Australia is perfectly positioned for growth in this “Asian Century”, and Australian real estate will be highly sought and increasingly valuable. But will the real estate industry be as valuable and desirable?
Yes, but only if it continues to keep pace with changes in technology, demographics and customer expectations.
Here are the top 10 things you can do now to future-proof your business for 2020 and beyond.
1. UNDERSTAND THE NEW BUYER
You might have built your business selling to couples who want to move their family into the local area, or investors looking to buy and hold for capital growth.
But the buyer of the future might be a very different kind of person.
They might be overseas purchasers who find you through social media, inspect property using VR (virtual reality) walkthroughs, communicate in a foreign language using automatic language translation software, and make international payments using online tools.
They might also be a different kind of buyer, such as a fractional property investment group (CoreLogic says this kind of investment is increasing rapidly) or somebody using AI (artificial intelligence) to help their decision-making (Skyline is using AI to assist in commercial real estate transactions, and Singou Technology has robots that help agents sell to Chinese speakers).
You don’t have to invest in all of this technology immediately, but at least be aware of it so you can be ready.
2. UNDERSTAND SMART BUILDINGS
The rapid growth of the Internet of Things (IoT) means more properties are being equipped with internet-connected sensors, for access (digital locks instead of keys), security monitoring, energy management, safety, entertainment and more.
Smart homes are also attractive to seniors who want to continue living at home rather than moving into aged care facilities.
This opens up a potential new market of buyers for you if you understand the technology and can explain its benefits.
3. INVEST IN YOUR ONLINE PRESENCE
While some of the tried-and-true offline marketing techniques still work, it’s now essential to also build a strong online presence for your business.
There used to be a time you could design and manage this all yourself, but those days are long gone.
Pay for professional advice about your online marketing strategy (ideally from an expert who understands real estate), just as you pay for other expertise in your business.
4. BUILD MEMBERSHIP
Before Uber was fighting to be legal, it put pressure on governments by asking their users to campaign on their behalf.
It could do this because it had a database of users, and referred to them as “members”, making them feel part of their business.
Contrast this with the taxi industry, which sometimes still refers to their customers as “fares”.
The same applies to real estate. Are you referring to your customers as “vendors” and your database as “buyers”?
What would change if you treated them as “members”, and offered them ongoing value based on their membership?
That doesn’t mean you remove or dilute any of the services you already offer them, but instead add more value.
For example, you could run a quarterly members-only webinar that is 80 per cent value and 20 per cent promotional.
5. UPGRADE YOUR IT
In an industry that’s traditionally hightouch but low-tech, it’s not surprising to find an explosion in the technology now available in the property sector.
According to Forbes, global funding for real estate property technology (PropTech) has been rising about 36 per cent per year and shows no signs of slowing.
If you haven’t reviewed and upgraded your IT infrastructure in the past three years, you have probably fallen a long way behind.
This is especially important as more efficient technology is driving down commissions (according to Macquarie Bank research), so your out-of-date technology is costing you money.
You don’t have to invest in cutting-edge AI, VR, or AR technology. Start by making sure everything is in the Cloud (stored on the internet and accessible from anywhere by anybody in your team).
6. LOCK UP!
A downside of making everything connected and accessible is the greater risk of security problems.
Cyber-security is particularly important in property and real estate with risks to privacy, confidentiality and physical safety.
This is a bigger problem than you might think, with Fairfax/KPMG estimating 60 per cent of medium-sized businesses are vulnerable to cyber-attacks that could put them out of business.
Engage professionals to secure your IT systems.
It’s easy not to invest in cyber-security, but by the time you realise you need it, it might be too late.
IT security company Webroot estimates it costs the average mid-size business $1.9 million to recover from a cyber-attack.
After you secure your IT system, the biggest remaining risk comes from your people.
It takes just one careless mistake to expose your entire system.
Educate your team to take appropriate precautions (VPN, strong passwords, updated virus checker, latest operating system updates, avoiding public WiFi, and so on).
7. USE ONLINE LEARNING
While we’re on the subject of education, it’s essential to include online training as part of your learning and development plan.
According to the Manpower Group, most employers are now investing in learning platforms and development tools, and your younger team members (Generation Y and Generation Z) take it for granted.
8. ENGAGE A REVERSE MENTOR
Many experienced agents and principals fall into the trap of assuming what worked for them in the past will continue to work in the future.
That’s not true anymore, but it’s difficult to shake that belief without deliberate action.
This is where reverse mentoring can help. Instead of being a mentor to more junior people, ask them to mentor you.
You become the student and listen to the experience, expertise and – most importantly – a different perspective of more junior team members.
9. ADD CUSTOMISED VALUE
Savvy agents already keep in touch with potential vendors by sending reports on trends in their suburb.
Technology (through big data and artificial intelligence) now takes this to another level, providing in-depth information about things such as rental demand, tenant turnover and mortgage default rates.
This lets you provide customised and personalised value to your “members”, instead of only sending generic information to everyone in your database.
10. LOOK AFTER YOUR PEOPLE
The war for talent is real. Deloitte says more than 80 per cent of small to medium enterprise (SME) leaders ranked “attracting skilled resources” as a top-three concern.
The cost of replacing staff is also high.
The real estate industry has a reputation for high staff turnover (particularly in property management, but also in sales).
Even if you have loyal, committed staff in your business, keep looking after them.