Empirical Investigation of the Role of Building Material Prices on Housing Affordability in South West Nigeria

Building material price volatility is widely cited as a major driver of housing unaffordability in Nigeria, but its specific empirical impact on housing affordability across South West Nigerian states has not been rigorously quantified. This study empirically investigated the relationship between building material price fluctuations and housing affordability in Lagos, Ogun, and Oyo States for the period 2018 to 2023. Building material price data (cement, sand, granite, iron rods, and sandcrete blocks) were compiled from quarterly price surveys conducted by the Niger Delta Development Commission and the National Bureau of Statistics. Housing affordability was measured by the housing price-to-income ratio and the housing cost-to-income ratio for three income groups: low, middle, and high income. Cross-sectional time series regression was used to quantify the price-affordability relationship. Results showed that cement price increases had the strongest impact on housing affordability, with a 10% increase in cement price associated with a 4.2% deterioration in the housing price-to-income ratio (p < 0.001). Iron rod price volatility had the second-largest impact, explaining 18.3% of variance in the housing cost-to-income ratio for formal sector housing. Low-income households were disproportionately affected, with a mean housing cost-to-income ratio of 68% during peak material price periods (2022 to 2023). The study provides the first time-series empirical analysis of building material prices and housing affordability in South West Nigeria, informing targeted policy intervention in cement pricing and import duty frameworks. Keywords: building material prices, housing affordability, South West Nigeria, housing cost, cement prices