Millenials seeking changes from the industry
DISRUPTION and evolution are two words increasingly used in industries internationally as digital and technological advancements affect traditional ways of doing almost everything.
The property industry is not exempt and needs to find new ways to meet the challenges of online property portals and lower-commission challengers.
But possibly the biggest threat it faces is meeting the needs of a greatly changed buyer demographic.
“Millennials are entering the property market and their needs are different from what we are used to,” says Paul Stevens, chief executive of Just Property.
“Buying a property is a milestone, and the message of competence and reassurance they need to receive from industry players needs to be carefully crafted.”
Even though there is much talk of this generation of buyers needing to operate online, they “are still humans who need human guidance”, says Stevens.
“We need to be present online and on social media – in the right, personal way – to ensure that they want to engage with us in the real world, and we need to provide value they can’t find anywhere else.”
This is not just a challenge for South African property professionals, but is a disruption for the global industry.
America’s National Association of Realtors says one consistent finding over the past four years has been that buyers aged 36 and younger – millennials or Generation Yers – make up the largest share of home buyers.
But they are not the only buyer group changing the way they look for homes.
The US association’s 2017 Home Buyers and Sellers Generational Trends Report finds that, among nearly all generations of home buyers, the first step is to look for properties online. And thanks to internet home searches, buyers usually “walk” through homes they view online.
Local statistics reveal that nine out of every 10 prospective home buyers will look to the internet before using any other type of resource, says Adrian Goslett, regional director and chief executive of Re/Max of Southern Africa.
“Potential buyers are choosing the internet as the resource of choice because of its convenience. Users can access massive volumes of information at the click of a button without leaving the comfort of their home or office.”
The internet and the growth of social media allow estate agents to advertise a listed property within minutes of acquiring a sole mandate and to target advertisers more effectively, says Mike Greeff, chief executive of Greeff Christie’s International Real Estate.
But buyers still want the personal touch. Greeff says: “While there are changes, the fact is many buyers continue to seek the personal interaction with an estate agent.
“The most recent PropStats bear me out; they reveal that while 55% of buyers across the Cape Peninsula found their property online, the remaining 45% – a significant number – found the property by other means, which include show houses, referrals and being contacted directly by estate agents.”
And Greeff says using the internet to find property is patchy across the peninsula, notably on the Atlantic seaboard where, according to PropStats, 80% of buyers sourced their properties other than online.
“In the Constantia suburbs, as many as 64% of buyers found their property offline.
“Notably, 20% sourced the property by being existing clients… And 31.5% of buyers bought a house they had first seen on show.” Greeff says in Hout Bay 65% of buyers seek personal contact with an agent. Here up to 47% were existing clients, so had heard about the property directly from an estate agent.
“In the southern suburbs, the stats show that 58% buyers prefer sourcing their properties offline and 27% bought a home after an agent introduced them to it.”