As property technology (proptech) space is progressing at snail’s speed, stakeholders have called on operatives to sponsor a bill in the National Assembly, which will help them overcome legal and regulatory obstacles to the adoption of new technologies in the real estate sector.
They agreed that proptech could significantly lower investment barriers, cut costs related to real estate transactions and improve real estate liquidity, but legal and regulatory obstacles may mar the adoption of new technologies in real estate.
Leading the call, the Central Bank of Nigeria (CBN) Director, Financial Systems Strategy (FSS) 2020, Mr. Ibrahim Umar Hassan, who spoke at a two-day event tagged ‘NIPROPTECH,’ organised by Roland Igbinoba Foundation for Housing and Urban Development in collaboration with Nigeria Proptech Association, said the conference is apt and urged the association to propose and lobby for a law to regulate the property technology market.
Hassan, who was represented by the Head, Mortgage, FSS 2020, Kris Muo, said Nigeria has to catch up with technological development in countries like India. “Our environment is a peculiar one and there is a need for a legal framework to be in place to boost the confidence of investors,” he said.
He added: “This issue of housing has gone beyond the brick and mortar, the essence of this initiative is to use technology as a platform to provide housing needs of the people, ensure that the deficiency in Nigeria, which is about 21 million for the middle class is bridged.
“There is a need to ensure the appropriate mechanism is put in place to ensure confidence and trust of buyers on where they are putting their money and what they paid for is archived. Whatever we doing should be for the growth and development of the properties and technology in Nigeria.”
Proptech is growing rapidly in market size and it is making a compelling case for the transformation of real estate across the globe. The global real estate technology market size was estimated at $11.7 billion in 2022 and is projected to grow at a compound yearly growth rate of 12.5 per cent to reach $23.79 billion by 2027.
The value of investments in the global proptech industry is expected to grow by an average of 5.2 per cent to exceed $85 trillion over the next 20 years (2022-2050).
Globally, there are now more than 6,000 proptech startups and statistics show that investment in that area increased from $2 billion in 2013 to $18 billion in 2018. Proptech startups also raised $18.7 billion across 598 deals between 2017 and 2019, with the number of transactions increasing by 33 per cent from 187 in 2017 to 250 in 2019.
In the first quarter of 2022 venture capitalists invested $1 billion in proptech, which is a 41per cent jump from Q4, 2021.
Specifically, the event attracted proptech enthusiasts, property developers, building materials manufacturers, local and foreign experts, as well as regulators. It also brought the real estate and proptech community to engage with leading startups, hear insights, and focused on major challenges and opportunities in the industry.
The Founder, Pison Housing Company & President, of Nigeria Proptech Association, Dr. Roland Igbinoba, stressed that proptech will not increase the supply of housing, but it will shore up housing accessibility by optimising the existing housing stocks.
According to him, proptech is gaining traction globally and stakeholders are going to see the scale-up of many African proptech startups in the next two-five years, once these startups are able to pilot, adding that startups are now looking beyond low-tech property search.
“There are bigger opportunities, as proptech is tackling property verification, construction optimisation and costs, rent financing, co-living, property and facility management, tenant experience, blockchain, virtual reality, big data, artificial intelligence, 3D printing are tools that can solve our housing problem at scale.
Nigeria’s proptech startups are also seeing some growth in the market. “As of 2021, startups in the space have secured over $ 2 million in investments. There are over 70 active proptech startups alone according to proptech Nigeria survey.”
Vice Chairman, Eko Atlantic City, Mr. Ronald Chagoury, represented by Head of Communications, South Energyx Development FZE, Joanna Fabikun, said proptech bridges the gap between technology innovation and the real estate sector.
“It improves the way we buy, rent, sell, design, construct and manage property. Proptech is key to unlocking a new African era and at the heart of that is Nigeria, with approximately 90 active tech hubs making it the largest in Africa,” she said.
She said Nigeria faces several unique problems that make a green/tech agenda difficult, but the public and private sector’s use of green city concepts and technology is crucial for raising the quality of life in the country.
Fabikun said: “Eko Atlantic’s infrastructure network makes it the most technically-advanced city in Nigeria. Planning regulations ensure the use of environmentally friendly and energy-efficient materials throughout the city.
“We are implementing efficient waste disposal systems to prevent urban decay. Additionally, cutting down on building energy and water consumption, which will lower greenhouse gas emissions,” she added.
The Chief Executive Officer, Oct5 Real Estate, Mr Jide Odusolu, said the size of the market in Nigeria is about $77 million with a minimum of three million people, who are underserved.
He added that the challenges facing property developers are infrastructure and the high cost of money, which impede development processes.