Housing Finance Data in Africa

In Africa, there is a dire need for investment into housing markets. Theorists and practitioners of finance have consistently argued and demonstrated that investment is driven by information because information informs business decisions. Conversely, the lack of information or data is often cited as a fundamental stumbling block of investment in Africa. This lack of information means that the analysis and forecasting of the profitability and riskiness of an asset or market will be undermined. Across the majority of African economies, either the data is not collected, or what data is collected is not useful or readily available to investors.

Because of the importance of economic forecasting to the economy, many governments (through their Central Bureaus of Statistics) have taken on the task of collecting data seriously. It is assumed that with government control of the collection of data, the data will be both reliable and valid. However, data is often incomplete or quickly out of date. A set of criteria which indicates high quality of data is needed because economic endeavours change over time. The first criterion is that the data be used by reputable organisations that are not related to the data collectors. The second criterion is the regular output of data to provide an historical dataset which takes into account both statistical and definitional revision. The third criterion is that the data collectors have an international reputation for reliability.

There are three issues which relate to availability of data on African property markets. The first problem is that data is hard to obtain because of the private nature of property transactions, traditionally restricted by confidentiality constraints and conservative attitudes. Secondly, accessibility to some datasets is only restricted to a few unless a length process of authorization is undergone (e.g. banks’ mortgage portfolios). Lastly, the data isn’t yet being collected.  In many countries, deeds registries are in their infancy and a system of translating this information into data and analytics has not yet started.   The following housing data or indicators, set out in the first column of the following table, are not available in most countries.

The obvious solution to this problem of lack of availability of suitable property data may be in having a centralized, accurate, up-to-date and accessible source of property data on all or most African countries. In my opinion, the quickest way to get property data to the public is to equip a private data agency or property research organisation to mobilize reliable field researchers in each Africa country who could go and pull out the required statistics. These statistics would then be reported by the agency/organisation periodically and build the reputation and hence the integrity of the data and the reliability that goes with it.