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“We cannot solve our problems with the same thinking we used when we created them.” - Albert Einstein
The problem we are focused on first at DPAT is credit and easy access to it.
For developers who need capital, getting access to it can be difficult, impossible, or overly expensive. Throughout history, affordable credit has been central to unlocking mobility and opportunity.
The global real estate industry provides a number of difficult challenges from weak proof of ownership, high entry costs to awkward and time-consuming procedures.
African cities face the same real estate process inefficiencies inherited from the global market as well as their own unique issues creating barriers to entry.
- Housing shortage - The World Bank estimates that over the next decade, Kenya, Tanzania, South Africa, Ghana and Nigeria will need 25million plus new homes—more than double what they've built in any other decade since 1990.
- Governance – A history of poor governance and policy framework has made it difficult for African countries to attract foreign investment
- Capital – No long-term funding structures to help real estate developers access capital for large scale projects
- Tax – Many African countries levy capital gains and foreign buyer’s tax
- Legal system - The procedure for purchasing real estate in every country varies in complexity i.e, some allow freehold and others only allow leasehold purchases
- Currency – The currency and value of each country's economy differ causing inconsistencies and volatility
- Authentication & Verification – Deeds, records, ownership processes and the legal frameworks in general are still developing and changes from one country to another.
Investors may be interested in the prospect of doing business in Africa because they see the potential for skyrocketing growth in the African market. Others may be considering investing in African real estate because they see it as a place where there is a lack of investment and entry figures are low so opportunities for high returns is more likely.
This is not an exhaustive list of problems, which are clear, however we believe the solutions are too.