The presentation on the topic “Utilising Ever-changing IT Developments in Real Estate/Estate Agency Practice” by Minister Supa Mandiwanzira read by the Permanent Secretary in the Ministry of ICT, Postal and Courier Services, Dr Eng S M Kundishora at the Real Estate Institute of Zimbabwe(REIZ) Winter School in July inspired a discussion which led to the realisation that Information and Communication Technology (ICTs) is becoming integral to all aspects of real estate in Zimbabwe and the world over.
The sector, which is grappling with a number of challenges which include liquidity/currency crisis, confidence crisis, shrinking business activity, escalating project costs, lack of factual and comparative data, increased competition, poor access to information and use of outdated ways of analysing and storing data requires that companies make decisions that enable them to stay in business despite prevailing challenges.
Technology holds the key not only to address some of these challenges/issues, but also a scheme through which the sector can react to the changing market conditions more effectively and efficiently. The real estate business in Zimbabwe primarily entails property sales, leasing, valuations, management, investment and development.
The sector is in the midst of dramatic changes brought about by the introduction of online technology, increased automation and enhanced accessibility to information. Clients, never than before, expect far much more from a real estate practitioner. Potential clients are well informed since they are able to harness the power of the Internet to access information and marketing of properties as well online searches with specific requirements in-built into the search engines. As the use of Internet spreads, people become more aware of its potential from a range of non-property applications and then demand the same level of service from the real estate industry.
The Internet and mobile phones are now offering highly interactive promotional tools. In addition, listing services for properties on the market on the Internet have emerged, which have become highly developed. The service allows prospective purchasers to search on-line, undertake virtual tours of properties and allow consumers to comment and offer valuable reviews of products and services.
ICT is also important in the practice of property valuations. Valuations are undertaken for a wide variety of reasons including sales, development, mortgage financing, collateral purposes and taxation using automated valuation models with data input from current market transactions. Professionals in the field, use their market knowledge and their judgment to process property characteristics/variables using mathematical models, such as discounted cash flow, cost based method, capitalisation techniques.
The models range from traditional, to advanced systems. However, the lack of market information which includes GDP and inflation forecasts which are inputs in coming up with rental growth and forecasting of rental growth over the property investment period are a major challenge.
ICT can also be applied to basic activities such as property inspection forms and Computerised Maintenance Management Systems ( CMMS). The use of software for valuations is slowly becoming widespread in the profession but there is little evidence of innovative use. Many real estate practitioners have in the past viewed these developments as threatening and disruptive and have instead sought justification for suppressing the technology.
The suppression could have resulted partly from the professional culture, misunderstanding of methods and outputs and unavailability of input data. A combination of enlightened clients and the standards set by other industries, such as banks is now forcing the industry to embrace change. However, it is important to note that on the downside the use of ICT in the real estate requires strong data and systems security, sound and reliable support infrastructural base, high expertise and high setup costs.
The development requires buy in form all real estate practitioners. Online searches of deeds registry information and the sharing of market and transaction information can be first step in transparency of the information. Full implementation of ICT systems should improve ease of doing business within the sector. Advancement of e-business has reduced demand for offices and forced tenants to carry out space rationing as they reduce office sizes.
A notable example is of banks embracing internet and mobile banking leading to closure of some branches and reduction of space required for banking halls. This in turn affects the size of shopping malls and warehouses through online shopping resulting in excess space on the market which affects rentals and valuations going forward.
Property investors and developers need to come up with alternative uses for excess space and the conversion of existing city centre buildings into student accommodation and mixed use buildings with a lot of challenges on the infrastructure. Above all, ICT is now being regarded as an organisational core competency that is necessary for all companies to survive and prosper in a rapidly-changing, competitive business environments.
Companies that are quick to adapt will survive and those that delay will find it harder to survive.