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Vivian Warby vivian.warby@inl.co.za
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Hi-tech boost for property industry
Letter from the editor WE LIVE in a wonderful world where so much is possible. Nowhere is the new more evident than in technology. I remember using my first computer in the early 90s thanks to my then IT partner. I also remember being enthralled by his email and how he was able to keep in touch with a Dutch colleague via this new form of communication. Fast forward a decade or so and we are FaceTiming with loved ones in different cities and doing virtual tours of the ancient Greek ruins. The upward trajectory of technology has changed how we as humanity function in our everyday lives. We even have devices that can monitor how many steps we take in a day. In fact, tech knows more about us than we know about ourselves. Nowhere has the new world been more exciting than in Proptech. This has reshaped the property world, a world that has sometimes been slow to change, preferring the safety of the known. And we are only at the beginning. I believe we are still going to see major strides in technology that will completely alter the way we interact in this market. As it stands, digital technologies with the ability to change the lifecycle of real estate assets are already here, including blockchain and AI. Add in tokenization and we are talking a whole new world. Globally we have seen how cryptocurrency can be used to pay both rent and the purchase price of properties. It’s still early days. Tokenization, simply described as the process of creating a virtual token to represent ownership of a real estate interest, is also a new development, allowing people to invest in homes in the US for as little as $5 – $10 (R150). The last year of lockdown has seen change happen faster out of necessity, and technology and communication are delivering solutions. In the next five years, tokenization, according to reports, is expected to yield a whopping $4.2 billion for the global real estate industry. It may feel like we are experiencing a lull right now, but know a new world is coming fast. In this new world the candy store is full with old and new ways of doing things... and it is replenished frequently. Take your pick. It’s all valid. Have a great weekend
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Pandemic hastens uptake of new technologies in the sector BY BONNY FOURIE bronwyn.fourie@inl.co.za
Technological advances will allow buyers viewing properties through a virtual-reality headset to feel as if they are inside the home.
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ROPERTY-RELATED technology, commonly known as Proptech, was the buzz concept just a couple of years ago but now, with the help of lockdown, has become the 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 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. In a 2019 report produced by the Urban Real Estate Research Unit (Ureru) at UCT – 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. He 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, estate agencies needed to “quickly adapt” to accommodate virtual client-facing processes to ensure 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 re-engineering 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 the adoption of this technology include: • A low-risk sales experience as virtual viewing experiences narrow down the 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 effectively before they visit them in person. • Easier long-distance buying for those who are
moving to new towns, provinces or countries and might 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-inthe-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 virtualreality technology, which will enable prospective home buyers using smart glasses or a virtualreality 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.”
DISCLAIMER: The publisher and editor of this magazine give no warranties, guarantees or assurances and make no representations regarding any goods or services advertised within this edition. Copyright ANA Publishing. All rights reserved. No portion of this publication may be reproduced in any form without prior written consent from ANA Publishing. The publishers are not responsible for any unsolicited material. Publisher Vasantha Angamuthu vasantha@africannewsagency Executive Editor Property Vivian Warby vivian.warby@inl.co.za Features Writer Property Bonny Fourie bronwyn.fourie@inl.co.za Design Kim Stone kim.stone@inl.co.za
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