Assessment of the Price Variation of Building Materials for Housing Development in North Central Nigeria

Abstract

High cost of building materials has long been recognized as impediment to housing delivery and affordability in most developing countries. Its manifestation is further evident in significant variations in proportions of materials and labour costs in the procurement process of construction elements of building projects. This study employs an informal procurement/pricing process to determine the variation in total price of standardized retail and bulk building materials for housing development in Lokoja and Minna (both in the North Central Nigeria). A market survey of 12 selected building materials for the construction of 2 and 3 bedroom flats was conducted on 214 major distributors and 226 wholesalers and retailers of the building materials in the two study areas. Findings from this present study provide evidence that differences in retail and bulk prices of building materials do not vary significantly across geographical locations. However, property type alone accounts for 89% of the variance in the retail and bulk price of building materials. A plausible explanation for the significant effect of property type is that the prices of building materials seemingly compensate for the additional or extra bedroom or other extra housing attributes resulting from housing units of different size. The results of the empirical analysis further provide evidence that the type of purchase, geographical location and property type do not depend on the effect of the other in influencing the price of building materials for housing development, even at an intra-urban scale.