COVID-19 and Proptech 2.0

  One of the outcomes of the COVID-19 pandemic is that proptech has become more mainstream. Digital technologies have done extremely well in 2020 as users flock to online platforms and services to extract the benefits of staying from home. Whilst not deemed an essential service, renting is of particular importance to all who don’t own a home – as lockdown has prevented move-in and move-outs of residential leases.

Current and expected trends in the online real-estate industry

Industry slowdown

Already, revenue contractions of between 20 and 40% are being reported by agencies across South Africa. This impact is likely understated, as only in the latter part of March was SA in lockdown. We predict a 40-60% revenue drop across rentals for the next three months and 50-70% drop in sales over the same period.

Tech adopted

Zoom and Netflix are certainly the most widely acknowledged digital platforms that optimally geared for a situation like this. But within the property sector, there are also shifts taking place. Agents are considering life without their agency, which has pushed them to look towards platforms like HouseME. Landlords are reliant on digital communication, and tenants on digital applications – both of which HouseME has championed for years. As lockdown ceases in a short while, agencies will be widely affected by a changed operational model.

User behaviour

Not only are is society online, streaming more videos and browsing social media more than ever, but it’s also using the time to learn about new courses, read books and educate themselves on new processes. Adoption rate of new products is improving, which coincides with the push from a number of property technology companies to follow user behaviour more closely. Small focus groups, and web traffic heat maps are leading to more careful product selection and UI. We have already started championing digital home viewings which have been well received with both landlords and tenants.

Fear of failure

At a time like this, risk of loss of income is a shared fear of both landlord and tenant. In just the first week of lockdown, two new insurance policies for rental protection had been marketed. HouseME’s rental guarantee stands head and shoulders above its peers in both pricing (five times cheaper than the new policies hastily crafted) and performance (which includes letters of demand automatically). We also spend time advising tenants on their affordability – and liquidity – to avoid the risk of default as best as possible.

Paradigm shift

Life won’t go back to normal for a very long time. Incomes will be under pressure which means that costs come under scrutiny. It would be fair to say that one of the biggest advantages to proptech is the relative cost savings compared to traditional agencies. At just 2.5% HouseME is serving a larger and larger database of landlords who want to extract maximum yield from their property investments.

Please note: Pricing changes were implemented as of the 10 September 2020. More details here.

HouseME can assist with the shift

If you’d like to rent smart with HouseME, register here. Find out more about our Rental Guarantee here, and stay safe out there!