As is the case in almost every industry, the internet and technology in general have substantially changed the game for the South African residential real estate industry, with many if not most of the innovations seen globally in this space embraced by estate agencies locally, says Dr Andrew Golding, chief executive of the Pam Golding Property group.
“According to the National Association of Realtors, in the United States – which has led the way technologically as far as the residential real estate industry in concerned – 90 percent of consumers now begin their real estate journeys on the web. And we are seeing similar trends here in South Africa.
“In addition, the California Association of Realtors says more than eight out of 10 home buyers are accessing home information on their smart phones and computer tablets in a trend to mobile which is also mirrored in South Africa, and probably set to increase even further as our access to more bandwidth improves.
“Speaking of bandwidth, according to a recent Wall Street Journal report, the availability of fast internet service is starting to become a major factor in Americans’ decision to buy a home. A recent study released by researchers at the University of Colorado and Carnegie Mellon University found that fibre-optic connections, the fastest type of high-speed Internet available, can add $5 437 to the price of a $175 000 home — about as much as a fireplace, or half the value of a bathroom.
“This is to some extent being mirrored here in South Africa with the introduction of ‘fibre to home’ across entire suburbs, such as Parkhurst in Johannesburg, and in the process, undoubtedly adding value to the suburb itself and the properties within it. Such features are also being incorporated as ‘standard’ in many new upmarket developments such as Steyn City and Park Central in Gauteng.”
Dr Golding says also in line with global trends for real estate agents themselves here in South Africa, technology and in particular mobile apps are innovations that are becoming increasingly popular tools to increase efficiency, competitiveness and most importantly, to give an added value service to clients .
“For estate agents, the use of tablets for presentations to clients is now commonplace, giving real time listing information and enabling quick and easy storage of notes, templates and presentation discussions. Some companies now have proprietary software that facilitates e-mail reports to sellers and follow-ups with buyers regardless of the device they might be using.
“However, one interesting technological innovation that has not yet reached our shores from a real estate perspective is Google Glass. The high-tech Internet-powered computer, which is worn like a pair of eyeglasses, debuted to the general public in the US recently, at a unit cost of $1 500. But well before its full-fledged consumer launch, it had already begun trickling into the real estate industry, particularly on the residential side.”
For example, last June (2014) real estate company Trulia, launched an app for ‘Glass’ which allows users to see alerts about nearby for-sale apartments while walking around a New York neighbourhood. Users can also browse photographs of homes, save a listing and contact an agent through the app.
Vivaldi Real Estate, a Manhattan-based residential brokerage with several clients in Italy, has used Google Glass to give buyers who cannot visit a property a virtual tour. The device transmits what the eye can see through a video feed, similar to Facetime or Skype.
Adds Dr Golding: “Whether or not this particular innovation takes hold in South Africa remains to be seen but what seems certain is that the pace of technological advances is set to accelerate exponentially in the coming years and that residential real estate – being the multi-trillion dollar industry it is, is likely to benefit.
“The big question, of course, is whether or not these technological innovations will lead to significant changes to the role and function of the individual estate agent. As is the case with many other industries, some argue that some degree of disintermediation by technology is inevitable.
“Another view is that unlike the disintermediation of the travel industry, for example, where direct booking on-line is commonplace, the real estate industry finds itself in a world where house prices are typically three to five times the annual household income of the buyers, a home purchase is significantly more complicated and risky than booking a vacation and residential property is as distinctly individual as the people who buy and sell it.
“To date, there is no technology that can overcome this fundamental fact and mitigate the risks associated with it.”