Building Material Cost Escalation and Residential Development Viability in Nigeria

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@article{1724106,
      author = {Agbonselobhor Osaze Akhere},
      title = {Building Material Cost Escalation and Residential Development Viability in Nigeria },
      journal = {Iconic Research And Engineering Journals},
      year = {2026},
      volume = {10},
      number = {4},
      pages = {2676-2694},
      issn = {2456-8880},
      url = {https://www.irejournals.com/formatedpaper/1724106.pdf},
      abstract = {This paper develops a context-sensitive conceptual framework to explain how building material price escalation affects the feasibility and financial viability of formal residential property development in Nigeria. It addresses the gap between studies documenting material cost pressures and appraisal research translating costs, revenues, development timelines, and required returns into investment decisions. The study adopts an integrative critical synthesis of Nigerian research on material costs and development uncertainty, international literature, and professional guidance on residual valuation, cash flow appraisal, and conceptual framework development. The review is selective rather than a registered systematic review.
The framework proposes that the effects of material price shocks depend on outstanding procurement requirements, expenditure timing, land acquisition status, revenue flexibility, procurement arrangements, and financing conditions. It distinguishes residual land value, representing the maximum land payment a scheme can support, from the remaining development surplus available to developers who have already acquired land. By integrating material cost exposure, appraisal outcomes, and conditional adjustment mechanisms, the framework establishes a unified transmission model and derives five propositions for empirical testing.
The framework supports developers, valuers and lenders in conducting scenario analyses, disclosing appraisal assumptions, and distinguishing liquidity pressures from underlying economic viability. As a conceptual study, it reports no original empirical estimates. Future research should test the framework using project appraisals, procurement records, material price histories, and financing cash flow data.},
      keywords = {building material cost; residential development; development viability; residual land value; investment uncertainty},
      month = {October},
      doi = {https://doi.org/10.64388/IREV10I4-1724106}
  }