Sub-Saharan Africa (SSA) has continued to make advances in real estate transparency over the last two years according to a new report authored by real estate management company Jones Lang LaSalle (JLL). Access to information and technology are some of the factors that have driven transparency by making it easier to access real estate information. An open legislative, regulatory, and operating environment of the region’s real estate sector has also contributed to its transparency ranking.
South Africa is leading the list of 15 SSA countries with a composite rank of 25 on the 2016 Global Real Estate Transparency Index (GRETI).
The report, titled “Sub-Saharan Africa Makes Progress in Real Estate Transparency,” states that “South Africa remains SSA’ s most transparent market, supported by an active listed sector. It is the only country to feature in the ‘transparent’ category, although it has struggled to maintain its global ranking in the last couple of years.”
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Several SSA countries are considered semi-transparent, including Botswana, Zambia, Mauritius, and Kenya. Their GRETI ranks are 41, 57, 58, and 61 respectively. While Kenya has maintained its semi-transparent category, the other three countries have moved up due to their robust regulatory and market governance frameworks.
“These three countries also represent greater involvement from international real estate consultancies, developers, and investors who are promoting professional standards and availability of data.”
Technology has accelerated the transparency of Rwanda, Ghana, and Kenya by introducing faster access of real estate information and reliability of services. In Rwanda, there are one-stop online centers for real estate permit applications. The Bitland development platform is a technological tool that digitizes land registration for Ghanaians in the town of Kumasi.
Similarly in Kenya, the digitization of land records in the country has hastened the payment of rates and stamp duty, thus reducing the red tape. Since last year, the country has also listed property on the Nairobi Securities Exchange through the Real Estate Investment Index (I-REIT).
The report acknowledges that other countries have made an effort to be transparent regarding their real estate, including Tanzania through its 2015 Introduction of Estate Agency Bill, which aims to regulate the real estate sector.
Lack of Transparency
There are some countries struggling to develop real estate transparency due to the slump in global commodity prices. Since 2014, investors have shied away from Nigeria, Angola, and Mozambique where regulators are unable to facilitate the transfer of funds required to buy, rent, and sell property. Transparency of real estate information has been difficult, especially in Nigeria and Angola. In Mozambique, the power struggle between the Frelimo and Renamo political parties has also adversely affected its transparency.
Overall, improvements in real estate market transparency in SSA will take place once more regulatory oversight and enforcement is done in countries such as Kenya and Nigeria. Future provision of reliable information by local communities, the private sector, governments, and international organizations can also make a difference.