Why the real estate industry must replace fear with opportunity during the COVID-19 crisis

In the twelve or so months leading up to the 2019 federal election, real estate businesses at various intervals exercised conservatism and implemented change. Whether cost-effective operating models, hyper-productive systems or almost any structure that leveraged economies of scale, if it was available, we saw it in real estate during 2018 and 2019.

Then the market kicked. 

Confidence returned despite no material changes to any economic drivers and people were transacting with property like the toilet paper panic buyers of the first stages of COVID-19.

With that electric spark in the market, conservatism and self-disruption were shelved by many. But now we face yet another challenge, not only in real estate but across global markets in virtually every industry, bar toilet paper, packaged food and hand sanitiser. 

So what’s the forecasted impact COVID-19 will have on the property market? 

Some media outlets have been very bold to suggest a 30 percent drop in property prices is coming. However, most people would strongly disagree. I have yet to find the person with the magic crystal ball who can tell us our future, which forces us to answer this question with the following, “for real estate agencies…it’s irrelevant.”

What do I mean by this? Whether the market craters by 30 percent or 20 percent or 10 percent or not at all, it really doesn’t matter. What does matter is an ever-evolving and completely adaptive operating model? This is what 2018 and the bulk of 2019 taught us and this is what COVID 19 has reiterated.

Social distancing, fear, hygiene and government intervention are just some of our new variables but we can only control what we can control. When the government pushed pause on public inspections and auctions, many in the industry thought the sky was falling. 

However, as we now start to regain some basic social liberties, it’s very easy to say' "let’s just go back to doing what we were doing beforehand". For those that are wrapping up homeschooling, the common question being asked of Grade 1 and 2 students is “what are you going to continue doing even when homeschooling ends?”. This is the exact same question, we need to ask ourselves.

Real estate businesses must be able to operate remotely from an operational and staffing perspective. If an agent has a phone and a tablet, they should be able to do what needs to be done in any imposed form of isolation. The days of paper ended long ago. Never fear, if your business isn’t in a position to operate remotely, it’s not all doom and gloom, every single supplier to the industry has a cloud-based solution. If you needed a reason to finally adapt to the latest tech, COVID-19 is as good a catalyst as any.

The real estate industry has typically feared change, however, if we alter our perspective and look at this as an opportunity, the process becomes markedly easier. That is not a spin on words, it is fact.

Some businesses will be further along the curve than others but preparing for a downturn of any shape, size or kind are the same parameters we all have. Both operational productivity improvements and cost-efficiency can be achieved by utilising available technology and leveraging economies of scale. 

Everyone has the same opportunity to utilise tech but not all have scale. You can’t fake scale, so if you don’t have it, you need to find it. It’s as simple as that. Joining forces, outsourcing, creating partnerships and joint ventures are the most common ways to create scale.

Is this the COVID-19 business checklist for a safe and happy return to better trading? No.

These are a few factors which all business operators, irrespective of trading conditions, should be considering in order to have an all-weather business.