As science and technology drive innovation in all spheres of human endeavor at a sprinter pace, EDIDIONG IKPOTO examines how real estate tech companies are scaling the real estate market

Over the years, the Nigerian real estate industry has seen its fair share of evolution and paradigm shift that has come with the unwavering human quest to find solutions and better alternatives to human problems.

One of the main means by which man has discovered this panacea is through technology.

With the advent of civilization and new trends in science and technology, there is an increasing need for real estate professionals and their clients to do business in a much more transparent way, which removes the barriers that once stood in the way to effectiveness and efficiency.

As a result, real estate technology companies, commonly referred to as proptechs, have started to emerge. Experts believe that proptech had already begun to appear in the United States in the early 1980s, although the nomenclature used today had not yet been invented at the time. In Nigeria, the first proptech company is believed to have emerged only in 2018.

Another breed of analysts is of the opinion that proptechs emerged in the late 1990s during the “dot-com boom”. However, today it is present in 64 countries around the world, with a growing number of innovation-driven real estate technology companies estimated at 8,000, according to PropTech Global Trends 2020.

As the name suggests, proptechs are real estate companies that use technology and software to meet today’s real estate needs. For the office sector in particular, this can mean everything from digitally facilitating unique workplace experiences to providing advanced data and analytics capabilities for real-time feedback, to helping real estate teams buy, sell and manage their assets.

Globally, the United States holds the lion’s share of real estate technology companies, accounting for 59.7% of the global market. Continental Europe (27.2%) comes next with proptech UK as the largest market outside the US. The Asian proptech real estate industry (3.5%) is dominated by China.

Traditionally, companies in this category provide services such as real estate search platforms (ads and marketplaces, real estate agent tools, etc.), property sales tools, financing tools (digital lenders and brokers , alternative financing, etc.), mortgage software (loan application and management), mortgage closing tools (insurance, transaction management tools), mortgage management tools (IoT-powered tools), loan management (loan securitization, etc.).

According to Ascendix, a real estate research group, proptech brings together all the technological tools used by real estate experts to optimize the way people buy, sell, research, market and manage properties. These innovative technologies are sometimes called real estate technology, retech or realtech; and they signify the solid alignment between real estate and technology.

The ultimate goal is to make everything about owning, renting or working in buildings unique, easier and more efficient.

This also means that it is not only for those who own and manage real estate, but also for people who rent and work inside the buildings. For the office worker, having an app for their building is becoming more of a necessity every day, enabling them to perform an array of functions – from mobile key cards to ordering food, to checking in visitors and beyond. Instead of needing several different apps to make life more efficient, the goal is to integrate everything into one central building app on tenant smartphones. This creates a customer-facing “remote control” for buildings.

The first point that analysts have identified as a unique feature of proptechs is the better analysis they provide. Real estate professionals can paint a more vivid picture of future property risks and opportunities based on geography and other variables. Proptech Big Data Analytics enables unprecedented granularity of research, which otherwise might not have been available.

There is also the element of accurate property appraisals. Real estate tech startups can already predict real estate prices over a period of x years based on large datasets. To illustrate, a similar approach combining a large database of traditional and non-traditional data was used to predict 3-year rent per square foot for multi-family buildings in Seattle. The accuracy of the forecasts was over 90%, according to McKinsey.

Improved prospecting, marketing, and door-to-door sales are other benefits provided by proptechs. Proptech Big Data can also improve the marketing of properties. Proptech real estate agents can benefit from big data analytics tools to refine their audience and target buyers and deliver better deals.

Proptechs are also driving data-driven real estate development. The application of big data to residential development is another example of how technology has changed the real estate industry. Granular data analysis helps tech-conscious property developers predict where a new building is best placed and what amenities would suit potential residents.

Proptech big data can also become the key point of view to create clear predictive analyzes of the risks of investing in certain buildings and projects.

Additionally, with big data analytics in place, proptech real estate agents and other professionals are assured that all data is structured into clear datasets and nothing slips through the cracks. Additionally, real estate tech startups no longer spend time and money on manual effort.

In Nigeria today, the real estate industry has been no stranger to the digital technology revolution, and there are now several proptech startups offering technology-driven solutions for its burgeoning customer base. From online real estate marketplaces to companies providing clients with analysis of real estate data, these establishments are reshaping the real estate industry and ushering in a future that will be filled with a vast array of possibilities.

Some of the most popular proptechs in Nigeria are: Rent Small Small, PropertyPro, Hutbay, Property Deal Zone, Estate Intel, Fiber and Coreum.

According to one Olamide, a verified real estate agent on PropertyPro, the rise of proptechs resulted from its ability to create a virtual platform that allowed real estate professionals and their clients to transact without the barriers that previously made heavy and sluggish transactions. .

Olamide’s assertion was adapted from the words of erstwhile journalist Marshall McLuhan, who used the term “global village” in 1964 to describe the phenomenon of global culture shrinking and expanding at the same time in because of ubiquitous technological advances that enable instant sharing. of culture.

According to the expert, while Nigeria has seen successes in this field in recent years, there is still a long way to go to reach the levels achieved by the United States and other advanced civilizations.

Olamide said: “My job has become much easier thanks to the options offered by my platform. When I started this job about 11 years ago, it was not easy to communicate certain things with clients. I had to do a lot of things manually. I remember many times, whenever I traveled, some clients would call me for an inspection and I had to cut my trip short just to take care of them. Nowadays, most of our inspections can be done remotely, except on special occasions.

“Customers also find the platform very useful. As you know, here in Lagos, the estate agents charge an inspection fee for every physical inspection. Now, all they have to do is access the platform and check the available offers. If it’s not good for them, they don’t have to spend money on a physical inspection.

Another licensed real estate agent on one of Nigeria’s largest proptechs, Samuel, described the proptech sub-sector as a game changer in the property industry. According to him, the sub-sector has paved the way for practitioners to offer services that were not provided in the past.

He said: “The possibilities are now almost limitless. Take a look at Airbnb, for example. In places like Lagos we all know that the hotel industry is already stifled, and as professionals we have also noticed that not everyone likes the idea of ​​booking a hotel. As you can see now, Airbnb offers something different. Now imagine, you could possibly rent out your home on a short-term basis and earn a lot of money in the process. I know a guy who almost made a grind out of it. The possibilities are endless, really.

“I have clients now. When they arrived in Lagos, they did not have enough money to rent an apartment. Luckily for them, we had just launched a package that allows our customers to pay monthly for short-term rental apartments. This works great for people who don’t plan to stay long or those who don’t have enough money to pay a full year’s rent. All they did was access our online platform, call us, and then negotiate a plan that suited them.

An Enugu-based trader, Chukwu Kingsley, who regularly frequents proptechs, welcomed the move. According to him, a wide range of features, including the option that allows him to communicate with chatbots, helps break down the barrier of accessing services with greater ease and convenience.

“It made everything so easy. When I first came to Lagos in 2020, I needed accommodation where I could stay for about three months. I was basically stuck until someone referred me to a particular online platform.