Whatshot
Property Talk
Property Talk
When the wise see danger coming, they take cover
If you have been in business for a few decades as I have been, you have experienced a series of cycles and no doubt some ups and downs. Nothing, however, in my experience, compares to what we currently find ourselves in and are about to go through.
This is the time to batten down the hatches and weather the storm raging around us. I believe our president has made the right decision to call for the 21-day national lock-down and as hard as this is going to be for small businesses owners such as myself, it creates a unique opportunity to look into every aspect of your business and see how to make improvements in preparation of the recovery that is sure to follow at some stage.
As the US and the rest of the world are experiencing the same issues, I found an interesting article published on Inman by Mike DelPrete interrogating the question as to what it will take for a real estate company to outlast this pandemic.
Taking the recent experience of the real estate markets in China, South Korea and Italy, he notes that property transactions will drop significantly - up to 90% according to their experience, as countries move into more stringent lockdown measures in response to a spreading pandemic.
Although the drop is expected to be temporary, the exact time frame is uncertain, and we are therefore well advised to position ourselves to be agile and resilient. When the wise see danger coming, they take cover.
Using the property transaction data across 30 Chinese cities for periods of 4 weeks before the lockdown and for the 8 weeks post this event, the clear lessons to learn is that the recovery in volumes of transactions can be slower and take longer to get back to the levels seen soon before the crisis.
The South Koreans have seen their volumes in property transactions down by 90% in the capital Seoul.
The data so far suggests a time frame of 6 months for transactions volumes to recover to the pre-crisis levels. Although much has been said of social distancing and buyers and tenants changing the way they view a property, virtual tours are not going to save your real estate business in the face of plummeting transaction volumes.
As Seeff Zimbali we are leaders in the use of online videos with our YouTube Channel and use this tool daily to showcase the properties we represent. Nevertheless, we realize that the very nature of property transactions require face to face communication and on-site viewings.
I accept that the current crisis may well have longer-term implications on how we do our business, and showcase the properties, the experience by a prospective buyer to physically visit the property they intend buying remains an important aspect and what we facilitate as estate agents.
DelPrete concludes his thesis by saying that survival is now the key outcome to be ready for the recovery when it comes. Yes, there will be some pain to get through, but we will survive as individual businesses and as an industry.
I believe we will emerge a little wiser and leaner. Lower expenses; conserve cash and use the next 21 days (or more) to upskill yourself in those areas that will be most beneficial to your business six months from now.
Be Safe and God Bless.