The internet revolution and the rise of mobile on the black continent has heralded a deluge of technological conveniences in communication, business, and lifestyle that hitherto were the preserve of the first world. One of the most obvious of these trends is growing traction in the e-commerce sector, which after a number of false starts has begun to show sure signs of taking off in earnest as consumers come online and demonstrate increasing willingness to participate in electronic transactions.
The online retail sub-sector looks all but ready to explode, with the likes of Konga and Jumia jostling to capitalise on the early advantage. The online travel vertical isn’t doing badly either. Local pioneers in that space, Wakanow, are entrenched, and have recently had the South African Travelstart snapping at their heels.
It would appear however that not all Nigerian e-commerce were created equal. In sharp contrast, the online real estate sub-sector does not seem to be experiencing the same levels of uptake that its e-commerce counterparts have enjoyed so far. While there isn’t a shortage of online services with real estate offerings for buying and letting, overall brand awareness appears to be low, and the actual offerings on the sites are far from adequate.
I know this because I’ve been living in my newly rented apartment on the Mainland for just over a month. An apartment which I spent more than six months looking for. Now Lagos isn’t exactly a fun place too look for a place to live, but I expected that my task would be somewhat easier with all the new online property listings sites and classifieds springing up all over the place. As you will have already guessed by now, the reality fell far short of my expectations, and in the end I had to resort to touring apartment after dingy apartment with all kinds of shyster estate agents. I never want to do that again, ever.
So why couldn’t services like Private Property, Property Index and Estate Node help me? I have formed a number of theories which I’m yet to thoroughly validate, but suspect will not be too far off the mark. Given a number of unique factors that circumscribe the business of real estate in Nigeria, I have begun to wonder if that sector as a whole is even ready to come online in the first place.
It’s not that people aren’t looking for houses to buy and rent online, I can tell you that they are — frantically even — I was in a similar position until I secured my current place, so I should know. I actually had to pay for an apartment in a building that was still under construction. Had I waited till it was complete, I would have lost it to one of an infinite number of eager tenants even more desperate than I was. So it isn’t a demand side issue because in Lagos, demand for housing outstrips supply by far.
The vendor side of things is where it gets interesting. Nigerian real estate practice itself is fraught with significant internal issues precipitated by dubious characters. Renting an apartment, for instance, is often not unlike a bad late night sitcom filled with a cast of suspicious landlords, shyster estate brokers (whom we’ve already met above), unscrupulous property lawyers who ride on uncertain property legislation, and of course, the star of the whole show — clueless prospective tenants, desperately looking for a place to live.
In some particularly rotten episodes, you even get a bonus actor — angry tenants on their way out but determined to somehow make some money off the next sucker that will inherit the place after them. Some people will have seen this movie before.
I could go into all the gory details of real estate vendor shenanigans, but this is not the time or place. The sort of drama that I’ve just described obviously doesn’t do well online, and the evidence is in what you can’t find on Nigerian property listings websites — property listings. On the best ones, the scant listings are not nearly enough to make the site really useful for people who have specific location, property spec and budget preferences. On the worst ones, you can’t even find enough properties to make a ghost town. Houston, we have a property content liquidity problem.
From what I can tell however, services like Private Property are doing some business. But mostly with a specific customer niche, high net-worth individuals who buy property worth millions. Because the transactions involve a lot of money and potentially high commissions, the service has incentive to pursue these types of deals with greater diligence than they would the bottom of the pyramid types — budget-conscious apartment renters like me. Given all the above drama involved with letting property, it does make sense to ignore a non-starter vertical and focus on the bigger property sales deals where the net ROI on effort is higher.
Short of becoming actual property brokers themselves, it’s hard to see how online property listing sites can achieve tangible results. Results being satisfied customers who are consistently able to rent or buy property. That would mean having to painstakingly curate the listings, organise inspections, liase with the brokers, blah blah…I’m thinking they might even want to consider disrupting the agent/broker to Landlord relationship altogether and deal with the owners directly. But it’s a shitload of work that these people just do not want to undertake, understandably, given the current levels of return.
At the end of my search, I was forced to cough up two and half years’ rent. Never mind the fact that Lagos tenancy laws stipulate that it is unlawful to demand more than a years’ rent. While I consider myself lucky to have even found somewhere marginally decent, I don’t plan to stay there long. It would be great if by the time I’m ready to move, I can find another place from the convenience of my laptop, because if there is anything I utterly dread, it would be having to go through another harrowing six months of house prospecting.
Either possibility depends on what state the online real estate market would be in at that point in time. Would the space have evolved past its current ethically beleaguered circumstances? Or will this be another unfortunate case of entrenched selfish interests frustrating technological innovation?
Still, if it’s any consolation, startups in the bay area are still trying to crack online apartment rentals. So there you have it. Property stakeholders of all stamps — landlords, tenants, brokers, lawyers and online service providers — please feel free to weigh in on the issues raised.
[image via Flickr/Alfonso Surroca]
