Tunde Balogun is the Co-founder,Rent Small Small, a Nigerian property technology startup that is redefining the home rental market. In this interview with DAYO AYEYEMI, He speaks on the wide gap between demand and supply of studios and one-bedroom apartments how is affecting the rental prices in Lagos State, calling on the government to priotise by giving land to developers who are focused on building these types of properties for the purpose of increasing the supply of affordable housing in the market.
What is the update on the property market in regards to the monthly rental payment platform your firm introduced two years ago?
Against all odds, the monthly rental market has come to stay and we are seeing great adoption from both tenants and landlords. Although, it has been a challenging journey, because a demand is placed on us as one of the pioneers of monthly rentals to completely re-work the prevailing upfront model that has locked many people out of economic opportunities over the years. Our persistence and resilience in the last five years has not only positioned us as the market leader, but it has given us a better understanding of the market.
What are the factors driving the rental market/values?
The number one factor is prime location. More people, renters and landlord alike, are paying more attention to the area in which a property is located. Properties in desirable locations with access to social amenities rent out fast at higher value.
The number two is economy and market trends. The state of the economy has a significant impact on the rental market as property value fluctuates with local market conditions. With the rise in inflation, upfront payments are becoming more challenging and monthly payment plans are finding deeper roots, reducing the burden of making huge bulk payments, and increasing better financial management.
Is there any hope for low-income earners looking for accommodation?
Yes, there is hope for low-income earners in search of a place to call home. For young professionals, they can access affordable housing options such as shared apartments, which reduce the pressure of shouldering bulk payments. For low income families, it will take some level of social support from nonprofit organisations and community groups that can give necessary assistance. But primarily, the government need to step in and offer resources and funding for housing assistance programs, to help more low-income individuals and families.
What are the reforms needed to stabilize the market?
Supply: Market needs are changing as the high demand for monthly rental is within the younger working class demographic who are looking to rent a studio or one-bedroom apartment. The wide gap between demand and supply of these type of properties is also affecting rental prices. Lagos State Government can priotise by giving its land to developers who are focused on building studios and one bedroom apartments, for the purpose of increasing the supply of affordable housing in the market based on the high demand among young professionals.
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