PROPTECH AS THE KEY TO UNLOCKING NIGERIA’S REAL ESTATE MARKET.
As confidence is slowly returning to the Nigerian Economy, a key beneficiary has been the real estate sector due to its potential to provide a hedge against inflation and the impact of devaluation. the aftermath of the COVID 19 pandemic and its forced changes in work-life routine has also increased the attention to the real estate industry which is likely to experience fundamental shifts that will transform the operating landscape in the near and long term.
Data from the Nigerian Bureau of Statistics (NBS) indicates that the Real Estate Sector, grew by 1.77% in Q1 2021 from 2.81% in Q4 2020 and -4.75% in Q1 2020. This can be attributed to the resumption of residential and commercial projects abandoned during the COVID 19 lockdown, and the full reopening of the economy.
Across the real estate industry, the pandemic shut-in triggered increased deployment of digital solutions across all areas of the real estate sector from property listing portals, virtual tours, co-living applications, property management solutions, and data analytics. The adoption of work-from-home (WFH) policies has triggered the need for smart homes with strong WIFI and purpose-designed spaces for working from home. We foresee increasing virtualization of work and digitization of homes becoming the new normal.
Property Technology or PropTech is the application of technology to create and deliver innovative real estate products and services to a wide range of users. PROPTECH has the potential to trigger the same or high transformative impact as both Telecoms and FINTECH which revolutionized the entertainment, financial services, and digital marketing sectors in Nigeria. TECH is the new oil and real estate will be one of the key beneficiaries.
The deployment of technology will make the Nigerian real estate sector more transparent, enable increased liquidity through access to flexible credit; reduce fraud through increased title integrity and aggregate demand to drive greater homeownership and use of property as a tradeable asset; bypassing the current bureaucratic bottlenecks.
We believe that the same way GSM Technology created a leap-frog impact, PROPTECH would equally do the same for the real estate sector.
The emergence of data analytics companies such as Estate Intel and North court has already reduced the opacity of information; the use of blockchain will unlock titling constraints. The emergence of listing portals has reduced the reliance on uncredited brokers and the creation of demand aggregator platforms such as STOW will simplify the acquisition of new-build and off-plan homes.
With a population exceeding 200 Million People and an adult population estimated at 100Million, Nigeria remains a huge and unrealized market with 70% of GDP generated in the informal sector and urbanization rate standing at 50%.
As earlier noted, critical factors needed to unlock the market include effective data aggregation; transparent processes; increased efficiency; quality standards and a simplified credit system. These are the key objectives of demand aggregators and the reason we created STOW.
“We foresee a time when people own and trade property with greater ease than presently enjoyed in the western world”
we aim to provide a transparent and secure marketplace for real estate investment opportunities and encourage a property investment culture in Nigeria. In an inflationary environment, a primary safe harbour for preserving wealth and building savings that retain value is secured investment. Sound real estate investments in areas with strong promise constitute one of the best examples of such investments. Anyone can become a property investor and we will over the next weeks share ideas on how to make this a reality.