While proptech startups are tackling inefficiencies in Africa’s real estate market, they still have some glaring problems to contend with.
By Michael Akuchie
As cities across the African continent continue to witness a surge in population due to rural-urban migration, this trend puts a larger strain on the available housing units. In 2024, Nigeria’s Minister of Housing and Urban Development, Ahmed Dangiwa, revealed that 80% of Africans are facing a severe housing crisis. In South Africa, the government constructed 235,000 housing units between 1998 and 1999. Despite the country’s population boom, the number of houses built by the government has declined to 34,000 in 2022 instead of increasing as many would expect. This is due to repeated cuts to the National housing budget, corruption within government housing programs, and the limited availability of land. These factors have made it extremely difficult for the average South African to find affordable housing with decent amenities like water.
The Countryside Charity defines a housing crisis as a situation whereby “a significant part of the population doesn’t have access to a safe, decent home that’s suitable for their needs and that they can genuinely live in”. Africa’s population is growing at a rapid rate, while the number of available housing units has only slightly increased. Even though there are some housing options, most are usually expensive and are out of reach for the middle-income and low-income citizens.
In a paper, Emmanuel Abolo Moore highlights the lack of inexpensive housing finance, high costs of urban land, rising construction costs, and the spread of slums as key players in the inability for people to access modest housing. Inflation has also negatively impacted the working class, making it more difficult for them to afford the construction of a house or even annual rent.
Proptech startups—businesses that leverage technology to improve real estate service delivery—have entered the African housing scene with a mission to simplify the rental process for both tenants and landlords. Their services typically include digitising processes such as rental property tours, rent collection, and tenant verification. While many proptech brands focus solely on rental properties, some also offer services covering the construction, buying, and selling of real estate.
Technology plays a key role in streamlining the rental process in Africa. Instead of paying an exorbitantly high upfront fee to a housing agent, people can now take virtual tours of an apartment or flat directly from their devices. This involves using immersive technologies such as Augmented Reality and Virtual Reality (AR/VR). For those who prefer a physical tour, some proptech startups also connect prospective tenants with landlords. Think of it as a Facebook Marketplace or Jiji for real estate.
Some of the most prominent players in the continent’s proptech landscape include Nawy, Mubawab, and Jumba. While proptech startups are addressing inefficiencies in Africa’s real estate market, they still face some glaring challenges.
One major issue is the low level of trust in online property listings. This is a common problem in online shopping more generally. For instance, fake listings are widespread in the second-hand gadget market, making buyers overly cautious when dealing with online vendors. There are countless cautionary tales of buyers receiving gadgets that looked nothing like what was advertised online, despite paying a hefty sum.
Many people looking to rent a mini flat or even buy land are more likely to meet agents in person and arrange a physical tour, rather than rely solely on a virtual tour and make a final decision based on what they’ve seen on their device screens. Concerns about the authenticity of online real estate listings are not unfounded, given the prevalence of fake adverts online.
Scammers can easily download images of a building and create a fake profile where they will upload the photos and act like the building is theirs to rent or sell. Due to the fact that the average tenant or property developer will want to physically inspect the property, scammers prey on the human nature of greed and then offer said property at a ridiculously low price. Usually, most prospective victims will avoid such suspicious deals, but it is possible for one or two ambitious persons to fall victim.
Scammers can easily download images of a building and create a fake profile where they upload the photos and pretend the property is theirs to rent or sell. As most tenants or property developers typically want to physically inspect a property, scammers exploit human greed by offering such properties at ridiculously low prices. While most prospective victims may steer clear of suspicious deals, it’s still possible for one or two ambitious individuals to fall prey.
A great way to restore confidence in proptech startups operating in Africa would be to enforce the use of a property, landlord, and tenant verification system. African countries could make it mandatory for landlords and tenants to verify their accounts on proptech platforms using a Unique Person Identifier. In Nigeria, this is the National Identity Number (NIN). Kenya refers to it as the Masha Namba. It is known as the Ghana Card in Ghana, and the Moroccan National Identity Card (CNIE) in Morocco.
In India, the proptech company NoBroker enables potential tenants and landlords to connect either online or in person. To foster trust between both parties, the company operates a strict property verification process that eliminates fake ads and scammers. Landlords can also conduct background checks on prospective tenants through NoBroker’s Tenant Verification service. The tenant’s identity, criminal record, civil litigation history, and home address are scrutinised to ensure there are no inconsistencies. African-based proptech startups can learn a great deal from NoBroker’s model; by doing so, they stand a better chance of attracting more clients.
While it’s well established that proptech startups operate via the internet, several areas across Africa still lack reliable internet connectivity. In an age where the 5G network has been rolled out in continents such as North America and Europe, many parts of Africa continue to struggle with 2G and 3G speeds. In such cases, proptech companies could consider implementing USSD-based listing and search features, which are accessible via feature phones—devices with basic functionalities such as calling and texting.
Consider M-Kopa, a fintech company operating in several African countries. M-Kopa provides solar energy financing solutions to people in historically underserved communities, accessible through a simple USSD code. Proptech startups can take a cue from this approach and expand their reach by allowing tenants to access property listings via USSD short codes.
Another hurdle for proptech startups is the difficulty in verifying some property records due to the absence of a central registry. Different family members may present conflicting records of ownership, creating confusion for prospective tenants who struggle to determine who the genuine landlord is.
Proptech companies could initiate public-private partnerships with governments, allowing both parties to pool resources and establish a centralised land registry. Rwanda has taken a significant step in this direction by developing an online registry, enabling prospective landowners to browse verified property information for specific plots or acres of land. As the land information on this platform has been authenticated, users can feel confident that they won’t fall victim to scams.
Africa’s housing crisis presents both a problem and an opportunity. Proptech can navigate the challenges in this space by making their services more accessible and by eliminating uncertainty through mandatory landlord and tenant verification.
Tackling these issues with tech-based solutions will simplify the rental process in Africa, ultimately saving time and money. African governments must also work towards addressing the housing deficits in their respective countries by budgeting for more homes to accommodate their growing populations.
Michael Akuchie is a tech journalist with five years of experience covering cybersecurity, AI, automotive trends, and startups. He reads human-angle stories in his spare time. He’s on X (fka Twitter) as @Michael_Akuchie & michael_akuchie on Instagram.
Cover image credit: Immo-invest