Business LeadershipElite Agent

What does the future of real estate hold?

In the future, will agencies focus on disruption or diversity, people or profit? Some of Rockend’s experienced customers discuss how the sector has changed and what the future holds.

Tony Morrison has always loved to talk numbers.

The Harcourts Tasmania and Victoria Chief Executive Officer has been in the profession 31 years.

He oversees 82 offices, and Harcourts holds 25 per cent market share across the two states.

The number 24 is also important for Tony – not only because it signifies the number of hours in a day, but because it refers to the grace period property managers once had to respond to emails from prospective or existing landlords or tenants.

Tony has been involved in buying and selling many rent rolls across Tasmania, and his offices currently manage about 1600 properties across the region.

WINDS OF CHANGE
He says the biggest change the industry has seen in recent years is the rising level of pressure put on those at the coalface.

“Property managers are being asked to do more and more every year and the pressure to maintain fees, let alone put them up, is enormous,” Tony says.

“The public’s expectations of customer service has also grown tremendously.

“Not that many years ago if you responded to an email within 24 hours, you were doing OK.

“These days, people expect responses within minutes or they become unhappy with your service.

“It is very hard to convince the public to pay a reasonable fee to hire a good property manager, as most people do not have a clue what is involved and how important it is to the protection of your asset to have a really good property manager.”

Western Australia-based Realmark Principal John Percudani is another businessman who sometimes shakes his head at the way the game has altered in recent times.

John started his real estate journey in commercial marketing and subdivision but has since evolved into commercial, residential, property management and strata real estate.

He says when he started in 1998, higher competency and knowledge helped attract a strong client base.

GREATER DATA ACCESS
At that time, there was also a strong command and control-style relationship, where the data and information available controlled the client.

This meant clients were managed at the will of an agent, reflecting the traditional concept of straight line selling, he says.

Now, a dramatic change in the industry means clients are empowered with access to information and armed to make informed decisions on their property aspirations.

“This essentially allows the agents within the industry to focus on relationships and communicate with clients identifying their needs and preferences and offer solutions that are customised to them,” John says.

John and Tony suggest the agility required to move with the demands of the client journey will continue to prove a challenge well into the future.

As with their peers, however, they remain optimistic about the opportunities that abound.

INNOVATION AHEAD
An ability to innovate while also adapting quickly to new technologies is likely to play an important part in distinguishing between the agencies that flourish in the future and those that fail, they suggest.

John says disruptors will challenge the viability of the traditional real estate business model; however, service skills will always be highly valued.

“Technology, for one, enters the market to focus on price point, challenging fee, cost management and revenue diversification,” he says.

“However, this also impacts the service and results – usually disadvantaging both as a result.

“Technology is great when used as it should be, in the right context.

“However, it cannot replace personal service and results.”

PEOPLE POWER
Belle Property Parramatta Principal Nathan Sahyoun agrees.

After more than 14 years in real estate, Nathan says the fact the industry relies quite heavily on traditional methods of operation is concerning.

“If we don’t get the tech piece correct it will open the door for disruption from outside sources to enter the playing field,” he says.

“The word ‘disruption’ gets used a lot and is always there as a threat to our jobs and way of life.

“I believe that we can grow and flourish with the use of technology, but this must be done so along with great people.

“The industry has so much experience and knowledge that can’t be replicated through tech.”

CUSTOMER SERVICE IS KEY
Nathan believes those who create adjacent income streams through better customer experience are those who will fare best in the future, as will those with the ability to think beyond being rent collectors and instead offer clients a marketplace of property services.

For Compton Green Managing Director Adrian Butera, the opportunity for future success lies with businesses that can look outside their core offering.

Adrian, an award-winning auctioneer who has 25 years experience in real estate, argues that for many years the real estate and property management sectors appear to have adopted a tunnel vision approach and have focused on renting and selling.

“We’ve got great processes and great people, what else can those people do for us, what else can we do as a business?” he asks.

“I think in the future we will think more broadly and we’ll start to operate more broadly.”

Taplin Real Estate Managing Director Andrew Taplin thinks along similar lines. Andrew, whose real estate career began in 1985 when he was named an assistant property manager at the group’s Glenelg office, says while the industry has always been great at innovation, the speed of change is greater now than ever before.

He sees controlling costs while achieving advancements and reinvesting in the business are likely to prove the largest future hurdles.

“Our industry is rewarding, but it is hard work,” Andrew says.

“Companies will need to be more adaptive than ever before to remain competitive and leaders.

“There needs to be a continued focus on reinvestment and training with a clear longer-term strategy.

“Companies that have a sound and solid reputation, and can deliver results rather than talk about them, will continue to succeed in the current business environment.”

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