For years, technology has served as the bedrock of many businesses, regardless of what field they relate to.
Startups are thinking outside the box and providing solutions to problems related to health, finances, retail, agriculture, education and real estate is no exception as well.
There is no doubt that the real estate industry in Nigeria is making headway, with its achievement largely attributed to the population growth of the nation. Real estate is termed as real property that includes land and anything permanently attached to it, whether natural or man-made.
Although records indicate that the real estate industry used to be the fifth-largest contributor to the country’s economic growth with 70% of GDP generated in the informal sector and urbanization rate standing at 50%, its contribution still fluctuates because of certain challenges the industry faces.
Challenges like land registration processes, high-cost property development, taxations, ineffective property protection laws amongst others.
However, real estate has begun to meet rental demands and provide property development solutions through rising technology known as Proptech.
So, what is Proptech?
Proptech is still relatively new to the market. It is a term which refers to ‘Property Technology’. It is a small part of a wider digital transformation in the real estate and property industry.
Proptech can simply be defined as the application of technology to create and deliver innovative real estate products and services to a wide range of users.
Countries such as the UK, China, the US, Japan, Korea have adopted this new innovation and are reaping from its accomplishments.
Property technology is thriving in highly populated areas, due to the fact that from time to time, people tend to move from one geographical location to another, mostly from rural to urban areas, once their standard of living improves.
What is Proptech in Nigeria Like Today?
Startups have a competitive advantage compared to traditional businesses because of their ability to incorporate innovation into each step of the developmental process, as well as radically rethink existing systems.
Just like Fintech, Healthtech, Edtech, Agrotech that is accomplishing so much in terms of innovation, Proptech is pushing the boundaries of intense ideas in the real estate industry.
The Proptech market in Nigeria is rising speedily and our companies are gradually making headway to international borders.
Since 2016, the aforementioned companies have cumulatively raised over $50 million in pre-seed and seed funds.
Per Danbel Property and Investments, a real estate sales and advisory company, Nigeria has 72 proptech companies. CRESTHUB however cannot independently confirm these numbers but will update you as soon as possible.
These startups provide services from property listings to short stays, investment and financing, data and analytics, flexible living and property and community management.
Property technology in Nigeria so far has established itself mainly in private property-listing websites and rental payments. They are predominantly operational in Lagos.
The Next Phase
Against the many economic crises the country has faced, property technology is viable to stay a helpful tool. In many ways, Proptech and Fintech (Financial Technology) are very similar because it’s innovation is headed by Artificial Intelligence.
Technology is what helps keep the real estate industry on its toes, therefore, for Proptech companies to maintain efficient and rapid growth, certain standards are expected of them like experimenting in new tactics and bold ideas, investing in the latest tools and technology, keeping up with industrial revolution, effective software competition, flexibility and so much more.
Property technology companies aim to provide a transparent and secure marketplace for real estate investment. They also encourage property investment culture in the country, nevertheless, these Nigerian companies still need to maintain high game in order to compete with current international standards.
However, the Proptech sector looks quite promising for further development in Nigeria.