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How the real estate industry has changed over the past 10 years

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In an industry which saw little transformation for the best part of 50 years, the real estate industry sector has experienced dramatic and unprecedented changes within the course of just one decade

In an industry which saw little transformation for the best part of 50 years, the real estate industry sector has experienced dramatic and unprecedented changes within the course of just one decade

According to Cobus Odendaal, CEO of Lew Geffen Sotheby’s in Johannesburg and Randburg, these shifts have been across the board. “We’ve seen notable transformations in every facet, from the way we operate and conduct business to almost the entire customer experience.” Odendaal says that the following are some of the most influential changes in the real estate industry market during the past 10 years:

THE EXPANSION OF THE INTERNET

Not that long ago, the only way to search for property was to buy the weekend newspaper. But thanks to the advancements in technology we can now search for and buy almost anything from the comfort of our own homes. Though most people still prefer to view homes in person before making a commitment, the initial searching is mostly done online to narrow viewings down to a shortlist and agents are sourced and contacted digitally.  Moreover, properties can be marketed to a much wider audience, even internationally, with ease.

CONSUMERS ARE MORE EDUCATED ABOUT REAL ESTATE

Easy access to information means that people are much more au fait with their local property market, new trends and the transaction process than ever before. As a result, property professionals really need to know their stuff and ensure they stay abreast of all property-related issues, including the economy, property market, trends, legalities and real estate regulations.

MORE REAL ESTATE REGULATIONS AND INCREASED TRANSPARENCY

Many new laws and regulations have been promulgated and numerous others were amended during the past decade. In doing so, a greater level of transparency has been brought to the real estate industry. These regulations protect and secure the rights of all parties, including buyers and sellers, property professionals and developers. We can expect to see more amendments as regulations and laws continue to adapt to an increasingly dynamic industry.

THE CONSTRUCTION BOOM

Globally, one of the unforeseen changes throughout the past decade was the increase in construction activity. The skyline of Cape Town’s CBD has been dominated by cranes for at least a decade in response to the city’s popularity as an investment destination and rising demand for city living. With Cape Town perceived to have better governance than other provinces, construction is unlikely to abate any time soon.

In Sandton we saw burgeoning construction, especially in the sectional title sector, in response to the seemingly insatiable appetite for apartments in the Sandton CBD. However, the demand has since dwindled because of rampant development and oversupply, and the market has cooled considerably. Countrywide, we’ve seen a spike in the construction of security estate developments that cater to people’s increased need for security and quality of life. Both factors, underpinned by the growing prevalence of remote working, have precipitated a spike in construction and development along the coast as well as the growth of second-tier cities.

CONSUMERS HAVE MORE OPTIONS

A decade ago, buyers only had a choice between a suburban house or an urban apartment with a few blocks of townhouses as alternative options. However, the property landscape has expanded dramatically in recent years. Not only have clusters and estate developments of all sizes been added to the mix, but there are also micro apartments, low maintenance properties, smart homes, traditional character houses and even lifestyle farms for homebuyers to choose from.

The retirement sector has also seen major changes with the traditional concept of apartment block-styled old age homes falling short of buyers’ needs and expectations. Modern retirement options centre on offering a quality lifestyle in a secure community for mature people, with many now accepting residents from the age of 55.

THE SILVER TSUNAMI

Humans are getting older than ever before. We are living and working longer and, as a result, the 60-plus age group is far more active and independent than their predecessors. This population sector is the fastest-growing consumer group in the world. It’s forecast that by 2050 their numbers will have swelled by an additional billion and will account for one in five of the population. Armed with an increasingly higher spending power and a growing share of overall income, they are quickly becoming key influencers for many corporations and industries.

THE MILLENNIAL INFLUENCE

However, it’s the millennials who are currently leaving the biggest footprint on the industry as the largest buying group. Many of their needs are very different from their predecessors and they are waiting longer to buy a home. When they do look for a home they prioritise factors such as good internet connectivity and living within an easy commutable distance from work or college. Born in the age of technology, millennials will do extensive online research and expect clean, simple and quick transactions. They generally don’t respond well to old-fashioned sales techniques and prefer concise texting for day-to-day communication.

HOME AUTOMATION

Although smart features were available a decade ago, there were only a few options that were mainstream. However, entire smart homes are now more common and the implementation of smart technology is becoming increasingly commonplace. And with the internet of things (IoT) now set to become a reality, home automation is likely to proliferate further, allowing homeowners to regulate their home electricals and appliances with the click of a button. 

“That said, in the face of all the changes and advancement, I think it’s important that we don’t forget the value in good old-fashioned human interaction,” says Odendaal, adding that technology should enrich our business and lives but it should not take over. “Smart property professionals will use it to their benefit and to make their client’s experience a seamless and memorable one, but as buying or selling a property is a large financial and emotional decision, I believe face-to-face encounters will remain key.”

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