I SEE FAR MORE OPPORTUNITIES FOR GROWTH IN THE ONLINE REAL ESTATE MARKET THAN CHALLENGES…. WE ARE SEEING INTERESTING TRENDS IN HOW PEOPLE ARE COMING TO OUR PLATFORM – WITH THE BIGGEST SURGE OF COURSE IN VISITS FROM MOBILE DEVICES
Mr. Obi Ejimofor is the Managing Director of Lamudi Nigeria, a leading online real estate firm in Nigeria. Obi shares with IT Edge News, ABUBAKAR MOSHOOD, how the internet has brought changes to the fragmented real estate market in Nigeria and how Lamudi is at the fore front of that change.
How much has the internet impacted on the real estate market in Nigeria?
I think we are at the very early stages of seeing an impact from online activity on the real estate market. The real estate market is still very much as opaque as it was prior to the emergence of the internet and online property marketplaces. We have an extremely fragmented industry of real estate agents, surveyors and property developers. Real estate prices and pricing are still very much driven by supply rather than by demand. We still have an extremely low degree of trust between sellers and buyers, with state backed transactions still considered the safest bets. The marketing of property in traditional newspapers remains an expensive cost with very little information available to potential buyers leading to a high reliance on personal relationships in deciding whether or not to enter into a transaction. But the internet is driving a change. Online property marketplaces are reducing the number of middlemen involved in property transactions, bringing buyers and sellers closer together. This can only lead to greater trust in private transactions. Marketing property online is driving down the cost of marketing property and increasing the range of choice available to potential buyers. Just as importantly, buyers have access to far more information about available property supported by images sufficient to support a short-listing of properties without leaving your front door. With greater trust and greater choice, we are seeing a significant upsurge in online activity around private property transactions. A good indicator of this trend is our experience on our site where we have seen a 50% increase in visits in the last 2 months alone!
What are the challenges hindering the growth of the digital real estate market in Nigeria.
In truth, I see far more opportunities for growth in the online real estate market than challenges. We are seeing tremendous growth and we have only just started in the sector. If there is one challenge to uptake, I would say it is in pricing. At the moment, this is a seller’s market. However, I strongly believe that as we gain more transparency on the actual demand and buyer willingness by city, area and property type, we will see seller’s becoming more responsive in their pricing which will in turn attract more buyer activities as we will now have the magic combination of great choice, improving trust and demand-driven pricing.
Looking at your real estate online portal, are we beginning to see behavioural changes in how Nigerians seek for properties of their choice?
Definitely! We are constantly monitoring our customer activity on our site and aside from an exceptional increase in overall visits. We are seeing interesting trends in how people are coming to our platform – with the biggest surge of course in visits from mobile devices. Over the last two months, we have seen exceptional growth in the numbers of people subscribing to our newsletters and email alerts in order to be alerted when properties matching their preferences come available. We are seeing an ever growing conversion rate of visitors moving from just viewing to contacting our partner agents to either rent or buy their advertised properties. We are also seeing customers becoming ever more discerning in making their choices, with buyers’ increasingly choosing to follow up on properties providing detailed descriptions and multiple visuals/images. We have thousands of repeat visitors to our site daily; we see our site becoming the first port of call today for anyone looking for property in the Nigerian market – our challenge today is to keep up with the demand, which is a great challenge to have!
‘Marketing property online is driving down the cost of marketing property and increasing the range of choice available to potential buyers. Buyers have access to far more information about available property supported by images without leaving your front door’
What is the value of the real estate market in Nigeria vis-à-vis developed economies globally?
I think Nigeria is on a completely different growth trajectory from the developed markets both in terms of the overall economy and the real estate sector. To make a comparison may be misleading as it in no way takes into account the impact of demand, supply, enabling infrastructure, land policies and available data. Following the rebasing of the economy, I believe the real estate sector is said to contribute around 8% of overall GDP. In India, real estate contributes about 6.3% of GDP, in China its above 15%. Where do we stand in comparison to the emerging markets? I can’t say. Is there tremendous room for growth in the real estate sector? Definitely!
Many Nigerians have been defrauded often times by fraudulent agents. Will the digital real estate market in Nigeria curb this?
The answer to this depends on each online service provider. I believe that trust and fraud on the internet are basically mirrors of the same in the real economy. But the interesting thing about internet activity is that reputations for trust, consistency and quality can be established and maintained given the role of social media. It is very hard to consistently carry out fraudulent activities online without constantly changing identity as fraudsters are identified and communicated quickly between friends and peers online. It takes longer to establish a good reputation online as you need to deliver what you say you will deliver consistently and ride on the recommendations of happy customers. At our site, we have focused on building a value chain of trust from the ground up. We know and have physically met almost every partner agent that sells on our platform. We ensure that we have the approval of the designated seller for every property we put online. We work hard to ensure that we provide buyers with as much information as possible about each property marketed, very often taking the pictures and collecting the data ourselves. We understand that trust is hard to establish and easy to lose, and this mantra guides our actions day in and day out. Going forward, I believe that a combination of accurate data, the participation of reputable institutions in government and the private sector and the growing emergence of platforms such as ours will collectively lead to a transparent and trusted online real estate marketplace in Nigeria. We intend to play a key role in bringing this about.