Real Estate Investor Magazine South Africa August/September 2019 | Page 30

TECHNOLOGY
Prop Tech company
shakes up rental sector
BY BEN SHAW
Forbes Africa announced in July that HouseME, one of SA’s property
technology companies had been identified as one of the continent’s eight
top African startups, contributing in a vital way to Africa’s growth.
A
local prop tech company, HouseME has become
increasingly visible over the past six months as it
began managing the V&A Waterfront’s residential
portfolio, launched DepositFREETM renting for tenants and
offered eviction coverage as part of its suite of services.
We caught up with Ben Shaw, CEO of HouseME, to ask a few
questions about the state of the market, and how the company
has grown over the course of the year.
PROP TECH SPACE 2019
“The company has enjoyed a very exciting year, having
launched our eviction coverage and DepositFREETM products
to landlords and tenants respectively. Not only have these
products help vacancy reduction, but have propelled us
forward ahead of competitors in how we serve our clients,” says
Shaw
Shaw explains that the prop-tech industry is growing in
strides and is aiding towards the development of the company.
“Since launching, we’ve had 40% of our DepositFREETM
product from qualifying tenants which underlines the needs
we’re able to meet in building the HouseME platform out
carefully. Other notable events have been the funding of other
proptech players – which although increasing our competition
– is really exciting for us as it indicates that we’re playing in the
right space.”
CURRENT RENTAL LANDSCAPE
Shaw comments on the impact of the increase of living
expenses and the precarious economy on the property sector.
“The South African residential market can be characterised
in 2019 by declining disposable income and low business
confidence on the demand side. Some studies indicate that
over 70% of consumers are not living within their means,
and almost 50% of all consumers are struggling to adapt to
changing financial implications of the economic slowdown,”
he explains
He adds that there has been a visible trend in the decrease
of rental prices across the country.
“Happily, this is cyclical and we do expect a rebound as
we enter the summer season. Demand continues to show
volatility on a monthly basis, but is unlikely to pull pricing up
in the short-term. This can be further seen by real rental price
decreases across the country, where Q1 2019’s CPI (a measure
of inflation) is reported at 4.5%, but residential rental grew only
3.7% on average.”
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AUGUST/SEPTEMBER 2019 SA Real Estate Investor Magazine
Shaw says that residential sales and rental are under pressure
and prices remain constrained due to the current market.
IMPROVEMENTS IN RENTAL MARKET
“Drivers of property performance are very simple: demand
and supply. Demand is a factor of population growth,
economic activity and business confidence, and general levels
of disposable income. Supply is easily tracked by industry
bodies and statistics aggregators and is driven by new-
build developments, repurposing of built assets, and Airbnb
boomerangs,” explains Shaw.
“The South African residential
market can be characterised in
2019 by declining disposable
income and low business confidence
on the demand side.”
Shaw says that the figures of vacancy this year have
increased rapidly, compared to 2018 but he is hopeful that this
will turn around next year.
“Although holiday letting will absorb some level of supply
at the turn of the year, this will create an artificial pricing floor
before long-term-lets come under pressure again in the
second quarter of 2020. South Africa’s vacancy residential
rate was reported to be 8.6% in Q1 this year, higher than all
quarters in 2018. We believe a recovery will come towards the
end of 2020, soonest.”
NEW PARTNERSHIPS ON THE CARDS
HouseME recently launched a professional photography
network and Assist package to help landlords manage their
properties from remote locations, and also work directly with
agencies looking to modularise their value chain.
“This makes them more efficient and also extends the
services that they can offer. Users can look forward to further
integrations and better user experience through these
partnerships. It is testament to the company’s performance
that we are now servicing one hundred lease starts each
month!” exclaimed Shaw.
SOURCES HouseME