What does the future look like and who will survive?
The digital revolution has changed literally every sphere of our lives. Business models have been disrupted in practically every single field of enterprise. The real estate industry is not exempt.
“Every reputable estate agency today has a digital footprint,” says Paul Stevens, CEO of Just Property. “The innovations work as well for our clients as they do for us. We can use our website, newsletters, blogs and social media presence to educate and inform buyers, sellers, landlords and tenants. In the past, clients’ entering the market felt a sense of trepidation due to their lack of knowledge. Today, they can access our website or any of our online communication vehicles and use them to understand what is happening in the local property market. Knowledge gained from interactive education programs, like Just Property’s Your Property Journey, goes a long way towards alleviating stress that new buyers, for example, can experience.”
With studies showing that 92% of all buyers and renters browse online before viewing potential homes, it is clear that marketing on digital platforms is essential for everyone in this business, and the firms that use up-to-the-minute technology to expand their services to clients are the ones that will attract clients. Chris Greenwood, CTO adds that “Just Property has embraced the power of technology and the premise that ‘if you can dream it, we can build it’’. For example, www.just.property has an intelligent user interface that tracks search criteria and automatically presents updated property results the next time the site is visited. It also has a property comparison tool that allows users to review up to three properties side-by-side.
What does the future hold for the digital real estate landscape in South Africa?
Stevens says, “We have found that South Africans will look at available properties online, but the majority still prefer to deal with a person when making the big decisions involved with property deals, whether they be sales or rentals related. It is sensible, then, to deal with a property professional who is working in our best interests, and has the experience to negotiate the best deal for us while guiding us through the steps of the process. At Just Property, we do not believe this preference will change. But we expect to see a rise in online agencies testing the market.”
“South Africa already has two online agencies, namely Propertyfox and Eazi.com. They are very similar to the International models like Purplebricks. These models do have their place and there are more of them appearing all over the world, but they require enormous capital investments to get into the market. Purplebricks has entered both Australian and American markets and have been approached to come to South Africa. They declined, saying our market is too small. That said, international brands like Keller Williams have seen value in our local market in the recent past, so the possibility of expansion of international, online brands cannot be ruled out.”
Stevens says that most of the focus of these business models is selling houses. In the rental space, online agencies such as Rentberry.com and Cozi.com are starting to penetrate the American rental market. With their target markets being property owners who rent out their units privately, they offer basic listing, credit check and documentation services for these landlords. Locally, House.Me offers similar services. “And don’t forget that PrivateProperty.co.za, when it launched, was based on the private seller model,” adds Stevens.
Private Property and Property24 are not just two of South Africa’s most successful property portals where agents and private individuals may post properties for sale or rent; they are two of South Africa’s most successful websites. Are property practitioners concerned that these portals may move strongly into the online agency space?
“The success of the online portals is based on the fact that the majority of real estate agencies now pay a fee to list their ‘intellectual capital’ (property listings) on these portals. To overturn this business model, and begin charging commission would be to be to enter direct competition with real estate agencies. It’s likely the portals would face losing the advertising/listing revenue they’ve relied on this far from agents,” Stevens notes.
Stevens may be referring to the time when agencies banded together in the past. When newspapers pushed their advertising rates up beyond what was believed was reasonable, the top agencies in the Cape stopped advertising, and started their own Property Pages. These have since been re-incorporated into the newspaper/s concerned, but those agencies still own a percentage of the Property Pages as published in the weekend papers.
That said, innovations that disrupt industries often work for the good of society as a whole. “The traditional way of selling properties is forever changed but there is still a great need in property transactions for human contributions, for the insight and expertise that only estate agents can bring,” concludes Stevens.
“The agencies that survive the digital disruption will be the ones offering excellent, personal service and the peace of mind that no website can match and who match that service with effective technology that works not only for profit but for the good of their clients. That’s our road map to the future at Just Property, and our clients are extremely happy to join us for the ride. Just Property is expanding rapidly due to demand, and new franchises open regularly. We strongly believe our investment in our technology as well as in constantly educating our agents and our clients is the right mix for the future. With this mix, we definitely see our current growth continuing into the future.”
For more information on Just Property please visit www.just.property or call (087) 004 0149