The Australian real estate community needs to come together around proptech and look at ways to embrace and fund the innovation that is being delivered at an increasingly rapid rate, according to industry experts.
The Future of Proptech lunch held by the REINSW this week attracted 60 real estate agents, proptech startups, VC funds and industry suppliers, despite torrential rain in Sydney that closed the airport and prevented many from attending.
Keynote speaker Chris Rolls, the CEO of PieLab Venture Partners which is Australia’s only residential proptech VC fund, delivered his presentation via Zoom due to flight cancellations. He told the proptech event the flood of funding now being made available to proptech startups globally meant innovation was going to accelerate even faster.
Proptech funding now $7.65b
“Funding has grown from $221m in 2012 up to $7.65 billion in 2017 and it’s grown even more since then,” Chris said. “In fact, the 2017 figure excluded $4.4 billion invested in WeWork and $550 million in Compass so even those numbers should be higher.”
Chris said that while many in the industry – especially in Australia – focused on the disruptive competitors such as PurpleBricks, the next stage of real estate technology would be a synthesis stage based on big data, sensors and transaction management platforms that made life easier for both agents and real estate consumers.
PieLab has identified 260 companies currently working in proptech in Australia alone. While some are well known names such as realestate.com, Domain and Rockend, there has been a flurry of newcomers over the past three years. He predicted that sales agent and property management services would grow exponentially.
Industry and innovators work together
A panel of industry experts identified that startups and the industry have much to gain from working together rather than seeing each other as competitors.
Quirin Schwaigenhofer from MadeComfy, which enables home and investment property owners to rent out their properties on the short-term rental market, said his business had partnered with many agencies. This includes Belle Property, expanding the services those businesses offer their clients.
MadeComfy provides a value-adding end to end management service for landlords which includes furnishing, styling, pricing, marketing, 24/7 guest management and housekeeping and maintenance.
“There is a lot of work involved that most property managers cannot do on top of their duties to long term rentals, so we are able to partner with agencies to offer short term rental options for their landlords. That is a great experience for the customer,” Quirin said.
Fresh eyes on old pain points
Justin Butterworth from Snug, said startups looked at the industry with completely fresh eyes. They were able to find solutions to real pain points that raised the service levels of real estate as a whole. Snug is a new industry player that helps agents lease faster to the best tenant by streamlining their workflow and applying innovative matching technology. It is also challenging the traditional bond structure.
“Around Australia there is more than $4 billion tied up in rental bonds, with $1.3 billion in NSW alone. But renters receive just the minimum interest from that while governments earn millions,” Justin said. “If you can create a system that allows landlords to have security that their property will be protected while also putting more money into the pockets of renters, that’s a better experience for everyone.”
$1 for the idea, $90 to sell it
Alister Maple-Brown from Rockend said established suppliers to the real estate industry had channels to market for startups that could help foster further innovation.
“With every startup you’ve got the issue that it costs $1 to come up with the idea, $10 to build it, but $90 to market and sell it,” he said. “At Rockend, we see ourselves as a being able to offer access to customers who need the ideas and services these newcomers are offering. The faster they get to market successfully, the more everyone benefits. So we’re looking at ways we can work with them as we see this as an exciting time.”
Andrew Haigh from Realestate.com said the platform giant had itself purchased several startups and incorporated them into their business.
“The most recent acquisition was Hometrack which has allowed us to play in the property data space,” Andrew said. “They are separate units within the business that allow us to deepen and improve our offering.”
Commercial real estate active in proptech
Avi Naidu from commercial real estate venture capital fund, the Taronga Group, said commercial and institutional property investors were now highly active in the realtech investment space. The Taronga Group currently has nearly $100 million in funds invested in real estate technology in Australia.
The CEO of the REINSW, Tim Mckibbin, said the event shows the strong level of interest in proptech, and that there is much to be gained from industry and innovators working more closely.
“It demonstrates there is a whole lot of innovation happening out there that we need to bring into the tent and not be frightened of,” Tim said. “The first step is building a community of innovators and agents and REINSW is excited to support more initiatives that bring everyone closer together.”
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Content marketing strategist, researcher, journalist and presenter specialising in the real estate industry. I'm passionate about proptech, digital disruption and all things property, big data, leadership and entrepreneurial ideas, have an MBA and specialise in social and digital media content creation and automation.