There are a number of disruptors that are set to shape and change the South African property market in the year ahead.
This is according to Linda Erasmus, CEO of Fine & County Sub-Saharan Africa.
Erasmus identifies them as: the change in buyer behaviour, the control of data, the shift in media platforms and the entry of young dynamic individuals in the property market.
So, just how will these disruptors change the industry?
1. Buyer behaviour
Erasmus believes that when it comes to buyer behaviour, there are certain points that the industry needs to take note of and cater or adapt to. For example, the fact that today’s buyers search online to compare not only property prices, but also different benefits associated with schools, suburbs, convenience as well as value for money.
“Buyers want information quickly and easily, they want a response immediately and if there is a voice inside the computer responding, it makes them even happier. Chatbots have become popular in the UK, and most of Fine & Country’s properties abroad offer interaction with chatbots. We hope to see this engagement with potential clients soon in South Africa,” says Erasmus.
Added to the above, she says potential buyers are less concerned with sales talk and more interested in real facts, hence the fact that the only interaction they seek with the estate agent is making the appointment.
“This, however, does not eliminate the estate agent from the process. The interaction with the seller and their product will become more and more important as all facts and figures should be available to the potential buyer online. Estate agents will have to put more effort into qualifying the information on the product that they offer online. The more data that is available, the better it is to capture a bigger audience - a quick listing will no longer be sufficient, and estate agents will have to focus on better photos, better script and the ‘full monty’ on information of the property,” says Erasmus.
Erasmus believes that the entire real estate industry should stand together to re-educate the homeowner who is selling their property.
“Buyers are tired of viewing one home, ten times over on one portal. While one of the ten adverts for the same property may attract a potential buyer, it is five of the other adverts that normally convince the buyer not to continue with viewing the property. In future, the buyer will be more in control of the process,” she says.
2. The control of data
Erasmus says data needs to be ‘set free’.
“The custom of keeping information to oneself is no longer relevant or beneficial. With so many millions of people looking at the computer screen all over the world, data needs to be ‘on the screen’ to be seen.”
3. The shift of media platforms
The newspaper has not disappeared, you can read it now on your screen. The internet has many different faces, from Facebook to blogs and everything in between. The real trick, according to Erasmus, is to interact with a worldwide audience on the right platform for the right product. If no one responds, no one wants your product.
“Many estate agents are still stumbling around and finding their way when it comes to dealing with the different platforms in order to maximise opportunities,” she says.
3. The entry of younger participants
Real estate needs energy. Today many young people see the opportunity of getting paid for hard work. It is not an easy industry and demands long hours and late nights.
“But, younger participants are equipped to use the modern software available to respond quicker, set data free and provide accurate data - an exact match with the requirements of today’s buyers,” says Erasmus.
What do these disruptors mean for the industry?
According to Erasmus, the positive effects that these disruptors will have on the industry include real estate becoming more customer-oriented and less agent-oriented.
“Agents will have to spend more time with one property to collect proper data from the seller. All in all, this means that the competition, including the chatbots and smart software, will be fiercer, and agencies will have to work in teams to perform better. The commission paid by the seller will be divided by different individuals who assist with many more steps of a sale. One agent will not be able to do all of this on his or her own,” says Erasmus.
On the downside, Erasmus points out that job creation in our country is important, and not all entrants into the real estate market are fully equipped with the skills to use the technology.
“There is also a large amount of fear of change, which so many estate agents and principals are still guilty of,” she says.
So are online agencies the big disruptors of modern real estate?
“There is a misperception in the market place that these companies are disrupters. Disrupters are innovators, and as Harvard Business School professor and disruption guru, Clayton Christensen, says, disruption uproots and changes how we think, behave, do business, learn and go about our day-to-day - “it displaces an existing market, industry, or technology and produces something new, more efficient and worthwhile”.
In Erasmus’ opinion, online estate agencies don’t achieve all this.
“Anything offered cheaper has always attracted customers, it does not matter what you sell. Discounted services don’t always work for all customers. Some years ago, Property.co.za started off as an online agency. In my humble opinion, this company was perceived to be an online agency at first. It did not take long before they opened offices, same as the traditional agencies, recruited agents, same as the traditional agencies and started to advertise in printed newspapers,” says Erasmus.
“Lead Homes, the so-called disrupter in the industry charging R40 000 on average per transaction, has started off with a bang due to a substantial cash injection into the company. This company, however, also advertises on billboards, same as the traditional agencies. They now also hire estate agents and provide the same kind of advertising that the traditional agencies do for their agents. ‘For sale’ boards are displayed in front of homes, same as traditional agents, and the methods of photos, script, internet and online platforms used are similar to the traditional agents.”
Erasmus says while these kinds of companies use a smart way to enter the market, they will survive only if they can attract a mass audience.
“There is a big difference between buying household goods online and buying a R10 million home online. These agencies face the same challenges as traditional agencies in terms of the real industry disrupters mentioned above. The question is, will they respond quickly, will their data be correct and substantial, will they set that data free and will they attract young, knowledgeable individuals to work for them?”
Just as cell phones did not exist one day and the next it was almost as if we never lived without it, so will the spreading of data by the use of technology techniques change both the customer and the industry, says Erasmus.
“While we think the world around us has changed, we realise how it stayed the same. The customer has always been king and will always be. As long as we know how to serve the customer best, our business will flourish. The tools of the trade have gone from manual to automatic, working faster and harder in a shorter amount of time. Service may come cheaper, but ultimately, it is the quality that counts for the end consumer.”