Growth in online real estate market threatens agents

Figures from online platforms are pointing to an increase in the number of owners and prospective tenants who are opting to sell their homes or rent property online without the use of an agent.

The Guardian learnt that the number of renters searching for property online platforms rose to 10 per cent in 2016 – an increase of 5 per cent since 2015, while direct home buyers also shot up to 8 per cent at the end of 2016.

Until now, online estate and letting agents were not reckoned with in Nigeria, as the search market was still in its infancy. Property owners and tenants prefer to use the traditional estate agents and pay exorbitant fees to sell or rent a home. Often, prospective tenants have fallen victim to fraudulent agents, as the estate agency profession was an all-comers affair.

All that is now history as the digital revolution is increasing, with a new wave of real estate platforms like Jumia House, formerly Lamudi, ‘tolet’, ‘rent’, ‘private property’, ‘Nigeria property centre’ and ‘property vaults’ raking in huge profit from its users.  The latest entrants are  ‘Zulwa’ and ‘Instant Warehouse’. Instant Warehouse is a specialised industrial property portal.

Zulwa like other websites help users find homes in their desired locations within reasonable budgets, connect real estate agents and property sellers to millions of buyers through their platforms. Zulwa does not charge users an agency fee for any kind of transaction, only connect property agents and property owners with active listing prospective clients directly.

Other social entrepreneurs are also joining the fray like Property Insider, dubbed as Nigeria’s only real estate news website, which is diversifying into an online property marketplace, with provisions for multiple property listings from a selection of certified agents, brokers and landlords.

Property Vault claims that traffic is growing and attracted over more visitors in January, while Property Insider projects that at the end of its upgrading exercise about 100,000 unique visitors are expected per day on its website.

The Guardian investigation revealed that some online portals are smiling to the bank, charges range from N30, 000 to N40, 000 for six months per property listed. Some portals charge much lower and share commission with estate agents.

Online players such as Property Insider founder, Marc Philips, declined to comment on new developments in the industry, but appeared upbeat about the company’s prospects and pledged to “protect the traditional estate agent model.” Philips plans to make property portals, the first step for nearly everyone buying or renting a home in Nigeria.

For Andy Morkah, the managing director, Property Vault Nigeria Limited, the competition in the digital marketing is stiff, bringing out the best in the Nigerian property market and leading to its recovery.

He said that platforms have also enabled sellers and buyers, landlords and tenants to deal directly with one another and bypass the middlemen.

Unsurprisingly, estate agents themselves have mixed views about the rapid growth of real estate portals. Few admits that portals pose serious threats, others say technology has greatly enhanced the practice of estate agency making it possible to market and advertise ones properties through all kinds of channels and giving access to sometimes millions of possible viewers and potential customers.

According to International Real Estate Federation (FIABCI) Africa president, Chudi Ubosi, technology is a “big threat” and a “real cause for concern”, especially with property agents in Nigeria.

“Online platforms do pose a major problem in the practice of estate agency. Its anonymity greatly increases the chances of fraudsters hiding as professionals and defrauding unsuspecting members of the public as they source for accommodation.

“There is this tendency for a lot of people to believe anything they see on social media and this translates even to serious businesses when they should seek professional guidance especially as it pertains to real estate.

Ubosi, the immediate chairman, Association of Estate Agents of Nigeria (AEAN), an arm of Nigerian Institution of Estate Surveyors and Valuers (NIESV) however, agreed that technology has greatly enhanced the practice of estate agency making it possible to market and advertise ones properties through all kinds of channels and giving access to sometimes millions of possible viewers and potential customers.

He said: “It must be understood that real estate marketing like so many other activities depends so much on visibility of the product and the agent. Technology has made that a lot easier.

“Technology has also made it easier for frauds to operate, it is still advisable that when the services of a real estate agent is needed, members of the public are advised to seek professionals and ask of them for some kind of identification that confirms that they are indeed professionals.”

The secretary general, AEAN, Mr. Gbenga Ismail who also admitted that online portals pose a great danger to all agents, told The Guardian “ technology is disruptive, and goes after the middle man that is the agent.

“A property owner can be his or her own direct agent. They can easily market their property, screen such offers and even give agreements,” he said.
He advised that, “agents must provide information and this is where the future lies. How much information do we have to help property owner make a decision. Agents can still be the clearing houses as technology continues to disintermediate.”

The secretary, NIESV’s Faculty of Housing, Mr. Casmir Anyanwu believes that the platforms does not pose danger to the real estate sector rather, it is a boost to the industry.

“ It brings buyers and sellers together with little effort, eliminating time wasting, facilitating inspections, guaranteeing wider reach to both buyers, sellers, landlords and tenants.

Anyanwu stressed that traditional estate agents will still be relevant in years to come, as a lot of Nigerians are not literate to operate online transactions. “The market is so large that activities of some property owners cannot diminish the role of agents.

“Buyers and tenants want to deal with established agencies with track records because anybody can pose as a landlord or tenant or buyer and defraud the other party, which is the case with some online transactions,” he added.