In real estate development, South Africa has always been ahead of Nigeria. For Nigeria’s less than 1 percent mortgage contribution to GDP, South Africa has about 30 percent. In South Africa, it takes lesser time and costs less to register property. It is also less cumbersome.
Nigeria lags behind South Africa in terms of home ownership. For South Africa’s 56 percent, Nigeria has 25 percent home ownership level for its 200 million population and acclaimed largest economy in Africa.
The country comes far behind Indonesia and Kenya where the levels are 84 percent and 75 percent, respectively.
Recently, South Africa outpaced Nigeria with the development of its first blockchain-based property register made possible by a partnership between Centre for Affordable Housing Finance in Africa (CAHF), research consultancy 71point4, and Seso Global.
A blockchain is an aspect of what is now popularly called PropTech, a short form of Property Technology which is a collective term used to define start-ups offering technologically innovative products or new business models for the real estate market.
The new development in South Africa will be the first working example of a blockchain-based property registry in the country. Aside from creating an immutable record of who owns which house, it will facilitate and record transactions such as sales and transfers out of deceased estates.
The blockchain solution comes with benefits.
Daniel Bloch, CEO of Seso Global, a blockchain property registry company, explained that the solution allows data to be stored in a decentralised, secure database that can be updated without any loss of historic data.
“This means there is a secure, back-to-back record of all transactions that is completely tamper-proof. Eventually the vision would be to integrate this record into the Deeds Registry when other impediments to transfer have been removed,” Bloch said.
This is a major lesson for Nigeria where getting data remains a big issue, making the property market in the country very opaque.
Abdulhakeem Sadiq, founder/CEO of Zama, a new PropTech company in Nigeria, said though PropTech is slowly gaining momentum in developed markets, it is yet to gain traction in Nigeria.
“And we feel a developing market like Nigeria can learn and re-calibrate itself for seasoned investors,” he said at a forum in Lagos.
Roland Igbinoba, president/founder, Pison Housing Company, agrees, stating that global investment in Prop-Tech has been significant.
“It surged from a mere $20 million in 2010 to $14 billion in 2018, and projected to hit $20 billion in 2019. The investments have been witnessed in virtual reality, real estate crowd-funding, big data & analytics, artificial intelligence, smart building technologies and portal listings among others,” he said.
Like Nigeria, South Africa has land titling problem. But unlike Nigeria, the country is thinking and working on solving that problem, hence the new development with its many benefits.
Kecia Rust, CEO of CAHF, said the South African government has built over 3 million houses since democracy. But CAHF’s analysis of deeds office data indicates that only 1.9 million of these properties have been registered. In Nigeria, only 0.5 percent of properties are in formal mortgage.
South Africa’s National Department of Human Settlements, Water and Sanitation (NDHSWS) estimates that the title deed backlog for properties built prior to 2014 currently stands at 511 752. These properties were given to beneficiaries, but no title deeds were registered and handed over. At the same time, there is a backlog of 351,470 title deeds on newer properties.
Registering these properties so long after they were built and handed over to subsidy beneficiaries is an administratively complex task. In some cases, original subsidy beneficiaries are no longer living in the properties. Some beneficiaries might have passed on; some might have tenants in their properties while others have sold their houses informally.
