How Technology Is Reshaping Real Estate In Nigeria

The year 2021 has been projected by several market experts to be solid for Nigeria's real estate market, as the world's second-leading destination for top real estate investment was hit hard by the coronavirus in 2020.

As one of Africa’s fastest-growing economy and a robust population, Nigeria is one of the most attractive market for retail property. Private equity funds have been active in this space in Nigeria for several years but prices remain high.

With several investors now eager to move their cash into the country's multi-billion dollar sector, it is important to understand certain pressing challenges and see how property tech, which solves these problems, might be a worthy alternative bet.

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The coronavirus pandemic birthed a lasting disruption in the order of things people were previously used to, as the need to stay at home forced many into seeking alternative means of productivity, paving the way for the country's budding tech sector to move from flame to inferno in a short while.

Among the several tech startups that have brought both promise and value to Nigerians and even Africa at, large, PropTechs have also begun to find a solid footing in Nigeria's real estate space, as their general purpose is to solve problems mainstream sector has been embattled with, making business easier for sellers and giving consumers a more satiable experience.

With the increasing need for residential apartments and shrinkage in need for office spaces fostered by the pandemic, home concierge services have become a growing need, which the mainstream has not been able to effectively deliver. Proptech startups such as Eden Life and Fichaya are now making it easier for people to stay indoors, as they no longer have to bother about chores clawing on their productivity. Real estate owners should consider making tech-based concierge services available to clients as "bonuses", as a large percentage of home seekers today are young professionals.

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Nigeria's housing sector has also been embattled with rigid payment systems, as most landlords do not welcome the idea of monthly payments from tenants, thereby restricting the available market to people with immediate access to lump sums of money. However, proptechs such as Kwaba, Spleet, and LiveIzy among others have ecosystems that provide customers with flexible financing plans, thereby broadening the potential markets.

In like fashion, flexible payments are commonplace in the hospitality section, with hotels charging strictly for full days (nights), whereas, several customers only need a place to stay for a few hours. Charges, therefore, seem bloated, as these clients know they will not be full beneficiaries of the value they pay for. Quartered was launched to counter this problem by enabling guests to book hotels for 4, 8, 12, and 24 hours and choose their check-in time as opposed to booking hotels for a whole day.

More proptechs are springing up to close the value gaps in Nigeria's highly-promising real estate sector, and several only handicapped by funding. According to a report by Fool, proptech startups had a worldwide shortfall of 25 percent last year due to the pandemic. What that could imply for investors is a better position for early bargains on these disruptive innovations that are on the rise.