Pandemic hastens uptake of new technologies in the sector
Property-related technology, commonly known as Proptech, was the new buzz concept just a couple of years ago but now, with the help of lockdown, has become a norm in the real estate industry.
And those who are using it well are helping to evolve the property sector.
From the way properties are marketed through to the processes of viewing, selling, and managing properties, new technology is improving traditional industry practices and changing expectations of both property professionals and end-users.
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In a 2019 report produced by the Urban Real Estate Research Unit (Ureru) at the University of Cape Town – with support from Nedbank and SA Proptech – Proptech is defined as: “Tech-driven innovation that is related to buildings and the real estate industry at large. This is tech that influences real estate in terms of design, management, transactions, investment or use.”
The study said Proptech was redefining how the real estate industry operated and interacted, and evolving traditional practices and services using key technological advancements, many of which had been successfully adopted in other industries.
“There are many variations of these advances that tend to change and multiply at a rapid pace. However, we have identified three key areas of tech-driven innovation that are having a significant impact on numerous industries, including real estate. These are the sharing economy, the internet of things (IoT) and cutting out the middle man.”
Gil Sperling, co-founder and co-chief executive of digital property marketing platform Flow, says while innovation is not revolution, it can fuel it, and notes that, sometimes, it is “not about reinventing the wheel” but “adding the rubber tyre” to make life more comfortable.
“Proptech is evolution, not revolution... It is taking the South African property industry into the 21st century, evolving the process, rather than reinventing it. People still need to find homes, experience them and complete the reams of paperwork required to make their chosen property their own. Proptech hasn’t changed the path but it’s changed the process.”
He says performance marketing systems put the right properties in front of the right people on the social media platforms they interact with regularly, while interactive video tours help people safely visit properties – even on the other side of the world.
“One day soon, blockchain technology will exponentially speed up the paper-driven process of buying a home or getting vetted for rental credit.”
The adoption of Proptech was inevitable but the coronavirus-related lockdown pushed the industry there sooner. With safety a priority and restrictions on movement, says Johette Smuts, head of data analytics at PayProp, real estate agencies needed to “quickly adapt” to accommodate virtual client-facing processes to ensure that sales and leasing continued.
“For many rental agencies in South Africa that still relied on outdated processes to manage their portfolio payments, Covid-19 brought on a new urgency to adopt technology.”
The “long-awaited digitisation” of many business processes in industries and organisations around the world saw “tremendous spin-off benefit” for efficiencies, scalability (growth) and new products, and revenue streams.
“There’s a real concern that rental agencies choosing not to adopt Proptech solutions will be left behind and become vulnerable in this new virtual world, while their competitors are reengineering payments, document signing, property viewings and much more.”
In the property sales sector, buyers and sellers are embracing virtual viewings for “far more than just health and safety reasons”, notes Craig Mott, Cape Town regional sales manager for the Rawson Property Group. The biggest advantages to his technological adoption include:
• A low-risk sales experience as virtual viewing experiences narrows down a pool of potential buyers to only those who are seriously interested in a property and, ideally, qualified to buy it.
• Less disruption for sellers as they do not need to spring-clean and vacate their homes on multiple show house Sundays.
• Time saving for buyers as they can conveniently vet properties more effectively before visiting in person.
• Easier long-distance buying for those who are moving to new towns, provinces, or countries, and may not have the luxury of viewing a home in person at all.
These viewings are “a great way” for sellers to stand out from their competition, and tap into a much wider buyer pool than before.
“Virtual property services aren’t a flash-in-the-pan fad, and those who have not adapted to embrace the technology are going to find themselves falling further and further behind,” Mott adds.
Berry Everitt, chief executive of the Chas Everitt International property group, agrees that the digitisation of home viewing is the way forward for the real estate industry.
“While popular before, online house-hunting has been given an extra boost by the Covid-19 pandemic and the resulting increase in remote working, with many more people having more time – and more inclination – to scroll through the property portals in search of their dream homes.”
And with the ongoing advancement of new technologies, things will not go back to the way they were before, but rather, continue evolving.
“In the near future, for example, there is likely to be widespread adoption of immersive virtual reality technology, which will enable prospective home buyers using smart glasses or a virtual reality headset to feel like they are actually inside and walking around the property they are viewing online,” Everitt says. Even virtual staging, which digitally adds furnishings to an empty space, is likely to develop and become more realistic.
The Ureru report, written by Sean Godoy and Luke Boyle, states that Proptech has gained significant momentum in other parts of the world, and “we expect the potential for meaningful impact to drive the momentum of the Proptech movement in Africa.
“Proptech principles and trends are already having exciting and meaningful impacts in numerous ways, from crowdfunding – which could bring property investment to a much wider audience – to online estate agencies, and the rise of blockchain technology with its potential application to deeds registries on the continent.”