Written by Ben Shaw, CEO and Co-founder at HouseME, Smart Property Rental for Landlords and Tenants.
Reading Time: 5 Minutes
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
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.
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.
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.
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.
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.
HouseME can assist with the shift
Ben Shaw is the CEO and Co-founder of Proptech Company, HouseME, Winner of Seedstars World’s Best Start-Up Company in Cape Town.
To Sign up with HouseME as a Landlord or Tenant, Click Here.
HouseME’s Co-Founders, Ben Shaw and Kyle Bradley.
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