|After a decade of unprecedented change in the property world, one of the frontrunners of property disruption in South Africa, PropertyFox, predicts a continued evolution in the 2020s.
The digital-first property company predicts kitchens declining in importance in the home as the ‘order in’ culture continues to boom. Also predicted is a shift in ownership structures with private companies buying up or building entire neighbourhoods and playing long-term landlord.
Crispin Inglis, CEO of PropertyFox, says, “We have reached the end of a decade filled with property industry disruption. We saw homes sold online for the first time, with low commissions shaking up traditional notions of how property should be bought and sold. We saw property valuations calculation by algorithm and large listing portals replace traditional advertising.
There were big changes in property itself, with the rise of the Airbnb model seeing houses decorated for the dual purpose of living there – and renting.”
Here Inglis lists some of the trends to watch in the 20s, due to the rise of fast-growing megacities in emerging economies and shifting demographics like a burgeoning middle class.
1. GROWTH OF THE 3D OR DIGITAL SIMULATION HOUSE
You’ve assembled your 3D-printed, factory-built, flat-pack home and hooked its tech ‘twin’ – a digital simulation of the house – up to the cloud to monitor real-time data and make adjustments accordingly (like automatically turning on the geyser to warm up by your normal shower hour). Going green is the order of the day. Your solar system is a point of pride in your carbon-zero smart-home. No eco-shaming for you!
The Financial Times predicts the way we live will start to change quite rapidly. The digital simulation ‘twin’ of your home will affect real-time changes in your physical, factory-built house, based on the continuous data it receives. Imagine living in a house which puts the coffee on for you in the mornings!
2. NEW TECHNOLOGIES
While online listings have been around for a while, data-centric approaches such as those employed by PropertyFox are likely to become more commonplace. As more millennials enter the market for homes, consumer expectations have shifted to on-demand experiences in the way individuals purchase and sell goods – and this will include property. 2020 will see real estate companies, such as PropertyFox, using big data and machine learning (ML) in smarter ways to make consumers’ experiences even more seamless.
3. THE RISE OF SECOND-TIER CITIES
Known as second-tier cities, metropolises outside the capitals will experience exponential growth as corporations move to more affordable locales. In turn, this will see the urban populations in these cities grow as families opt for locations that offer residential real estates that are close to work, schools and social spaces.
Millennials, specifically, are looking for areas where they can enjoy all the benefits of suburbia while being close to city attractions, entertainment and other services. Another trend that we may see play out is corporations ‘running hoods’. With real estate set to get even more expensive, private companies may become landlords, with a significant increase in the ‘build-to-rent’ sector. Google’s sister, Sidewalk Labs, is already designing a connected neighbourhood.
4. GENERATIONAL SHIFTS
PwC’s report indicates that the middle classes are set to grow by 180% by the year 2040, largely driven by millennials and Generation Z. Both generations are riddled with student debt so smaller spaces and affordability will be key to their real estate plans, especially in the current tough economic climate. Older generations reaching retirement age are also looking to downsize and save costs, which adds to the demand for starter homes, smaller spaces and affordable inventory.
PwC suggests homes will get increasingly specialised – professional homes may no longer have kitchens (good news for Mr D Food!), while retirement accommodation will diversify.
As urban populations increase, sustainability is becoming more of a challenge. The Food and Agriculture Organization of the United Nations reports that the world will require 50% more energy, 40% more water and 35% more food to sustain the population in 2050. It impacts significantly on the real estate market, where home buyers are looking for property that is based on eco-friendly principles and includes renewable energy and waste-reduction technology. So, adding solar panels, triple-glazed windows, and other sustainable measures may be a smart investment! It’s likely smart eco-homes will increasingly become symbols of status in the future.
6. HUMAN-MACHINE COLLABORATIONS
Increasingly, there’ll be a hybrid between the human reassurance of estate agents with the data-driven expertise of machines. This will eliminate admin and paperwork and up efficiencies, enabling a seamless client experience. Perhaps soon, lifelike avatars will guide prospective buyers through virtual homes!
Right now, PropertyFox’s Agent model sees agents utilising its tech platform and data to provide hyper-accurate valuations and a smart sales journey. This hybrid approach sees homes sell in 36 days on average – 64% faster than the national average. Going forward, we’ll see more of this kind of innovation in the buying, selling process.
Inglis adds that now and in the future, data-led valuations are key to moving homes in a suppressed South African market.