Across artificial intelligence, machine learning, even big data, engagement with these trends are key to staying competitive in a digitised world. However, in the current climate, the question is whether Proptech is the panacea for riding the wave of economic headwinds in play?
Sean Godoy, Founder, Diversity Property Solutions & Cofounder, PropDD is best qualified to answer this question. He has been extensively involved in formal Proptech research across South Africa and East Africa, and is the cofounder of the SA Property & Proptech Africa Associations.
Q: How does Proptech address the overall economic crisis or stimulate the economy?
Technology will never be a silver bullet for major challenges like difficult economic conditions. However, in the property industry it can help companies reduce costs and improve efficiencies, improving the bottom line. It also assists property professionals to be more productive and serve their clients in improved ways and boosts entrepreneurship, job creation, and opens up new markets such as the informal housing sector.
Overall, Proptech can provide the industry with new tools and services that can help them weather rapidly changing trends, capitalise on their wealth of experience and specialist skills, and create new business opportunities. This should result in industry growth, leading to a wider, positive economic impact.
Q: If not now, could Proptech be considered the saving grace of the future of real estate in SA?
Stepping back, technology is an integral part of daily life and business. In the property industry, it is not a parallel sector but an intrinsic part of how the industry operates. This has been the case since the advent of computers and property management software decades ago.
Change and innovation have accelerated rapidly though and its importance has only increased. Consumers and companies are demanding services and products in different ways, and any industry needs to keep close watch on these trends and adapt where needed.
A key point to come back to is that Proptech will not be a silver bullet for the industry. The fundamentals that drive property markets and the industry as a whole have not changed, and the role of property professionals is still key. These remain at the core of any worthwhile Proptech product.
Q: Does Proptech bring about improved predictability of the property market?
Data & analysis is an important area of Proptech, from market analysis to building analysis. In terms of predictability, no one has a crystal ball but the availability of enough quality data and the right platform can greatly improve decision-making and forecasting within the property industry. We have some great platforms in SA that serve this purpose.
Q: What are the types of Proptech that you can directly attribute to weathering headwinds?
Generally speaking, Proptech that helps landlords reduce costs, retain tenants, and maximise income are key. On the other side of the coin, Proptech that helps professionals and service providers be more efficient, reach more clients and serve those clients better can only be a win.
Basically, the fundamental goals of the industry and professionals alike remain the same; Proptech is simply providing them with new tools to achieve those. Areas such as property management, property transactions, marketing, work-flow management, tenant engagement, and market analysis all represent strong Proptech activity with a clear value-add. When you have this at your disposal, there are more options when dealing with challenging headwinds.
Q: How should adopters weigh the cost of Proptech to delivery efficiencies, and who does it benefit the most?
Any decision to adopt new tech should be informed by thorough cost-benefit and needs analysis. The Proptech solution at hand should help the organisation or professional involved save time, save money, and better serve their clients, and meet their specific needs. Sometimes one or two of these benefits will be sufficient, but often only the presence of all four should justify the adoption of the tech in question. Tech for tech's sake is not the right approach!
Proptech can have significant impacts in improving efficiencies across various functions of the industry, reducing costs and improving customer experience in most cases. Key functions include the property transaction lifecycle, property management, marketing, and data & analysis.
Ultimately, if it is worth its salt, Proptech should benefit every stakeholder that engages with it either directly or indirectly.
Q: Any stats to prove any of the points you make?
Stats on Proptech are limited in SA. However, the growth of the Proptech sector from under 50 Proptechs in 2019 to over 150 in 2023 demonstrates a clear growth trajectory and strong case for Proptechs adding real value.