Real estate is set to become one of the most disrupted industries in Australia and New Zealand, with 82 per cent of real estate jobs at risk of digital disruption by 2032 compared with 44 per cent of Australian jobs generally.
Although 2032 may feel a long way off, the effects are already being felt now. The way 52 per cent of our businesses are structured today has already changed significantly due to technology, allowing for improvements in efficiency and reduced costs.
While introducing technology that reduces costs is a no-brainer, the next wave of change for agents requires greater imagination. The next wave – which is already upon us – requires a re-imagining of traditional business models to put customer expectations, not business comfort, at their centres.
There are five major technology trends that are already being felt by real estate agents and property finance professionals and which need to be navigated now. These are:
1. Mobile – gives consumers access to information anywhere, any time, on any device, which is changing expectations about information accessibility and response times while also increasing distraction levels.
2. Cloud computing – provides software-as-a-service (SaaS) platforms that are increasingly connecting to each other, allowing information and data to ‘hand off’ without human intervention while dramatically reducing the costs of software, integration between service providers, and rapid experimentation with customer needs.
3. Connected communities – providing the capacity for individuals to gather around topics of interest, outrage or geography, spontaneously and broadly through the phenomenal rise of social media, which has changed expectations of unflinching accountability and high service levels.
4. Big data – the unprecedented levels of data and information now available to be incorporated into individual businesses are delivering insights and analytics that dramatically change how businesses make decisions, grow and provide ever-greater levels of customisation to clients.
5. Electronic servants – the marriage of the Internet of Things (IoT) with artificial intelligence to collect data from previously inanimate objects is automating time-consuming tasks and creating another level of big data and analytics.
In turn, these technology megatrends have changed human behaviour, increasing our capacity to absorb information and complete tasks in moments that were previously considered down-time. They are also raising our expectations of what constitutes good service while lowering our tolerance of poor experiences and reducing the time we expect to spend learning new skills. And all of this is occurring in a world where mass communication is completely democratised.
In such a world, the business model for real estate agents and property finance professionals needs to adapt, moving away from being a single commission payment for the service of marketing a home or determining a mortgage, with high stress and low confidence.
In its place, a multiple payment model from a portfolio of services that deliver the outcome of a successful move from one property or lifestyle type to another is evolving. This will be done in a way that is focused on maximum value, low stress and high confidence and a range of service options that can be customised to meet the individual needs of each customer.
To execute these strategies, both real estate and property finance businesses will enter partnerships and service delivery relationships that deliver best-of-breed experiences both to customers and to their own staff. They are providing end-to-end service for their customers through the whole ‘journey’, not just for what was traditionally the scope of their service.
To these ends, property and finance professionals need to embrace a range of new communication deliverables via their websites and social media strategies that give potential customers transparency around the sales, rental and property management processes and an understanding of the value proposition being offered.
The challenge for business owners and CEOs is to focus not on the technology itself, but instead on rigorously managing change programs with staff as they eliminate business pain points. In the not-too-distant future – we are starting to see the effects already – business differentiation will be determined not just by the services offered, but also by the speed to execute new innovations in service and an ongoing mindset of change through ‘build, measure, learn and repeat’.
Are our property industries up for such a challenge?
Ever since mobile phones first became mainstream 20 years ago, property industry leaders have shown themselves to be early adopters. They are quick to embrace new technologies that improve efficiency and deliver higher-than-ever service levels with an entrepreneurial zeal in response to changing customer behaviours. History indicates that the answer is yes, but the time to begin was yesterday.