Editor’s Letter: Does real estate have a vision?

Will_DarbyshireWill_Darbyshire Member
edited November 2019 in General Discussion
There is this well-known phrase, which I think has its origins in religious text: Where there is no vision, people perish. I’m not entirely convinced that real estate has a vision. We may know what’s going to happen in the near-future (I wrote last week about our continued need to grasp digital transformation), but there's another crucial consideration to make: do we know what this ongoing transformation will, in turn, make possible in the distant-future? If we don’t, might the industry and its people eventually perish?

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  • Surely the reason why 'Real Estate' doesn't have a vision is because 'Real Estate' doesn't exist as a single entity. There are plenty of real estate companies with vision, not a collective one, because it would be impossible for real estate to agree. It can and does come together with common purpose on a regular basis = e.g. Better Building Partnership for example - that is built around a common vision but how each company goes about it is up to them.

    If a company doesn't have a vision for technology - then the market will evolve around them - but the fundamental purpose of a real estate company - to own real estate isn't going to change.
  • Real estate has different purposes for myriad of stakeholders and end users which may makes it challenging to find a common vision.

    Vision may not come from one but multiple voices, the community needs to define a common vision first.

    There are many technology advancement, smart ways to build, consume and manage properties of all types and the true potential for positive change: we are at the start a new cycle of change in the property market.

    It is indeed the right moment to talk about a vision and assess what are the foundations required to build a better industry for the future of property and most importantly for its users.

    Like any Transformation: it starts with a common definition, a coherent lexicon about what is proptech (for example) and how does it benefit all users at various stages of the value chain.

    We can start building an industry lexicon that can assemble all terms or reference with definitions that can then help in putting together a coherent vision.

  • Today, and you will like this Will, a Proptech company CEO connected with me asking if I could help, in the conversation two things came up, first he had no background in the property sector outside of his own experience of buying and selling, and I said that was great because if he was heavily experienced he would know where the barriers existed in the industry and not try to go through them. The second thing he observed was, 'I don't have too much experience with realtors, but what I have noticed is that there heads are always looking down at their desks.'

    And that in a nutshell is why we (30-years selling) in real estate have no vision - we are too pre-occupied with the business of the day, our thought processes are jarred a hundred times a day as we contort ourselves to the vagaries of clients needs. Yes, when you first open the business as I did, you have a vision, this a business plan version, get stock, sell stock, raise invoice, repeat cycle, cover overheads and you make profit, bolt on ancillary profit streams, financial services, conveyancing, surveying etc. Then as the business evolves you spend more, employ more, and hopefully make more profit, most days are a day with your head at the desk, and your mind juggling the important, the immediate and the urgent.

    The advantage that Proptech in the main has had, is that it is a bright sparkling new industry, and its model is often nothing. In that it starts with a hypothesis, then this is tested, formulated, and piece by piece in a logical pattern, it emerges, often created and dreamed up by people who often, thankfully, have little idea about the property industry, but do have a great deal of technical and problem solving skills to build and find solutions. And this is usually all developed in a technical environment, far away from the 'world of agency'.

    In a nutshell, Proptech says, 'the sales process for residential property takes too long and needs revision' and then puts it heads together, analyses what the present system is and develops a perfect system.

    And Realtors say 'We are going to sell a property today' - because their vision is that small, they do not realise that the world has moved on, they vaguely realise that it is easier to pay for things using their watch or their mobile (the multi-billion Fin-tech revolution) but as they bite on a sandwich as they exit at speed to do a viewing, they do not realise they could be planning a new way of doing things, if only they were not so busy.

    People in real estate, sales or lettings or property asset management or the other complimentarily services, have never been busier, the omni-channel experience that the client of today wants, means there is nowhere to hide for the property professional, even if they hide under the desk, maybe it is time, a few of them were 'kidnapped' for a few weeks and sat outside of their normal environment with their Proptech counterparts and allies, and planned out a better vision of how to do business in the sector, rather than thinking business as usual will satisfy the needs of their clients in the 2020's.
  • @James_Pellatt I would argue that real estate should try really hard to find a common vision - I don't mean so in such a way that every company is working in tandem to achieve a mutual goal, more that every firm knows what is going to be possible in the future, and thus makes efforts to prepare for that vision today. Just like music, or film - digital transformation has already cause rapid upheaval of those industries and their perceived visions, and now you get the sense that all major labels and studios know what's coming on the horizon and are preparing for it already. Real estate lacks this kind of technological and sociological insight into the next 50 years.

    @Andrew_Stanton Your phrase, 'business as usual' is the perfect one - this is exactly how I think many see the industry. Sure, the way in which processes are executed may change, but it will, more or less, be business as usual. ANyone who thinks that most certainly lacks vision. As you suggest, quite a lot of people still seem to think this way.

    @JorisPeucheret I think you're correct, many voices are required for a vision to start emerging, but it must then be bought into by everybody. A vision is not a business or industry objective, it's about gaining a good understanding of what tomorrow's world will look like and how it will work and, then, how real estate will fit into that. That's what vision is. Not just how tech will continue enabling real estate. I also agree about the lexicon and, to a greater extent, definition. Vision is not about competition - not about one company succeeding and another failing, it's about the industry as a whole ensuring that it remains viable and valid in tomorrow's world, that the work it does to transform today is laying the foundations for what will soon become possible.
  • Menno_LammersMenno_Lammers Member, Moderator mod
    Interesting question! In the Netherlands, we have different entities who are working on several goals like sustainability (energy) and CO2 reduction (EU goals), and 30% efficiency in construction. What do you think about creating a Society 5.0? The Real estate industry is in the heart of it.. https://www.unissu.com/proptech-resources/Society-5-point-0-how-PropTech-and-the-Sustainable-Development-Goal-come-together
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