The way we consume products and services is evolving at an exponential pace. Taxi services, holiday accommodation, and entertainment are just some of the industries that have been turned upside down in recent years.
No industry is immune to disruption, including real estate.
Having successfully carved a niche in short-term holiday letting, Airbnb recently announced it is throwing down the gauntlet to the traditional players in Australian real estate rentals. And no wonder; it’s an unquestionably lucrative market.
CoreLogic data shows that 476,582 residential properties changed hands in Australia over the past 12 months, with purchases by investors accounting for 23.7 per cent. although data isn’t available historically, there has been a steep increase in investor activity over recent years. Five years ago, investors accounted for 43.7 per cent of all new housing finance commitments compared to 48.3 per cent currently.
The industry is rife with speculation as to whether this virtual rental agency will flourish or flounder – but worrying about the future is futile. Rather than burying your head in the sand, ask yourself: how can I position my business accordingly to thrive in the face of competition?
Arm yourself with knowledge
Knowledge is power, as the saying goes, so use data to your advantage and become an expert in your field. Having access to reliable data can build confidence in your decision-making and help position you as a trusted advisor to your clients, so read voraciously and keep up to date with housing market trends.
Investigate the competition and understand their business model: how do they make their money? What customer need are they meeting? What are they unable to do as well as you, and how can you use this to you advantage?
Refine your value proposition
Your value proposition is your unique selling point – and it should evolve in line with the market and customer needs. There is no singular way of doing something, so consider where there is room for innovation. Perhaps there’s an opportunity to offer staggered service levels and adjust your fee structure accordingly? Or maybe there’s room to evolve the way you market your services digitally? You could even explore a hybrid model that utilises the best of the traditional and challenger worlds.
Evolution doesn’t have to be drastic, neither does it have to take place overnight, but history suggests it does have to take place eventually. Because, like any industry, it’s inevitable that the way we buy, sell and lease real estate will evolve at some stage. And if it’s not Airbnb that disrupts the market, it won’t be long before someone else does.
Opportunities abound for those who create them, so embrace the challenge head on, develop a consumer-friendly proposition and remain agile in the face of industry change.