In an industry which saw little transformation for the last 50 years or so, the real estate sector has experienced dramatic and unprecedented changes within the course of just one decade. We’ve seen notable transformations in every facet, from the way in which we operate and conduct business to the customer’s experience. It’s not only the changes themselves that are important, but also understanding what precipitated them and what they mean for the industry and the broader market. This will help us to better prepare for the future and enable both property professionals and consumers to better navigate a quickly evolving sector and to reap better returns across the board.
These are some of the most important and influential changes in the real estate market during the past 10 years:
The growth of the internet
Not that long ago, the only way to search for property was to buy the weekend newspaper and then go out and meet the agents and traipse through an untold number of homes. Thanks to the advancements in technology, we can now search for and buy almost anything from the comfort of our own homes. So, while most people still prefer to view homes in reality before making a commitment, most of the initial searching is now done online to narrow actual viewings down to a short-list and agents are sourced and contacted digitally. Moreover, properties can be marketed to a much wider audience – internationally even. And with technology rapidly evolving, it’s essential for property professionals to stay abreast of the changes in order to not be left behind and to remain competitive.
Consumers are more educated about real estate
This is largely due to ease of information access on the internet and people are now much more au fait with their local property market, new trends, and the transaction process than ever before. Most people looking to buy or sell property will begin the process online, doing comparative shopping, researching the market as well as the property agencies in their preferred areas. As a result, property professionals really need to know their stuff these days and to make sure they stay abreast of all property-related issues, including the economy, property market, trends, legalities and real estate regulations.
More real estate regulations and increased transparency
During the past decade, many new laws and regulations have been promulgated and numerous others were amended. As a result, a greater level of transparency has been brought to the real estate industry. These regulations not only protect, but also secure the rights of all parties, including homebuyers and sellers, property professionals and developers. We can expect to see more amendments as regulations and laws will continue to adapt to an increasingly dynamic industry.
The construction boom
Globally, one of the unforeseen changes throughout the last decade was the flourishment of construction and, in South Africa, this was especially evident in certain areas and sectors. In Cape Town, the CBD skyline has been dominated by cranes for at least a decade in response to the growing popularity of the city as an investment destination and the growing demand for city living. Having tapered off during the pandemic, building is picking up again and, with Cape Town perceived to have better governance than the other provinces, construction is unlikely to abate any time soon.
In Sandton, we saw burgeoning construction, especially in the sectional title sector, in response to the seemingly insatiable appetite for apartments in the Sandton CBD, however, the demand has since dwindled as a result of rampant development and oversupply, and the market has cooled considerably. Country-wide, we’ve seen a spike in the construction of security estate developments which caters to people’s increased need for security and also the increased lifestyle priority. Both of these factors, underpinned by the growing prevalence of remote working, have also precipitated a spike in construction and development along the coast, especially on the Garden Route and north of Durban.
Consumers have more options
It used to be that we generally had a choice between a suburban house or an urban apartment with a few blocks of townhouses thrown as alternative options, however the property landscape has expanded dramatically in recent years, especially during the past decade. Not only have clusters and estate developments of all sizes been added to the mix, there are also micro apartments, minimalistic low maintenance properties, smart homes, traditional character houses and even lifestyle farms. The retirement sector has also seen major changes with the traditional concept of apartment block-styled old age homes which offer little more than a roof over one’s head and three-square meals a day now falling far short of these buyer’s needs and expectations. Modern retirement options centre on offering a quality lifestyle in a secure community for mature people, with many now accepting residents from the age of 55.
The silver tsunami
Whilst we may not yet have discovered the long-coveted elixir of eternal youth, the truth is that humans are now getting older than ever before. We are living longer, working longer and, as a result, the 60-plus age group is far more active and independent than their predecessors. This population sector is in fact the fastest-growing consumer group in the world and it’s forecast that by 2050 their numbers will have swelled by an additional billion, which means they will account for one in five of the population. Armed with an increasingly higher spending power and a growing share of overall income, they are quickly becoming key influencers for many corporations and industries.
The millennial influence
And it’s the millennials who are leaving the biggest footprint on the industry. Not only are they now the largest buying group, they’re waiting longer to buy a home and many of their needs are very different from any of their predecessors. As a result, they’re changing the way homes are chosen and even the property landscape. When looking for a home, they prioritise factors like good internet connectivity and living within an easy commutable distance from work or college. Born in the age of technology, millennials are often regarded as the smartest and most educated generation, they will do extensive online research and expect clean, simple and quick transactions. They generally don’t respond well to old fashioned sales techniques and prefer concise texting for day-to-day communication.
Although smart features were available a decade ago, there were only a few options that were mainstream. However, entire smart homes are now increasingly common and in the implementation of smart technology is becoming increasingly commonplace. Home automation is likely to proliferate further, allowing home owners to regulate their home electricals and appliances with the click of a button, along with ensuring safety.
In the face of all the changes and advancement, it’s important that we don’t forget the value in good customer service as well as human interaction. Technology should enhance our business and lives, but we should also use it to our customer’s benefit and to make their experience a seamless and memorable one.