Falling demand for housing, arising from outrageous price tags, especially in highbrow locations in Nigeria, has compelled investors and estate developers to explore ways of lowering construction cost, in order to make their products affordable and stimulate buyer-interest.
In furtherance of this, a new building technology introduced into the country’s housing industry recently, appears poised to break the affordability jinx , leveraging its capacity to reduce construction cost, increase building speed and control material wastage.
Known as the Modular Building System or Formwork Panels, the new technology is touted to be capable of bringing down construction cost by 26 percent and, according to Ross Worley, the CEO of Wall-Ties & Forms Inc (WTF), the technology also increases construction speed significantly, delivering houses in 60—90 days.
The building industry in the country had seen many building systems that are yet to make the desired impact such as reducing the cost and speed of construction that could bring down house prices and ultimately bridge the gap between housing demand and supply.
Some of the earlier systems in the market include the Structurcasa Modular System by the US-based Structuracasa International LLC, Moladi Modular System by Moladi Nigeria Limited, Prefab Green Homes by Vitapur Nigeria Limited, the Mundoscrete Pre-stressed T Beam and Block flooring system by Mundostrade Limited, DamDem building system by Olumide Olusanya, etc.
Hakeem Oguniran, the managing director of UAC Property Development Company (UPDC) Plc observed at the launch of one of such systems that, of the three vital components of housing delivery , only alternative building system has not been addressed by government, while the other two—finance and titling—have, hence any private sector initiative on building systems has to be commended.
“This is the future of the building industry and also the only hope for affordable housing in Nigeria”, Johnson Chukwuma, a structural engineer, said.
Worley, whose company invented the Formwork System, was in Nigeria recently to perfect a partnership deal with Alpha Mead Development Company (AMDC) which is bringing the technology into Nigeria and is already deploying it in the development of its Lekki Pearl Estate—a mid-income community comprising 112 affordable housing units located in Lagos.
He explained to BusinessDay that “the Modular Building System is an old technology that has been in use in many countries of the world such as Brazil, Singapore and 45 other countries” where his company has produced and shipped over 30 million ties and 200,000 aluminum concrete to.
AMDC is assuring home-seekers, especially those in the middle income class, of affordable deals in the housing market going forward, disclosing that whereas a typical three-bedroom apartment costs about N10,445,522.15 to construct in about 180 days, using the conventional system, it costs about N8,234,877 and takes 90 days to construct the same size apartment using the formwork system, thus saving about 26 percent of the construction cost which leads to lower home prices.
“We are not just driving down cost of owning quality homes, our focus is also to lower the market entry barriers for home buyers through the use of this technology that can help eliminate waste that would have been built into the construction cost”, Damola Akindolire, AMDC’s general manager, assured.
“Our units are quite affordable, but affordability for us doesn’t mean cheapness; we must compare apple with apple, meaning that if you compare the price of our development with others of the same quality, those who buy from us will be saving about 20-26 percent of the market price”, he added.
According to him, the Formworks Panels have the capacity to eliminate waste and save time, adding that they could build a house in about seven days with an average of six – 10 workers, meaning that they could also save the cost of paying workers for about 50 days if conventional system had been used.
By deploying this technology, Femi Akintunde, AMFacilities MD/CEO, said “ AMDC has been able to lower the entry level for middle-income home buyers from the current market average of N6 million to as low as N250, 000 monthly, without any initial large deposit or collateral.
“We want to help middle income Nigerians who are unable to raise the large capitals most developers demand as deposit, or are unable to build due to the large capital involved”, he added, disclosing that given the high construction speed of this new technology, the company aims to deliver 10,000 housing units in the next five years.
BusinessDay checks reveal that in highbrow locations such as Lekki and Victoria Island in Lagos, three-bedroom apartments sell for N72 million and N150 million per unit, respectively, while four-bedroom detached houses in those same locations go for N135 million and N450 million respectively.