Report: Housing supply shrinks as cement prices jump 367% in 7 years

NIGERIA’S housing supply is tightening as escalating construction costs continue to weigh on the real estate sector, according to PropComms Africa, a real estate intelligence and media platform.

In its March report entitled ‘Build Cost, Broken Market,’ the firm revealed that the price of a 50kg bag of cement, a key building material, has surged from between N2,500 and N3,000 in 2019 to as high as N11,500–N15,000 by March 2026.

This sharp rise translates to an increase of up to 367 percent over 7 years, including a 30 percent spike recorded within the first quarter (Q1) of 2026 alone.

Beyond cement, other construction inputs have also seen notable price increases. Steel has climbed by about 20 percent, sharp sand by 25 percent, while iron rods have risen by more than 120 percent during certain periods.

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The report noted that these rising costs are already disrupting the housing market, with developers abandoning projects, revising budgets, and scaling back supply despite Nigeria’s estimated housing deficit of 28 million units.

It further highlighted the broader impact on households, noting that rents in urban areas have more than doubled, while homeownership is becoming increasingly unattainable for low- and middle-income earners.

According to PropComms Africa, the cement market is dominated by 3 major producers – Dangote Cement, BUA Cement, and Lafarge Africa – which together control more than 95 percent of domestic supply.

Before 2020, cement prices remained relatively stable at N2,500 to N3,000 per bag, supported by competition, capacity expansion, and periodic government interventions.

However, following the COVID-19 pandemic, increased construction demand outpaced supply, pushing prices to between N3,300 and N3,500 by 2021, about 33 percent higher than pre-pandemic levels.

The report added that after stabilising around N10,500 in the fourth quarter (Q4) of 2025, prices resumed an upward trend in early 2026. Manufacturers increased prices by N500 per bag in January following new tax measures, with market surveys across Lagos, Abuja, Ogun, and parts of the South-East placing prices between N11,500 and N15,000 by March.

While producers have blamed rising costs on factors such as energy prices, foreign exchange (FX) volatility, logistics challenges, and multiple taxes, the report argued that these reasons do not fully justify current price levels.

Instead, it pointed to limited competition and high market concentration as key drivers of sustained price increases.

Despite Nigeria’s cement production capacity of about 65 million metric tonnes, far exceeding the estimated annual consumption of 32 million tonnes, prices have continued to climb.

To address the imbalance, PropComms Africa called for structural reforms aimed at boosting competition in the sector.

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Recommendations include improving access to limestone deposits through transparent licensing to attract new entrants, and separating manufacturing from distribution channels to prevent dominant firms from restricting market access.

The firm also urged the Federal Competition and Consumer Protection Commission (FCCPC) to intensify antitrust enforcement by probing pricing practices and market behaviour within the industry.

Earlier this month, on March 12, the FCCPC confirmed it had launched an investigation into cement pricing nationwide following the submission of a report, with a dedicated team already set up to handle the probe.