As is the case with a lot of other industries, technology and the internet have brought about a revolution in the South African real estate sector, giving us enough to discuss for real estate tech in South Africa. The buzzword Proptech (property technology) is not a new term for South Africa real estate and global technologies have been promptly adopted by local real estate agents, with increased startups in this space in the past 3 years.
It is touted that right now in South Africa 90% of the consumers begin their real estate journeys online. Technology and mobile apps, in particular, are increasingly becoming tools to increase efficiency and give value added services to clients by real estate agents in South Africa. There are mostly three ways in which digital technologies are changing proptech or real estate tech in South Africa: virtual property agents, crowdfunding as a means of investment; and information aggregation, and collaboration. We shall elaborate on each of these in the real estate tech in South Africa section below.
Though Proptech has historically been slow to adopt new technologies, this trend is changing in the current times. To understand how real estate tech in South Africa is changing, it will be interesting to know more on the scope of technology startups in South Africa as well it’s current real estate trends.
The technology disruption in South Africa
The adoption of disruptive technologies is on a rise in South Africa and many startups are working to take this sector forward. There are a number of new technologies that are rising in South Africa like IoT (Internet Of Things) that works with connecting devices to the internet. It started with machine-to-machine incarnation and now has evolved as a device to organization tool.
Taking data analytics and cognitive computing to the next level is artificial intelligence (AI), that can predict, infer, and in some ways, think and learn by experience much like humans do. On the same lines but totally different are virtual and augmented reality (VR and AR) that help us with an online and real world integration and convergence. These are special tools with regards to real estate tech in South Africa.
From a construction and real estate point of view, the growth of robotics startups in South Africa is an interesting trend to note. Industrial robots are surely changing how buildings are planned and made, along with some interesting 3D printing tools being used in construction.
According to data compiled by Disrupt Africa, African tech startups received a total amount of funding in excess of $185,785,500 in 2015. This, along with many other factors, makes work easier for real estate tech companies as integrations and concept knowledge is easier to spread.
Real Estate trends of South Africa
The real estate sector of South Africa has already seen some growth and correction in the first quarter of 2017. Slow overall economic growth and the effects of gentle but regular interest rate increases in 2016 led to a decline in this market in 2014, 2015 and 2016, but 2017 has been a good year. It is touted that this growth is going to continue to increase as the demand for safe, secure, and low maintenance housing continues to grow. This makes for a better ecosystem for real estate tech in South Africa, and its proptech growth.
Real Estate Tech in South Africa
As mentioned above, there are mainly three aspects in which real estate tech in South Africa is being changed and revolutionized.
The first is the increase of virtual property agents with the advent of new technologies and spread of the internet. Technology is connecting real estate agents and tenants and also eliminating middlemen. Virtual property agents offer a cost effective way gain information about properties and digital transactions make the process easier, using 3D modeling and VR tools for virtual viewing. There are some very interesting companies in South Africa offering this Proptech solution like TheVirtualAgent.za, Gumtree.za and Steeple.
The second interesting way in which real estate tech in South Africa is changing is with the rise of crowdfunding as a means of investment in real estate of here. Due to the flexibility and customization it offers, crowdfunding for real estate in South Africa is becoming popular with websites like Realestatecrowdfunding.co.za, Reimag.za and RealtyAfrica.com. Though this is sometimes considered Fintech (finance tech), in South Africa these crowdfunding websites are changing how consumers react to commercial real estate and also helping new developers grow.
The third interesting way is of information aggregation and the introduction of digital channels and social media tools. It helps buyers and sellers to communicate with each other directly without middlemen, bypassing agents. Cost-effective and real-time availability of property information enabled by developments in Cloud Computing and social media is leading the space of leasing activities online. This has also helped reduce entry barriers for smaller and newer companies to enter the real estate tech of South Africa.
Another interesting startup that has invested in real estate tech in South Africa is Imfuna. Imfuna provides a suite of mobile apps for digital inspection by construction inspectors, residential and commercial property inspectors, and rental property inspectors. Real estate tech in South Africa is also being influenced by startups like Zero, which is in the space of cloud-based accounting software that automates many admin processes in real estate here. Another leading startup of the proptech space in South Africa is also Simpli that is a tool to make property buying and selling easier, using a collaborative dashboard for processes, valuation, and calendar setting.
There are some startups for real estate tech in South Africa that are doing interesting work and might not necessarily enjoy the limelight that much. These are like companies like Ekaya, which is an online rental marketplace in South Africa.
The real estate world of South Africa is quickly getting disrupted by technology and the adoption of these technologies is very high. With an increased move to the online space, the transactions are becoming digital. Real Estate tech in South Africa is continuously on a growth trajectory and is touted to become bigger. But will this space expand enough to totally outdo conventional real estate agency? We think not, as it can be a combination of traditional efforts and manpower made efficient with digital tools.
YoStartups is a Pre Accelerator and it empowers entrepreneurs to propel their business ideas into successful ventures. Yostartups’ core mission is to take the message of entrepreneurship to 1 billion people globally by 2020, as on date Yostartups reaches out to over 100 million people globally through its direct and indirect channels.
*Any information given in the article does not constitute any warranty of marketability or fitness for a particular business idea for any market or industry segment. It is the readers’ sole responsibility to further research and assess the market opportunity.
Jappreet Sethi is the CEO of YoStartups. Jappreet Sethi is an HR & Business Strategy professional with experience of leading HR & People Consulting practice of multinational professional services firms. He has over a decade of experience across various facets of HR and is a Six-Sigma Black Belt along with a certification in using Lean for process improvement. He is a visiting faculty in the top management institutes, and his views and articles have been published by leading publications globally.