A major lesson from Coronavirus experience , especially in emerging economies, is that housing usage and needs are changing fundamentally such that its future depends largely on technology and the needs, tastes and preferences of an age group called millennials.
The pandemic has made it clear to all that homes are no longer mere living spaces for accommodation, but transforming into workplaces as work goes remote with work from home (WFH) becoming a new normal wholly accepted by many organisations.
The millennials, who are a significant group of users within age bracket of 25-35 years, will drive the new dynamics of housing needs either as renters or homebuyers, with more sophisticated tastes and preferences.
It follows therefore that, going into the future, housing suppliers must, of need, factor these new dynamics not only in their investment decisions, but also in their designs and mode of delivery to reflect these tastes and preference of an age group whose population is over 40 percent of the national.
Future housing demand resides with these millenials and the opportunities coming from that is huge given their numbers. This means that, going forward, investment success or otherwise will depend a great deal on how investors respond to their needs.
This is where technology comes in as a major driver of the future of housing. Technology and innovation have become quite critical to housing delivery, according to Ahmed Dangiwa, the managing director of Federal Mortgage Bank of Nigeria (FMBN).
“Business models in the housing sector rely more on technology in areas of technology-integrated homes with smart systems such as energy efficiency,” Dangiwa noted, explaining that property technology (PropTech) is needed to improve interconnectivity of housing demand and supply.
He added that construction technology (ConTech) is also needed to improve building efficiency, reduce cost and wastages. But he advised that existing PropTech and ConTech technologies must be adapted for affordable and social housing delivery and not just the high-end housing market.
Interestingly, the new dynamics in housing delivery are already filtering into the Nigerian property market. Real estate developers are already witnessing a preference for smaller, more compact and functional spaces such as studio and 2-bedroom flats compared to luxury and detached properties.
To respond to the new dynamics, owners of existing large properties are re-modeling to offer shared and temporary accommodation, especially in upscale areas to make rising property prices more affordable.
Considering the deeper involvement of national and sub-national governments in housing as an economic recovery tool, Dangiwa advised further that governments must ease access to land and implement legal reforms such as adopting model mortgage & foreclosure laws, low transactions costs for property, etc to encourage housing development.
Incorporating energy efficiency in housing delivery strategy commonly called green building is gradually gaining traction in the Nigerian building industry. Whereas A-grade office buildings like The Heritage Place in Ikoyi and Nestoil Towers in VI, both in Lagos, are ready examples in the commercial segment of the market, the residential segment is still doing a catch-up.
Alpha Mead Development Company’s Lekki Pearl Estate stands out as one of the very few in that category. With its EDGE certification, residents of Lekki Pearl will save 40 percent on energy bills and 30 percent on water consumption, according to International Finance Corporation (IFC).
The Excellence in Design for Greater Efficiencies (EDGE) initiative was instituted by the IFC – a member of the World Bank Group, in 2014 to promote sustainability in the real estate development sector through the construction of green buildings.
With the new trends in the housing sector, Dangiwa canvassed government’s interventions to stabilize economics and housing markets in the near future despite the risk of causing price bubbles.
He noted that opportunities exist for growing the housing markets by public and privates sector initiatives that key into emerging trends and preferences and integrating innovative technologies.