70% of imports endanger housing market report

Nigeria’s heavy dependence on imported construction inputs is placing its housing market at significant risk, according to the newly released State of Lagos Housing Market Report (Volume 3). The report warns that with 70 per cent of building materials sourced from abroad, the sector remains vulnerable to global supply disruptions and persistent currency instability. Despite the country’s abundant natural resources, the study notes that limited processing and manufacturing capacity continue to hinder self-sufficiency and keep the industry tied to foreign supplies.

The report emphasises that this high import reliance exposes developers and homebuyers to unpredictable price swings. It cautions that global chain disruptions, inflation, and exchange-rate volatility could worsen the already challenging conditions for the housing market. To address these risks, the report recommends a broad strategy focused on scaling up local production, strengthening supply chain efficiency, implementing consistent policy reforms, and promoting sustainable and innovative building practices. It further stresses the need to attract both domestic and foreign investment to stabilise prices and help bridge Nigeria’s wide housing deficit.

Lagos, the country’s commercial nerve centre and most populous city, is highlighted as the most critical point of analysis. Its construction and real estate markets often mirror national trends, making developments within the state a useful barometer for understanding the wider sector. The report notes that Nigeria’s construction industry is on a strong growth path, projected to expand by eight per cent annually and reach ₦25.72 trillion by 2025. Between 2020 and 2024, the sector recorded a robust Compound Annual Growth Rate of 12.1 per cent, with forecasts pointing to continued growth at a CAGR of 6.4 per cent between 2025 and 2029, potentially hitting ₦35.38 trillion by 2029.

This expansion is driven by rapid urbanisation, increased demand for housing and commercial developments, and major public infrastructure projects such as the Lagos Rail Mass Transit and multiple road upgrades. These initiatives are expected to boost property values and fuel continued construction activity.

However, rising material costs, persistent inflation, bureaucratic delays, and high financing costs continue to weigh heavily on the market. The report indicates that while the sector’s overall value is increasing, much of this growth is being driven by escalating prices rather than actual production volume. This suggests that the industry’s potential is being constrained by deep-rooted inefficiencies within the building materials market. Structural issues—particularly affordability challenges—are being masked by the inflated monetary value of the sector.

The report further notes that Lagos feels the impact of national economic pressures more intensely than other regions, with inflation, currency depreciation, and supply bottlenecks often amplified within the city. Because Lagos serves as a microcosm of the national market, successful reforms implemented there could provide a viable framework for wider national improvements.

A historical review of material prices shows a dramatic surge between 2015 and 2025. Iron rod prices, for instance, rose sharply from tens of thousands of naira in 2015 to well over ₦1.6 million per tonne by 2024, with increases continuing into 2025. This extreme escalation underscores the urgent need for reforms to prevent further destabilisation of the housing and construction markets.