Coronavirus crisis ‘set to change real estate forever’
Date: 3rd April 2020
Leading proptech industry analyst, Andrew Stanton, believes the Coronavirus crisis is set to change the real estate sector forever.
The UK-based real estate strategist who runs the proptech-pr website says agencies are realising that thanks to proptech innovations, they can run their businesses in a different way.
Swift adoption of new technology and the digital transformation’ of real estate – which Consorto employs for the pan-European commercial property market – is what clients want.
Since the issue of property listing fees has hit the headlines after some agents were unhappy over charges from UK property website Rightmove during the Coronavirus crisis, Mr Stanton has talked to around 700 agents and industry figures about the future of the sector.
He tells Consorto, “I have been lucky enough to also discuss – what agency post COVID-19 is likely to be. Not one CEO, sole trader, area director, lettings manager, financial services director, manager or industry thought leader has said that it will be business as usual in the future.
Happy to do business in new ways
“Almost all say that the enforced lockdown has made them realise three things: One – working from home has benefits they had never considered, both for themselves and their sales teams – if the work gets done is it essential that work is carried out by a team under one roof. Two – swift adoption of technology is enabling many sectors of the industry to carry on, and the realisation that automation of processes – that ‘digital transformation’ of real estate I and everyone in the proptech industry have been banging on about is an enabler, not a hindrance. Three – the general public or end-facing customer, actually want to and are very happy to do business in new ways, and it is the ‘old-fashioned’ mindset of agents who feel they know best that is in fact holding back innovation and the choice range of the consumer.”
Typically, agents are having to close their offices due to Coronavirus restrictions, and relaunch their business onto different places. They are now realising lots of processes can be cut out and automated and that the agency can run a different way.
Agency mindsets need to change, Andrew Stanton believes. “A lot of the CEOs have got area directors that have been in place since the 1980s and that is their mindset. The customers’ mindset is in 2020 – certainly in terms of transactions.”
Conveyancing, which moves very slowly, also has to be updated. “I am dealing with a company where they go to exchange in 168 hours/7 days. They are doing it on new homes and then rolling it out to residential. Yourkeys is the company – Craig Massey & Riccardo Ianucci-Dawson, they are going to change the industry. Cashflows will change.”
Coronavirus crisis will change industry
In these times, in particular, agencies will find it difficult to survive without adequate cashflow and as a result, the real estate sector is likely to suffer business casualties.
At the same time, buyers will get more used to buying property online. “Generation Z in 10 years is going to be a major chunk of the population and they are not going to do it like Mum and Dad; they are not going to sit and wait in line. They are going to be on their phones saying, ‘I want to buy this’ and they are going to want a really quick transaction.”
As a result, the legal profession will also need to quicken their processes, says Andrew Stanton. “The biggest thing that will come out of this is that at the moment lots of estate agents have sales sitting in their pipeline unexchanged and they now have time to chase those.
“But they are probably thinking ‘this is what catches me out’ I have got all this potential money sitting here, but it is not flowing out the other end.
Digital revolution needs to happen
“The legal people love paper, processes and status quo and really that is where the digital revolution needs to happen, because that will free up commerce. Everyone is banging on the door now thinking ‘I need my money out. I need cash.”
Consorto.com is the only cross-border commercial real estate website in Europe with more than €10 billion in total listings online. The digital platform connects sellers, investors and verified brokers using targeted automation to make it quicker and easier to source properties and expand user networks.
It includes a range of CRE listings from office, industrial, retail, hotels and resorts, land, mixed-use, special purpose and development sectors.