From the last quarter of 2018 to now, building materials prices have made positive movements from point A to B despite the lull in the property market and a significant slowdown in construction activities.
Whereas the slowdown in construction activities is as a result of the on-going elections in the country, the property market is yet to recover from the impact of the 15-month economic recession that crimped consumer spending power and forced real estate products consumers to reorder their priorities, leading to a drop in demand that is as deep as 30 percent in some high-end neighbourhoods.
But building materials prices are spiking, notably iron rods and moulded blocks (6 and 9 inches) which have, in the last three months, seen 20 percent and 25 percent price hike, respectively.
BusinessDay investigations reveal that whereas prices of iron rods have gone up because buyers have shunned the hike in their purchasing decisions, prices of 6 and 9 inches blocks are responding to new regulatory guidelines released recently by the Lagos State government for block moulders.
The prices of moulded blocks have moved from N200 per unit of 9-inch block to N250 and from N180 per unit of 6-inch block to N200. Similarly, the prices of iron rods have also increased as a tonne of 8mm moved from N180,000 to N185,000; 10mm moved from N195,000 to N215,000; while 12mm and 16mm moved from between N190,000 and N192,000 to N205,000.
Olutayo Osifolu, managing director, Tayo Blocks Industry located along Idimu-Ikotun road, confirmed the new prices of blocks in an interview, blaming it on the Lagos State government’s new directive issued to block moulders’ association.
“The adjustment in the price of blocks is due to the directive by the Lagos State government for us to increase the quality of blocks used in building houses in order to reduce the high incidence of building collapse in the state,” he said.
With the new directive, granite dust, which is a very expensive material, was introduced as a compulsory component for moulding blocks. As a result, block moulders now make use of granite dust, sharp sand, maya material and cement in block moulding, but formerly the moulders used only sharp sand, maya material and cement without granite dust.
Previously, moulders used 14 bags of cement to mould 500 blocks, but with the new directive, they are expected by the Lagos State government to make use of 16 bags of cement to mould 500 pieces of blocks, thereby increasing cost.
BusinessDay understands that the addition of granite dust into moulding of blocks resulted in the rise in the prices of blocks and that the government is insisting on the use of granite dust because it does not have organic materials that weaken buildings.
A visit to a building materials market in Lagos revealed further that a trip of 15 tonnes of granite dust, which formerly sold for N90,000, now goes for N110,000, while the price of one bag of cement dropped from between N2,500 and N2,600 to between N2,300 and N2,400.
A dealer, who gave his name as Rasheed of Omo-Oba Ventures, a Lagos-based company that deals on iron rod, blamed the temporary stoppage of importation and production of rods (probably due to elections) for the price increase.
Timilehin Akinyemi, chief executive officer, Twins Faja Nigeria Limited, however, explained that the price increase was because most of the suppliers were just beginning production for the year and not all of them have begun, adding that the few that were producing had been stirring the price increase because supply was still low.
Meanwhile, Aluzinc, a galvanized steel with metal coating composed of aluminium, has been topping the demand for roofing sheets for its fashionable designs and moderate prices in the last 10 years.
According to SJONES Nigeria Enterprises, well-heeled consumers appear to increasingly pitch tent with the stone-coated variant, which is currently the most expensive at N2,500 per square metre. But moderate spenders are settling for Aluzinc at N16,500 per bundle or Zinc at N14,500 per bundle.
CHUKA UROKO & AMAKA ANAGOR-EWUZIE
