Opportunities abound towards redefining the future of the African real estate market - AFRES Conference, Ghana 2022
Deborah Jesusegun . 2 years ago

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Article Summary: The recently completed, African Real Estate Society conference in Accra themed: “Redefining the future of Real Estate In Africa '' brought together real estate professionals, University professors, and Postgraduate real estate students who explored different areas of research around the African real estate market The conference was both insightful and impactful with topics centred around…
The recently completed, African Real Estate Society conference in Accra themed: “Redefining the future of Real Estate In Africa ” brought together real estate professionals, University professors, and Postgraduate real estate students who explored different areas of research around the African real estate market
The conference was both insightful and impactful with topics centred around how real estate market participants in Africa can advance the African market. However, three sessions stood out for us and these were: African property market, Mortgage foreclosures in Ghana, and the Future of Africa real estate.
Each of these sessions contributed pivotal insights to redefine the future of Africa’s real estate market. This note highlights key insights from each of these sessions.
The African Property Market is still underdeveloped
There are major gaps that differentiate the global real estate market standards from that of the African market. One of the gaps is the low level of data transparency in Africa. This has consequently had an impact on the level of foreign investments in the continent. One of the reasons why investors hold back from investing is the lack of structured data to properly analyse the situation of the market and know where to make entrance. Despite the growth in analytics and data companies like Estate Intel, there is still much more data to be covered.
This leads to the point that the level of global investments in Africa is still considered as superficial when compared to more developed economies. Despite the recent global investments in Africa, the level of investment is still considered low which is a consequence of the low performance of economies due to rising inflation.
Lastly, the current mortgage accessibility – the driving force of a matured real estate market – in the African market is either underperforming or non-existent. This is further explained in the mortgages session with focus on the Ghanian mortgage market.
Delays in Ghanaian Mortgage Foreclosures is Weakening the System
Some of the primary roles of mortgages are identified as:
- Providing households with funds to make home purchases
- A major source of long term funds for SMEs
- A relatively stronger channel for monetary policy
Despite these advantages of mortgages, the mortgage markets in Africa still remain largely underdeveloped as many markets have low mortgage debt to GDP ratios, as well as poor regulatory regime.The Ghanian mortgage system in particular had a major issue of realising collaterals and delays in foreclosures, thereby weakening the system.
The long delays in mortgage foreclosures has been noted as one of key bottlenecks impeding the growth of the mortgage market. Legislators seemed more interested with borrowers raising objections to foreclosures, than in lenders realising their collateral. This was seen as preliminary evidence suggested that proceedings for recovery of possession do not turn into a full trial.
PropTech is making Contributions Towards Solving Africa’s Real Estate Data Accessibility Problem
While several major real estate transactions have occurred in Africa, the data transparency problem is still one that persists. The opaque nature of African real estate shown by the limited number of real estate research companies in Africa is a key characteristic of an immature market. Markets that possess a wealth of data have a competitive advantage and are more likely to attract private sector investment funds. In order to address data transparency in Africa, proptech companies like Estate Intel have risen up to the challenge.
The Future Of African Real Estate Depends on Major Post Pandemic Factors
Some major trends have been identified as important in the global real estate market, and the same is true for the Africa real estate market. These trends are explained as follows:
Macroeconomic and political regimes
With a number of African countries facing either recently concluded or planned elections, their economies are being closely watched. The social rest or unrest of the country, possible new laws being enacted are likely to affect the real estate economy. These political issues coupled with the general global rising inflation rates and declining economic growth, as well as high cost of capital are all currently weighing on the real estate market. All of which would have an impact on the future of the African real estate market.
Demographics
When looking at the future of real estate, it is necessary to take into consideration housing needs; increase in demand for utilities, and answer important questions such as;
- Where are people moving to?
- Which are the countries and cities people want to live in?
- What is going to happen in the inbound countries or cities?
Urbanisation
Another key point noted was the rate of urbanisation within all African cities. It was seen that more than 50% of the world’s population lives in cities, and by 2030, 60% will be urbanised. With the increasing population growth rate, issues such as: human capital accumulation, housing deficit, land use disorder, unplanned expansion, weak rural-urban line are important in determining if Africa is going to be involved in this urbanisation.
Africa’s young population was seen to be the major driver for the current and future real estate market & emerging niches of real estate (like student housing and shortlet markets).
By 2030, Nigeria alone adds 7.6 million middle class households, Ghana with 1.6 million, and Angola & Sudan 1.0 million each.
Global investment
Foreign direct investments(FDIs) have also been growing in the past years according to the speaker. Prior to Covid-19, Africa was on the verge of achieving an overall economic growth of 3.8% slightly above the global target of 3.7%. This growth and other factors present a strong signal in Special Service Areas (SSA) for FDIs to impact the real estate markets in Africa.
Africans in diaspora
Remittances from Africans in diaspora were also seen as important for the future of the African real estate market. A large number of Africans have migrated to wealthier countries or states across North America, Asia, Europe, etc. The United Kingdom, United States, France, and China have contributed up to 25% of remittances. Remittances increased from USD 29 billion in 2009 to usd 4.8 billion in 2019 as mentioned in the conference. A part of these remittances are spent on housing, education, and small businesses.
Prop-tech
Property technology, also known as prop tech has been a major theme in Africa’s real estate of recent. With digital platforms set to solve Africa’s major real estate issues, there are now platforms available to improve: land tenure security, property management, land registration, valuation, data storage, etc.
This session concluded by confirming that opportunities in the real estate markets in Africa are set to surge, however, this would happen smoothly once all market participants focus on performing their roles in improving:
- Legal and regulatory frameworks
- Technology and innovation
- Data and Information accessibility
- Infrastructure investment
- Training, research and professional competence
We love your feedback! Let us know your own key takeaways from the AFRES conference by sending us an email at [email protected].
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