Nigeria’s real estate challenges are numerous. There’s a 23 million-unit housing shortage. Pricing discrepancies abound, along with the widespread belief that millions are being ripped off by greedy landlords. Infrastructure is poor in many areas, as are utilities. Mortgages are extremely expensive. Building materials are often of low quality.
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The list seems endless.
But if you were a thinking tech-savvy entrepreneur with a flair for entrepreneurship, how would you tackle these issues? Would you create an online market for agents, or disrupt the provision of basic services with creative solutions? Would you appeal to first principles to break down and analyse local construction costs, until you find ways to build cheaper, yet better quality structures?
How about deploying data science to crunch numbers, redraw maps, and erase information asymmetries in property markets?
That last question is what this article is about. If you’re a PropTech entrepreneur with a background in data science (or you know a potential cofounder who’s great at it), perhaps you should consider launching a startup for a real estate solution that’s backed by data science.
Short on ideas? Here are 6 you could choose from.
Urban Planning and Optimising Land Use
Nigeria’s towns and cities are largely unplanned. The resulting urban sprawl lengthens commute times, makes transportation expensive, and limits the growth of the local economy. There are also safety issues associated with this, such as the potential loss of lives and property to fires, exacerbated by inaccessibility.
Your solution could analyse satellite data imagery, mobility patterns, and population density data to identify underutilised areas, optimise land use, and support sustainable urban planning. You could consult for urban planning companies and the government, and generate revenues from this.
Fraud Detection and Identity Verification
Land scams and property title fraud are rife in parts of Nigeria. Some locations, especially larger urban areas with a high demand for property, are especially prone to fraudulent activity.
Using your data science skills, you could build and apply anomaly detection algorithms to identify suspicious transactions and match property records across government and private databases. You may sell your services to the government as a contractor or to private investors. It could protect investors and buyers, and eventually increase trust in the sector.
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Demand and Supply Forecasting
We briefly referred to an information gap. The fact is, there’s a lot of it in Nigeria. For example, there’s often a mismatch between property supply and actual demand in many areas. As a result, you’ll get overvaluation in some places and underpriced assets in others.
One way to remedy this problem is to use predictive analytics to forecast housing needs. This requires that you work with demographic, migration, income, and job market data. Information for some of these things is patchy, but there may be enough available to use for starters.
Your solution could help developers build the right kind of houses in the right locations, reduce vacancy rates, and meet actual needs. You’ll get paid for your service; they’ll skim profits off information gaps to smooth the pricing landscape; and property buyers or renters will enjoy fairer fees. Everyone wins.
Target Marketing for Real Estate Companies
Many real estate companies in Nigeria are unable to properly segment their target audiences and market to the segments accordingly. The major reason for this is that they can’t access data-backed solutions to support this kind of operation. There’s a financial cost to this: they end up with lower returns on marketing spend than they would want.
Data scientists can tackle this issue with statistical clustering and segmentation techniques. This may enable them to identify distinct population segments, which may somewhat correspond to specific geographic habitations. With this insight on hand, marketers at real estate companies can sell the right products to various local markets.
Your clients will be real estate companies. You may provide this as software, with updates available; you may take the consulting approach; or you could do both.
Land Registry Digitisation and Insights
Land ownership records are frequently incomplete or inaccessible. That’s a challenge for real estate investors, who want to learn what they can about properties they’re interested in before making a purchase. It also means that land disputes carry on for longer than they should, as ownership is difficult to prove conclusively.
You can fix this problem by using data science to digitise and link fragmented records, analyse land ownership patterns, and detect irregularities. This strengthens local governance and helps to resolve disputes.
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Infrastructure Planning and Site Selection
We see evidence of poor infrastructure planning all around us. From neighbourhoods featuring a suboptimal mix of residential and commercial sites to airports situated in places with marginal economic activity. Examples abound.
Sometimes, this is the product of corruption. But at other times, it’s simply terrible execution driven by a lack of adequate planning tools.
For state governments that struggle with the latter, there might be a solution. You could sell them a remedy that combines GIS data, road networks, public service access, and population growth projections to identify optimal sites for residential, commercial, or industrial development.
Your PropTech startup will contribute to smarter development and better-located real estate projects.
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Final Words
Nigeria’s real estate challenges might seem intractable. But they aren’t. We can overcome them with the right technologies, accompanied by a will to make our communities thrive. If you’re a data scientist, you can make this happen. We’ve shown you how.
Got a suggestion? Contact us: [email protected]
