Estate developers in Nigeria are facing mounting challenges in meeting project deadlines due to surging exchange rates.
This predicament is compounded for those with contracts featuring variation clauses, resulting in significant losses amid escalating building material costs. The ripple effect extends to homeowners, struggling to complete properties amidst soaring expenses.
Speaking anonymously to Naijakiosk, a developer lamented, “I’ve had no choice but to abandon the project because the costs are just too high to bear.” Many buyers are unable to afford the increased prices, halting projects indefinitely.
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Mr. Wale, a homeowner, revealed, “The cost to furnish the house is nearly half of what I paid to acquire it,” prompting him to consider selling the property.
To adapt, property sellers are pegging values to the fluctuating dollar, yet sales remain sluggish. A developer explained, “My strategy has been to adjust my prices by the dollar rate and sell whenever a willing buyer comes along.”
The FX crisis has deterred Nigerians abroad from investing in real estate back home. Mike Uzoma, disillusioned by diminishing returns, shared, “Given the worsening situation, I’ve decided to sell the asset.”
Meanwhile, stable economies like Dubai attract diaspora Nigerians seeking predictability.
Beyond investments, prolonged power outages plague estate residents, exacerbating security concerns. Rising poverty and hunger correlate with increased insecurity, prompting a rise in estate dues and service charges, sparking tension.
As the cost of goods and services continues to surge, the quality and standards of building materials face potential threats as developers seek ways to deliver projects on time and within budget.