Johannesburg – A new generation of real estate entrepreneurs in South Africa is transforming the property industry through technical innovation that could change the way homes are bought, sold and rented.
Like Uber disrupted the transport sector, these entrepreneurs will challenge estate agents to innovate as well with their investment into the so-called PropTech market.
Worldwide a trend is starting where new tech firms are cashing in on the demise of bricks-and-mortar businesses, taking advantage of clients whose property searches start online.
Neale Petersen agreed that Proptech was the new Fintech. Speaking at the Rode-REIM Real Estate Conference at Steyn City in Johannesburg, Petersen said there was a new wave of South African companies and entrepreneurs that are using tech to refine, improve or revive the services we rely on in the property industry.
The new wave of entrepreneurs believe PropTech has the potential to experience the same disruption FinTech created at its inception. The leap that technology have made, has also eased the management of real estate assets.
Because real estate is a very data-driven industry, technology can help streamline decision investors make based on the available data.
The first online property platform to enter the SA market Property Fox has grown exponentially.
“With Property Fox we imagined how we could approach real estate in a new way,” said founder Crispin Inglis. “Was it possible to replace real estate agents?”
The online property platform entered the market in April last year and offers sellers an end-to-end solution that include valuations and administration assistance. Inglis explained that clients could also pay a one-off R35 000 upfront fee or 1.5% commission
on the conclusion of a sale.
He said Property Fox was basically a hybrid of trying to sell your home yourself and an estate agent
“Our aim is to back up real estate sales with a tech platform, and that has transparency. We try to make as seamless as possible.”
Ben Shaw, CEO of rental disruptor HouseME said his business simply connected renters to landlords using the new platform that technology has created. HouseME’s focus is on the residental rental segment of the market and has already made remarkable inroads into the rental agencies traditional businesses.
“Unlike rental agencies, we do our rentals for 2,5% commission instead of the average 8% of the usual agencies, largely thanks to our tech,” he said.
Shaw, who was an investment banker in his previous life, said HouseME’s overall portfolio included 3 000 clients. It also allowed people to bid on housing.
“Ours is tech platform that is disrupting the industry,” he said. “We identified a broken system that needed to be fixed. We believe that agency model, is archaic and will transition one way or another. Some form of model will come and change the way rentals are handled. Ours could possibly be it.”
Scott Picken, founder and CEO of Wealth Migrate, said when technology does come to an industry, change and disruption is bound to occur. Using an online platform Wealth Migrate offers international investors direct access to real estate investment opportunities in global markets, including the US, Australia, and the UK.
Wealth Migrate believed in the past, the best real estate investment opportunities were only available to the richest 1% but thanks to disruptive technology, the market has now been opened up.
“Whenever tech comes, it cuts out the middleman, increases trust and accessibility,” said Picken.
Wealth Migrate also recently entered the South African property market offering the same online tools to ordinary South Africans.
Owner of My Bond Fitness and property conveyancing attorney, Meyer de Waal helps potentially buyers prepare adequately in accessing a bond.
De Waal also connects sellers with prequalified buyers using his PropTech business Attorney Realtor Hub, which Netwerk24 recently crowned as App of the week. De Waal said he wanted to emancipate attorneys from their “reliance on estate agents to bring them business.
He said attorneys who make use of the Hub tools were leveraging cutting-edge technology to offer sellers and buyers much greater value in the ‘full circle’ of the sales process than has traditionally been the case.
This article was featured in Fin 24