Among the various factors that have disrupted the world’s economic growth is the enormous impact that technology has had, and continues to have on many sectors. The Real Estate industry is no exemption.
The fact that most individuals and companies have embraced the importance of tech innovations and solutions in democratizing service provision, is in itself a great milestone especially for the developing economies – Africa to be precise.
Over the past two decades, the sector has had its share of profound impact from the technological transformation that has been taking place. Dan Karua, the Managing Director for Jumia House Kenya notes that “corporates, clients, agents among others are now able to optimize their business strategies, and in turn maximize on the various opportunities available in the industry”.
Kenya for instance, is a highly-favored location for real estate investors, specially attributed to its fast-growing economy, “increased government investment, and a booming property market attributed to an increasingly growing middle class that has home ownership as a priority and a necessity, rather than luxury”, notes Karua.
Data by the Kenya National Bureau of Statistics show that by the end of third quarter 2015, the real estate sector contributed approximately 8% to the country’s GDP; with a year-on-year growth of 5.4%. This rates the industry as one of the fastest growing sectors in Kenya, contributing immensely to the growth of the entire economy.
Further, the impact has also been contributed by the high rate of internet penetration in the country, with 74 % of Kenyans having internet connection. The digitalization of the Real Estate is, however, being deferred by several real estate companies and investors that are yet to embrace the integration of technology and innovation in the real estate business.
Online real estate marketplace Jumia House, is among companies taking lead in leveraging on e-commerce to drive the Real Estate sector in emerging markets especially in Kenya. The company’s MD goes on to reiterate that “staying atop on technology and market changes is a major prerequisite to any business success, while the lack of it is a likely cause of failure among companies.”
Whether at the company or industry level, developing countries should go beyond the status quo if they are to beat universal competition brought about by globalization. This will go a long way in capitalizing on the high number of foreign investments in the African Real Estate marketplace, while at the same time focusing on individual countries’ market demands.
Evaluating tools such as ‘Market Maturity’ is one of the ways that can close the gap between investment opportunities, and the small scale of Real Estate investment activity in developing countries.