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Growth is well and truly in the trajectory of real estate’s BNPL providers. But what else is the industry expecting over the coming years?
With a majority of BNPL players only having been around for two to three years — some even less — there’s clearly plenty of room to grow.
As we move into a post-pandemic world, where agents are better prepared to take on technology and innovate, the options for expansion appear to be exponential.
So, what are those already in the sector expecting from the future? Here’s what the BNPL sector is predicting:
- Growth and greater adoption
Expectations of growth are a clear theme among all BNPL players operating within the real estate sector.
Much of this is expected to be driven by vendors, who are likely to be asked to fund any number of pre-sale services, thanks to their ability to achieve higher sale prices, according to SaleFunder’s Lucas McEntee.
With real estate agencies “always looking for better ways to gain efficiencies for their business”, Domain’s Tony Blamey adds that renters, vendors and developers alike are all getting more and more used to financial flexibility as part of this journey.
ListReady is another provider that’s recognising a growing demand for pay-later services, and has high hopes for the real estate financing space’s future.
Its national sales manager, Julian Antonescu, goes so far as to express an expectation that BNPL in real estate “will follow the paths of other products, such as Afterpay and ZIP, who have had major successes in the retail and fashion space”.
- Increased sophistication through technology
Innovation in the space will drive improvements to real estate financing, according to Commission Flow’s Justin Steer.
He expects improvements to occur both in terms of payment offerings and integrated digital delivery.
IT advances will also play a part here in boosting the productivity and performance of agencies.
The trick, according to Mr Blamey, “will be making sure the options out there deliver the right offering for both parties in the transaction”.
Sophistication of the industry will bring with it more and easier options for vendors, and lead to deeper integration with agency software, according to CampaignAgent’s Seth Watts.
The effect? Management will become cheaper and simpler and, in turn, further promote growth and uptake of such services.
- Consolidation
“The industry is in a sort of gold rush right now,” comments Mr Watts, who has observed a number of small companies joining the market.
“We expect the market to consolidate over the next one to two years as the costs of financing and technology development drive economies of scale.”
- Better partnerships
Alongside his forecast for growth, Mr McEntee is expecting finance companies to become better operators within real estate’s BNPL space.
He predicts that in the future, finance companies will enjoy closer partnerships with agents and brands, in a way that will better service “their unique offices’ needs”.
- Stronger regulation
As the market matures, Mr Steer expects regulation to become more important — to protect both the agency and the vendor.
While this could be misconstrued as a negative, he believes that “with regulation comes access to higher-quality, better-performing financial options”.
In light of all of the above expectations, and combined with the forecasts for BNPL growth more broadly, Mr Steer sums up the BNPL real estate sector well: “It is an exciting time to be in the space, as the future is bright for those who can continue to evolve to meet current and future agency and vendor expectations.”
What does the BNPL revolution mean for real estate? Read more below!
Part 1: The BNPL revolution: What does it mean for real estate?
Part 2: Why pain points are so integral to BNPL’s recent success
Part 3: Who’s who? Revealing BNPL’s biggest real estate players
Part 4: 7 ways agents, vendors and businesses can all benefit from BNPL
ABOUT THE AUTHOR
Grace Ormsby
Grace is a journalist across Momentum property and investment brands. Grace joined Momentum Media in 2018, bringing with her a Bachelor of Laws and a Bachelor of Communication (Journalism) from the University of Newcastle. She’s passionate about delivering easy to digest information and content relevant to her key audiences and stakeholders.
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