Experts at the recently concluded African Real Estate Society have said that data transparency has continued to constitute a bane to Africa’s real estate market.
This was the resolution of experts at the conference in Accra themed, “Redefining the future of Real Estate In Africa.”
According to an estate intel report, the conference 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 hosted discussions with topics centered on how real estate market participants in Africa could advance the African market.
The experts noted that while several major real estate transactions had occurred in Africa, the data transparency problem was still one that had persisted.
The report partly read, “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.”
Also, politics is a major trend identified as important in the Africa housing and construction sector as well as 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, declining economic growth and 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,” the report read further.
Another key point noted was the rate of urbanisation within all African cities. It was seen that more than 50 per cent of the world’s population lived in cities, and by 2030, 60 per cent would be urbanised.
With the increasing population growth rate, issues such as human capital accumulation, housing deficit, land use disorder, unplanned expansion, and weak rural-urban line are important in determining if Africa is going to be involved in this urbanization, according to the report.
Africa’s young population was seen to be the major driver for the current and future real estate market and emerging niches of real estate (like student housing and shortlet markets).
By 2030, Nigeria alone adds 7.6m middle-class households, Ghana with 1.6m, and Angola and Sudan, 1.0m each.
Foreign direct investments 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 per cent slightly above the global target of 3.7 per cent. This growth and other factors present a strong signal in Special Service Areas for FDIs to impact the Housing sector markets in Africa.
Source: Punch
