Coronavirus’s impact on real estate marketing has turned the industry on its head and changed the landscape dramatically. The pandemic has played a key role in disrupting the traditional ways of transacting property. Like many businesses, the real estate industry has been confronted with challenges and forced to adapt to a new way of doing things.
As we look to 2022 and hopefully with the worst of Covid-19 behind us, some major components of the way things have become, will remain. Covid has changed the marketing of homes, the showing of homes, negotiating offers and signing of contracts. Agents will always continue to be the local experts. However, it is the technology we embraced as an industry that has put us in a great position, to not only adapt but also become better.
The digitalisation of real estate marketing
Lockdowns have forced people to stay at home and spend more time on their devices and on social media. For anyone looking to sell property, there has been an opportunity to capitalise on this attention. Buyers are spending more time consuming digital information before deciding to see a property. With people either unable or restricted in attending open homes, there has been an increased demand for more detailed marketing material.
The best agencies and salespeople have stepped up their game and are providing more online information. Covid has required buyers to do more due diligence prior to viewing homes. During New Zealand’s first lockdown, property viewings were restricted to two a day. This reduction in viewings required salespeople to carefully qualify buyers prior to them visiting. Even with the easing of restrictions, many vendors are wary of allowing people through their homes – preferring only pre-qualified people are shown through. Buyers have become more understanding of being pre-qualified and signing buyer-agency agreements before seeing a home.
Viewings in today’s world are trending to be of higher quality. The Covid situation has, for now, eliminated the ‘lookers’. Those in the market are serious buyers now. What is certain is that the role of a salesperson to find high-quality buyers is more important than ever.
Adapting to virtual platforms
Covid has rapidly increased the use of technology in the home-buying process. During lockdowns, potential buyers were unable to physically view properties. This has led to an increase in virtual viewings and video walk-throughs. Matterport 3D virtual tour software has been around for a number of years but uptake was slow. Pre-pandemic, many salespeople believed that virtual tours would stop people coming to open homes. The pandemic has seen demand increase exponentially and it has now become a key tool when a purchaser can’t view a property. The industry has already widely adopted drones for aerial shots. Social distancing measures implemented during the pandemic made their use even more of a necessity.
Social distancing has meant both buyers and sellers are more willing to meet by phone or video conferencing. Salespeople are still able to engage with clients ‘face-to-face’ and answer their questions, yet meet with them at times that are convenient for them, even if it is late at night. People can have consultations from the comfort of their own homes, and clients with children especially appreciate that.
Agencies and salespeople who had already embraced the potential of technology in real estate have had the advantage. Purchasers, many of whom are still afraid to venture out, are actively participating in these new processes. The use of new technology-enabled tools for the home-buying process will be further cemented as some degree of social distancing looks set to continue.
The coronavirus pandemic has also accelerated a change in auctions. The in-person auction, with its traditional banter, crowd buzz and gavel-banging has given way to online. Ray White Damerell Group has always been a leader in the auction space. When the pandemic hit, that experience proved invaluable as virtual demand skyrocketed. In what is believed to be a ‘world first’, Damerell Group completed its first-ever international online property auction sale. The vendors and buyers were in lockdown in their own homes in Auckland and across New Zealand. The auctioneer was in isolation in Brisbane, some 2288kms away from the property in Auckland that he was selling. A tech support guru was running the bidding platform from Sydney. This sale highlighted the strength of the Group’s technical capabilities despite the time zones and distances.
Ray White Ponsonby Managing Director, Gower Buchanan, described the auction as an “extraordinary experience in a market environment never chartered before”.
The pandemic has fast-tracked the virtual auction process. It has proven that buyers are comfortable bidding from the comfort of their homes. However, live auctions will return. A hybrid model with social distancing in-room and online will be the first steps. For sellers, virtual auction technology has opened up a larger pool of potential bidders.
Buying site unseen
A year of lockdowns and sheltering-in-place have inspired new urgency around home-buying. Lockdowns have enabled increased savings, making homeownership more of a reality for many.
Covid has turned what was a ‘no-go’ buying tactic into a new state of play. There are an estimated 30,000 expats looking to return home and only limited MIQ spots. Kiwis based overseas are buying properties sight unseen, as they just don’t want to miss out. Buyers have re-evaluated what is most important to them and if they find a house that fits the bill they are going after it. When a new home is about family happiness or a lifestyle change, buyers have felt comfortable purchasing it without physically walking through it.
In a 2021 millennial homebuyer survey, 80% of respondents said they’d consider buying a house sight unseen. But dreams of homeownership are accompanied by financial anxiety. Millennials are still struggling to afford down payments and banks are tightening lending. They are often competing against investors or downsizers for limited properties. As a result, they’re willing to gamble on homes they’ve never seen in person.
Around the world, the pandemic brought sweeping changes to our daily lives, including what we value in our homes. People are spending more time than ever in their homes and have become keenly aware of the benefits and deficiencies. This has triggered a huge increase in home renovations. The pandemic has also influenced the way potential home buyers are prioritising their needs. The prospect of working from home more regularly has seen demand increase for properties with a home office space.
Between 2006 and 2019, remote work expanded 170% to the point where about 8% of people with jobs worked remotely. By August 2020, the Covid-19 pandemic helped drive that figure to 20%. Global Workforce Analytics believes the percentage of telecommuters will hit 25% to 30% by the end of 2021. These are factors that urban planners and developers will need to take into account when designing future homes. Those without a private space will look for public outdoor green spaces, which may become a higher priority in deciding where to buy. Others may decide that as home working increases, they’d like to move to a more rural location.
Looking to the future
For all our technological and social advancements, Covid has made the world take stock of how the way we live and work can be altered by the most ancient of forces.
The real estate industry has been quick to adapt to changes and new technologies, as seen by the digitalisation of numerous procedures. As the lockdowns end and we look forward to a time after the pandemic, it’s unlikely that these changes will be reversed. Covid has fast-tracked the use of many technologies which improve the customer experience for buyers and sellers. The flow of information to all buyers and sellers has been greatly improved.
Sellers will look for salespeople and agencies that can deliver them the best online marketing and sales process. Buyers will want as much detailed information on a property as possible prior to visiting. This in turn will help qualify the buyer prior to a site visit.
Having more educated buyers and more educated sellers is a good thing. Salespeople are a very important part of this process and will continue to add a lot of value. If you would like to work with an agency that is at the forefront of real estate technology and marketing, we would love to hear from you.