World Bank notes that the economy has gradually stabilized after recent reforms, but high inflation, poor access to finance and large infrastructure deficits continue to limit household purchasing power.
This means that the housing crisis can hardly be solved by more construction alone. Cheaper construction materials, more accessible long-term financing, improved infrastructure, and policies that allow developers to build housing for the mass market are needed.
Otherwise, the rising cost of construction will continue to increase the prices of new homes and rents, while more and more households will be pushed out of the formal housing market.
Detailed statistics on average property prices in Bulgaria by city and neighborhood can be found at imot.bg