Experts agree that real estate—much like fintech—is one notable sector of Nigeria’s economy that holds promise. The country’s rapid population growth—200 million-odd people—provides a vast and ever-growing market. Over 60% of this population is projected to reside in cities by 2030.
Interestingly, the demands of this new market cohort is shifting away from traditional, brick-and-mortar services. Rapid advances in technology have shaped customer tastes, sparking the rise of Property Technology (PropTech).
Previously dominated by online marketplaces and listing platforms, Nigeria’s PropTech sector has evolved greatly, with startups now focused on more systemic problems such as property verification, rent financing and community management.
This progression is a crucial indicator of a market where innovators are building solutions that fundamentally solve deep-seated issues like fraud, access to capital and inflexibility in payment.
Today, the Nigerian PropTech landscape is characterised by a diverse range of service models that target a particular area of the real-estate industry. Some key categories are property marketplaces and flexible rentals.
Particularly, the proliferation of flexible living and investment platforms is a direct response to the high, upfront rental payments and significant financial barriers for investors in Nigeria’s traditional real-estate market.
Perhaps one outstanding feature of PropTech in Nigeria is deploying advanced technologies to address on-the-ground problems.
Several Nigerian PropTech startups leverage blockchain to enhance transparency and tackle rampant fraud in property ownership.
Meanwhile, high-end properties in affluent areas of Lagos such as Lekki and Victoria Island deploy Internet of Things technologies for automated lighting, security systems and energy management.
These solutions not only provide convenience but also address the challenge of unreliable power supply by optimising energy consumption.
The potential of Nigerian PropTech is exemplified in the substantial funding by investors. From just $2 million in 2021, the sector attracted $8.9 million in funding in the following year.
Despite its promise, PropTech startups confront a myriad of challenges. In a survey of Lagos-based real-estate startups, a significant proportion cited limited access to financing as a major barrier. Another study indicates that nearly 30% of PropTech startups simply because they run of funds.
The high-stakes environment of PropTech in Nigeria creates a “survival of the fittest” ecosystem, forcing startups to rely in external VC funding and initial seed rounds.
Additionally, persistent infrastructural deficits pose a substantial operational challenge for PropTech companies. The national grid provides less than 12 hours of stable electricity daily, forcing businesses to rely on expensive generators and inverters.
Internet connectivity remains inconsistent, too. Despite a high Internet penetration rate of 65%, Lagos still faces a shortfall in fibre-optic cable installation, leading to download speeds as low as 0.7 maps in some areas.
Beyond physical infrastructure, an absence of reliable market data and low levels of digital literacy undermine the performance of PropTech in Nigeria.
Notwithstanding, the future of the Nigerian PropTech landscape remains highly promising. While it may not increase housing supply, it will boost accessibility by optimising existing housing stocks.
By digitizing land administration, clarifying the legal landscape, and leveraging innovative, localised business models, Nigeria can transform its real estate sector from a fragmented and opaque market into a transparent, efficient, and accessible engine of economic growth.
The real estate sector in Nigeria, much like fintech, holds significant promise due to the country's rapid population growth, with a projected 60% urban residency by 2030. The emergence of Property Technology (PropTech) is reshaping the market, focusing on systemic issues like property verification, rent financing, and community management, moving away from traditional brick-and-mortar services. PropTech startups in Nigeria are leveraging advanced technologies, such as blockchain for transparency and fraud prevention and IoT for energy management in high-end areas of Lagos.
Despite its potential, the PropTech sector faces challenges, including limited access to financing, infrastructure deficits, and inconsistent internet connectivity. However, with increasing investments and emphasis on digital innovation, the future of Nigerian PropTech looks promising. Efforts to optimize housing stocks, digitize land administration, and create localized business models can transform the real estate market into a transparent, efficient, and accessible contributor to economic growth.
