THE EFFECTS OF RISING COST OF BUILDING MATERIAL ON PROPERTY DEVELOPMENT

Project Abstract

The construction industry plays a crucial role in the development of properties, providing essential infrastructure for residential, commercial, and industrial purposes. However, the rising cost of building materials has become a significant challenge impacting property development projects worldwide. This research delves into the effects of the escalating prices of building materials on property development, analyzing the various factors contributing to this trend and exploring its implications on the industry. The study employs a mixed-methods approach, combining quantitative data analysis with qualitative insights from industry experts and stakeholders. Quantitative analysis involves examining historical trends in building material costs, inflation rates, and construction project budgets to understand the extent of the impact on property development. Qualitative data collection includes interviews and surveys with developers, contractors, suppliers, and policymakers to gather perspectives on the challenges posed by rising material costs. Findings from the research reveal that the increasing prices of building materials have a multifaceted impact on property development projects. Firstly, higher material costs lead to inflated construction budgets, affecting the feasibility and profitability of developments. Developers are forced to either absorb the additional expenses, resulting in reduced profit margins, or pass on the costs to buyers or tenants, potentially pricing out certain market segments. Moreover, the volatility in material prices introduces uncertainty and risk into project planning and execution. Fluctuations in costs can disrupt project timelines, leading to delays and cost overruns. This instability poses challenges for developers in accurately forecasting project expenses and securing financing, impacting overall project viability. Additionally, the research highlights the implications of rising material costs on sustainability initiatives within the construction industry. Higher costs may deter investment in energy-efficient technologies and environmentally friendly building practices, hindering progress towards sustainable development goals. In conclusion, the effects of the rising cost of building materials on property development are significant and far-reaching. Addressing these challenges requires a multi-faceted approach involving collaboration between industry stakeholders, policymakers, and financial institutions. Strategies to mitigate the impact of escalating material prices include fostering innovation in material sourcing, improving supply chain resilience, and incentivizing sustainable construction practices. By understanding the implications of rising material costs and implementing targeted interventions, the property development sector can navigate these challenges and foster sustainable growth in the built environment.

Project Overview

<p> </p><h3><strong>INTRODUCTION</strong></h3><h3><strong>1.1 BACKGROUND TO THE STUDY</strong></h3><p>The construction industry in Nigeria is upcoming industry; the sector is regarded as a catalyst for growth while its performance serves as an indicator of the nations economy (Akanni et al.,2014). It us supported by the association of construction players, which encompasses developers, contractors, building material and equipment suppliers, manufacturers, financiers, regulators and others in the value chain. Building material have been playing an important role in the construction industry. They are those materials put together in erecting or constructing structures, no field of engineering is conceivable without their use (Akanni, 2006; Udisen and Akanni, 2010). Building materials contribute immensely to the quality and cost of housing, from what is used in the foundation to the materials for roofing and finishes, while the building material industry us an important contributor to the national economy of any nation as its output governs both the rate and the quality of construction work.</p><p>The cost of building materials poses a significant threat to both the construction industry and people aspiring to own houses (Anosike, 2009; Mekson, 2008; Mohammed, 2008; Njoku, 2007). For example a bag of cement is valued at N1350 in 2006 goes as high as N1850 in 2009 (Anosike,2009) depicting about 37% increment; the bag goes as high as N2000 in 2012 during peak season (Field survey 2012). Supporting this view, Jagboro and Owoeye (2004) earlier established that increase in prices of building materials has multiplier effects on the industry while Idoro and Jolaiya (2010) affirmed that many projects were not completed on time due to the cost of materials, which have been on the increase. Besides timely completion, high prices of building materials form a crucial constraint to improving housing conditions in the low income earning countries, Nigeria inclusive (United Nations Center for Human Settlement (UNCHS),1993).</p><p><strong>1.2 STATEMENT OF THE PROBLEM</strong></p><p>Inspire of the past studies on the cost of building materials in Nigerua , little us publicized about the effects of the rise in cost on property development; most literature (Jagboro and Owoeye,2004; Meckson,2008; Njoku,2007; Oladipo and Oni,2012) has concentrated on identifying the causes with little emphasis on the implications, hence, the research seeks to provide information on effects of the rising cost of building material by examining its influence on property development.</p><p><strong>1.3 OBJECTIVES OF THE STUDY</strong></p><p>The major objective of the study is the effects of rising cost of building materials on property development.</p><p><strong>1.4 RESEARCH QUESTIONS</strong></p><p>(1) What are Building Material?</p><p>(2) what is property development?</p><p>(3) what are the factors that can increase cost of building materials?</p><p><strong>1.5 SIGNIFICANCE OF THE QUESTIONS</strong></p><p>This study gives a clear insight into the effects of rising cost of building materials on property development. The study also produces results that corroborate the Fo dings of a great deal of the previous work in this field.</p><p><strong>1.6 SCOPE OF THE STUDY</strong></p><p>The research focuses on the effect of rising cost of building materials on property development.</p><p><strong>REFERENCES</strong></p><p>Akanni, P.O (2006). Small Scale Building material Productionin the context of the informal economy. The professional Builders, Pp13-18.</p><p>Akanni, P.O, One, E.A, Akpomiemie, O.A (2014). Impact of Environmental Factors on building project performance in Delta Star, Nigeria. HBRC Journal. Advance online publication.</p><p>Anosike, P. (2009). Nigerian groans under high cost of building Material. The daily Sun, pp 38-39.</p><p>Idoro, G.I. and Jolaiya, O.(2010). Evaluating material storage strategies and their relationship with construction project performance. Proceedings of CIB International Conference on Building Education and Research University of Cape Town (Pp. 103-113).</p><p>Jagboro, G.O, and Owoeye, C.O. (2004). A model for predicting the prices of building materials using the exchange rate in Nigeria. The Malaysian surveyor, 5(6), 9-14.</p><p>Mekson, j. (2008). Prices change of building materials in developing Communities in Nigeria. The professional Builders, Pp.21-27.</p><p>Mohammed, H.Y (2008). Nigeria: Builders groan on rising cost of building materials. Daily Trust, P. 29</p><p>Njoku, J. (2007). Grappling with escalating cost of construction materials. The vanguard, pp.36-37.</p><p>Udosen, J.U, and Akanni, P.O (2010). A factorial analysis of building material wastage associated with construction projects. Journal of Civil and Environmental systems Engineering 11(2), 81-90.</p><p>United Nations Center for Human Settlement. (1993). Building materials for housing. An appropriate intermediate, cost effective building materials, technology and transfer mechanism for housing delivery</p> <br><p></p>