‘M’East crisis impacting real estate sector’
Experts have warned that the ongoing U.S.–Iran conflict is beginning to weigh on Nigeria’s construction and real estate sectors, reshaping cost structures and altering the economic outlook for the year.
Experts have warned that the ongoing U.S.–Iran conflict is beginning to weigh on Nigeria’s construction and real estate sectors, reshaping cost structures and altering the economic outlook for the year.
In separate interviews with The Nation, industry stakeholders said the crisis is introducing new risks while also creating potential opportunities tied to higher oil revenues.
The conflict escalated in February 2026 following U.S.–Israeli airstrikes on Iranian military leaders and nuclear facilities. Iran’s subsequent closure of the Strait of Hormuz triggered a global oil shock, exposing Nigeria to a mix of macroeconomic pressures and gains. While higher oil prices have strengthened government revenues, they have also intensified cost pressures across oil-linked sectors, particularly construction and real estate.
Speaking on the development, the Chief Executive, CutStruct, John Oamen, explained that the impact on Nigeria’s construction supply chain has so far been indirect but increasingly significant.
“Tensions around the Strait of Hormuz have had a limited direct impact on Nigeria’s construction supply chain so far, but are increasing indirect risk exposure. While most Nigeria-bound shipments do not rely exclusively on Hormuz routes, instability in the corridor is already feeding into higher freight costs and rising insurance premiums, particularly through war-risk surcharges. “The market is also experiencing minor shipment delays as global carriers adopt more cautious routing strategies. Although these disruptions have not yet materially constrained supply, they are increasing volatility in logistics costs and delivery timelines, ultimately driving up project costs and extending completion schedules across the real estate sector,” he said.
According to him, the rising cost environment is also affecting property operations.
The Chief Investment Officer, AXA Mansard, Taiye Owonumi, described the overall economic impact as mixed but broadly positive. “The impact on the economy has been mixed but net-positive for Nigeria. The positive is that the closure of Hormuz, which resulted in higher oil prices, benefited Nigeria’s status as an oil exporter; higher prices translate directly into above-budget FAAC revenues and FX inflows,” she said.
However, she also pointed to emerging fiscal concerns. Despite improved oil revenues, which have inspired the Federal Government to revise its borrowing target upward to ₦29.20 trillion, an increase of ₦11.31 trillion from the initial proposal submitted in December 2025, she indicated that this raises questions about fiscal management, particularly why borrowing is rising alongside increased oil earnings.
Meanwhile, the domestic cost of energy has surged sharply, adding further strain to the real estate sector. Fuel pump prices rose from ₦840 per litre in February to over ₦1,200 per litre in March, representing an increase of more than 30 per cent within a month. This spike has reduced petrol consumption, which fell from 56.9 million litres per day in February to 47.3 million litres per day in March, according to data from the Nigerian Midstream and Downstream Petroleum Regulatory Authority.
Diesel prices have also climbed significantly, rising from about ₦1,300 per litre in January to over ₦1,700 in April, depending on location. The increase has pushed up transportation costs for building materials, placing additional financial pressure on developers. As a result, profit margins are being squeezed, while property prices are likely to rise as developers pass on higher costs to buyers and tenants.
