Stories by Maduka Nweke,
[email protected] 08034207864, 08118879331
Technology has continued to play pivotal roles in the development of both processes and products in real estate. Of course, technology has positively affected real estate in terms of designs, materials and even in the assembling of innovations in the industry.
Technology changed the mobility industry from the moment the first computer hummed in an office, and mobile technology is reshaping the industry yet again, especially in the real estate sector. Technology has reshaped how real estate is delivered to the consumer and how we as consumers manage our daily lives.
The move toward mobile technology is one that has affected most real estate professionals. At the minimum, most brokerages have developed mobile versions of their websites, and now many are creating specific mobile apps. For Nigeria to bridge the current shortages in housing supply, it will have to embrace an advanced construction technology to enable the body and other allied professionals bridge the gap of housing deficit in the country.
Experts in the real estate sector have argued that to brigde the gap in the housing sector, investors need to move beyond a focus on short term drivers to long term funding. To achieve this, there is an urgent need for an advanced product innovation. This is the most obvious innovation because it is the most noticeable. In real estate development, product innovations include changing exterior designs, layouts or building functions and adding special features; providing exclusive services, which means introduction of green technologies, etc. These easily noticeable changes can be simply copied by competitors. Nigerian developers have in the past limited innovation to architectural designs and spatial functions.
Beside building the end-product, real estate developers must now also conduct other processes that impact their overall business performance. In the past, this has been ignored as there were few buildings with willing buyers ready at any price point. In that regard, process innovations cover finance, methodology, management, procurement and marketing. To create competitive advantage, real estate companies must review and develop these optimum processes. Key business process innovations in construction, finance and marketing are most significant and often create tremendous competitive advantages for real estate developers.
Housing is one of the three basic needs of man and most important for the physical survival after food, which has a profound influence on health, efficiency, social behaviour, satisfaction and general welfare of the nation. For this to be actualised, architects are urged to deliver on their mandate by producing quality buildings. There is need for all architects in the country to revitalise the economy and fight corruption through the reform of the building industry with needed package to increase GDP, employment, affordable housing and a mixture of building materials technology. Affordable low cost housing might prove to be the lasting solution that the housing problem needs. The phrase, “affordable housing”, has often been difficult to achieve because the cost of building materials in Nigeria has continued to increase steadily over the years.
But in all of these, innovative construction methods can greatly impact on project costs, time, and quality. Prefabricated construction, just-in-time construction and top-down construction are a few examples of innovative construction methods. Innovative financing processes include real estate investment trusts (REIT), property funds, alternative mortgages and securitisation. Innovative marketing includes digital marketing, offering bespoke management services, show flat experiences, among others. Although process innovations are often more difficult to implement, they normally impact a company’s performance significantly and are difficult to imitate.
The recent economic downturn has caused the real estate sector in Africa to fall below the projected 2.6 per cent regional growth and with the economic indicator showing Nigeria out of recession, the nation, however, has seen that balancing short term indicators with long term structural change will reinstate investor confidence, which is paramount to the success and continued growth recovery process of the sector, as driven by government reforms and policies.
In all, housing gap cannot be met through public resources alone because private sector involvement is also critical. Nigeria as an emerging economy needs a sound and effective capital market that is properly regulated and supervised to bridge the huge infrastructure financing gap that already exists. Nigerians do not expect real estate to depend on money market funding alone, although they need the money market to start but has to be refinanced, which is done through the debt or equities market.
Real estate promotes economic stability and there is a relationship between real estate and capital flows on one hand and economic stability on the other hand. This is because the financial banks do not have the resource needs in the industry, so the need for institutional investors to invest for the sector to grow. The real estate sector is full of opportunities and access to funding remains a challenge. Nigeria needs the Pension fund to finance the housing gap with government to provide incentives that will protect private capital into real estate sector.
Again, for a steady development in the real estate sector of the Nigerian economy, there is also the need for material innovation. Materials are a major real estate development industry input. In developed markets, construction materials suppliers are often also major housing industry innovators. Nigeria unfortunately does not belong to this category. The built landscape is largely a combination of a concrete jungle and shanties, and technology advancement in this area is non-existent as there are acute lack of major material innovations.