Proptech is the application of technology to develop new ways of conducting business in the property sector. Proptech is to property what fintech is to the finance industry - often increasing efficiency, access, diversity and impact.
Proptech was already an established trend in the South African real estate industry before the Covid-19 pandemic, with most agencies including video walk-throughs in their online property listings. But, since the start of the lockdown in March 2020, even agents who previously resisted the trend have adapted and embraced the latest technology so as to keep in business.
Many of the temporary measures necessitated by the Covid 19 restrictions are likely to become permanent. These include:
• Live digital viewing of homes rather than traditional showhouses.
• Virtual communication methods like Zoom and those with verbal feedback.
• Apps offering autocue or teleprompt for cellphone cameras. Other technologies that have been effectively applied in the real estate market include Internet Of Things (IoT), artificial intelligence (AI), virtual and augmented reality (VR and AR), drone technology and 3D printing.
• IoT (Internet Of Things) is used in connecting devices to the internet. It started with machine-to-machine communication and has evolved as a useful device-to-organisation tool.
• Artificial Intelligence (AI) takes data analytics and cognitive computing to the next level. It enables computers to predict, infer, and in some ways, think and learn by experience much as humans do.
• Virtual and augmented reality (VR and AR) help integrate online and real world experiences.
• Drone technology - A drone can give you 360 degree aerial shots of the property, providing a visual map of the site and surrounding neighbourhood as if you were viewing the property in person. Drone technology is a proptech application that keeps growing and developing, adding benefits for agents, buyers, sellers and investors.
• 3D printing – This technology has long been used in medical and military applications, but the application in the real estate industry is still relatively new. However, 3D concrete homes have already been printed in China, which helps provide more affordable housing for all.
The adoption of ‘disruptive technologies’ is on the rise in South Africa and many start-ups are working to take this sector forward. Several of the traditional real estate agencies are paying attention to the disruptive start-ups that are changing the way the real estate industry operates. These new start-ups have created innovative new ways of buying, renting and selling property online and the larger brands are snapping them up so they can revitalise their own businesses. In 2018, Pam Golding Properties purchased Eazi.com, an online portal for property sales, as part of its goal of adopting a hybrid estate agency model. Another 2018 acquisition was the purchase of online estate agency, Steeple, by disruptor PropertyFox, which in turn sold a 49% stake to SA Home Loans.
Other proptech ventures that have received investor attention include HouseME, a digital letting start-up that secured a multimillion rand deal, and fresh tech start-ups like My Bond Fitness and Wealth Migrate, an online marketplace that allows users to directly invest in a property suggested by the website itself.
Enhancing agent efficiency
Proptech advocates emphasise that the use of technology is not intended to replace estate agents, but rather to empower them to carry out their work more effectively.
For instance, instead of staging a home for a Sunday showhouse, agents can optimise online viewing options, including live media platforms like Facebook Live and YouTube. During the walkthrough, agents can highlight spectacular views, designer kitchens and notable fixtures and fittings. They can also take live questions from viewers and provide answers audible to everyone who is listening. The walkthrough can be recorded and repeated whenever necessary, enabling agents to reach significantly more people than would attend a traditional showhouse.
As proptech keeps developing and expanding, advancements will help keep the real estate industry viable and sustainable. The possibilities are seemingly endless.