Real Estate Investor Magazine South Africa Real Estate Investor Magazine - October 2017 | Page 14

Technology’s
Disruptive Force
In Real Estate
Shifting trends and
innovations
BY MONIQUE DU TOIT AND NEALE PETERSEN
T
echnology is changing life and the world as-we-know
it and is impacting a number of industries across
the board including real estate. From post-apoca-
lyptic imaginings of a new world without human contact, to
fear-mongering about the rise of machines, robots, comput-
ers and smart phones we’ve reached saturation point when it
comes to talk of life going digital.
The real estate industry is known to be slow to adapt
to change. The tech-boom is no different. An article on
Bloomberg, by Barry Ritholtz, lists a few reasons for technolo-
gy not having upended real estate as we know it just yet: Relevant to our market, it was found that Africa will be the
largest contributor to this growth, as can be seen in this chart:
Opinions are divided on the extent to which the real estate
industry will change in coming years, but the fact that it will
change rapidly is undisputed. Several large-scale trends have
emerged over the past decade, indicating clear shifts towards a
new way of doing business. The report also finds that global life expectancy at birth rose
from 67.2 to 70.8 years, resulting in not only more people, but
people living for longer. These factors greatly influence how
our societies are structured, as issues pertaining to job security
and access to resources rise in prominence.
A perfect example of this is the rise of urbanization. An
earlier report by the UN stated that, in 2014, 54% of the global
population was urban. It predicted that, by 2050, this number
would rise to 66%, following on the pattern of the past 10
years pertaining to lowering rural inhabitation. The report fur-
ther states that: “Africa and Asia are urbanizing more rapidly
than other regions of the world. The rate of urbanization, mea-
sured as the average annual rate of change of the percentage
urban, is highest in Asia and Africa, where currently the pro-
portion urban is increasing by 1.5 and 1.1 per cent per annum,
respectively.”
In line with findings on population growth, the report also
• Real estate is local; knowing the neighbourhood has value;
• The broker has a monopoly on listing information through
the Multiple Listing Service;
• Information asymmetry: people don't understand their
options and what they can and can't do;
• Complexity of bonds or mortgages, contracts, closings,
makes buyers and sellers comfortable working with an
agent, even if it is expensive.
Think big, live small
The UN released its World Population Prospects earlier this
year, offering a global picture of change. According to the re-
port, “the world’s population numbered nearly 7.6 billion as of
mid-2017, implying that the world has added approximately
one billion inhabitants over the last twelve years.” Over the
next 13 years, the report finds that the global population will
grow by another one billion, reaching approximately 8.6 bil-
lion by 2030. By 2050, it finds, the population will increase to
9.8 billion, while 2100 will see the global population exceeding
11.2 billion.
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OCTOBER 2017 SA Real Estate Investor Magazine