Was 2018 Peak PropTech…or is the best yet to come?

In the past year it seems every other story has been about PropTech - the big stuff like Purplebricks and the defunct Emoov, or small app-based products from start-up companies wanting to transform how the property industry operates.

We champion PropTech here on Estate Agent Today so we have asked our panel of experts whether 2018 saw digital disruption at its peak…or whether this constant stream of transformative products is simply how it’s going to be in 2019 and for each year beyond.

Please enjoy our experts’ take on PropTech and feel free to comment - how has your experience been this year? Has digitisation made your job easier of have you felt less inclined to invest, knowing there’s ‘always something new around the corner’?

We look forward to your comments and, as ever, thanks to our panellists for contributing and you to reading.

We’re back with Estate Agent Today on Monday, Christmas Eve - but if you’re finishing work today, Merry Christmas!

Kistjan Byfield, co-founder of base property specialists and PropTech startup The Depositary:

2018 has been an interesting year for agents and the way they use PropTech. Increasingly agents are waking up to the fact that the right products, applied correctly, can deliver in-house efficiencies, enhanced consumer experience leading to better margins, more clients or both. 

That said, agents are also waking up to the reality that many products are not the ‘big win’ they purport to be. Successful PropTech products (new and established) are quickly learning how important it is to really understand agency operations and there are often reasons to the way in which agents work. 

Likewise, agents are waking up to the fact that any solution (tech or not) is not an ‘easy win’ and takes a commitment to fully embed a product within your service, processes and culture.
The agents and products that will succeed in 2019 are those that fully get this and embrace this looking ahead.

I certainly don’t think 2018 was anywhere near ‘peak PropTech’, however as the market matures I think we will start to see richer products being released that have taken a longer time to develop - well-researched and strategic solutions that will better match the requirements and challenges faced by agents as well as targeting perceived opportunities. 

Part of this journey will also mean we will start to see more and more failures as companies fold or get acquired.

Successful PropTech companies will also develop stronger agent support networks to facilitate effective adoption and ongoing development with smaller, leaner, more efficient sales teams.

Neil Cobbold, chief operating officer of PayProp UK:

It’s been a year in which PropTech has found itself. 

On the one hand, we’ve seen new solutions like 3D floor plans struggle to gain adoption, as so many competing PropTech suppliers offer similar solutions – naturally some of those won’t survive.

On the other hand, we’ve seen leading suppliers consolidating their gains. The growth of key players like Fixflo, PayProp and Goodlord shows that 2018 has been about suppliers with longevity. The takeaway for me is that PropTech that meets a real need is here to stay.

However, too many products are still being launched without a market. Within the industry a lot of suppliers and agents think they can come up with the next big thing in PropTech because of a problem they’ve personally faced or seen. 

The issue is, agencies don’t want a one-size-fits-all solution – what may work for one company may not for others. And yet that’s exactly what a lot of the new PropTech companies are offering.

It might look like PropTech is becoming very common to the point of saturation, but new needs always arise and PropTech suppliers will have to keep a close watch on constant new regulations. It’s difficult to see how we can reach a PropTech plateau until the dust settles.

Will Darbyshire, PropTech writer at The Digital Marketing Bureau: 

2018 was not peak PropTech, to suggest as much is akin to suggesting that personal computing hit its heyday with Windows '98. 

PropTech is only just getting started. When we, or rather those who grace the earth once we've all left, look back at the history of property technology, 2018 will be spoken of as the earliest phase of the industry: PropTech in its infancy. 

The reason this strange peak theory is gaining traction as we leave 2018 is because too many people see PropTech through tunnel vision - giving focus to those sub-sectors and movements which operate under the umbrella term of PropTech, but, in my opinion, fall short of the necessary standards to be classed as pure PropTech. 

Online agency is not pure PropTech. Listings portals are not pure PropTech. So why are they spoken about so much?

If you ask me, these areas of 'PropTech' that we seem to focus on most are, if actually PropTech at all, just the tip of the iceberg. Yes, a troublesome 2018 means that the tip may well be melting, but the real stuff, the stuff we should really care about, remains largely unseen by 90% of those who consider themselves PropTech specialists.

In 2019, our industry's main objective should be to bring pure PropTech to the fore.

Iain White, industry consultant, trainer and former Countrywide director:

The term PropTech covers a wide range of different businesses, some of whom have struggled over the past year. However, in a lot of areas we have seen an interesting adoption curve as agents start to make informed decisions about areas to digitise for greater profitability.

PropTech is not about novelty value or fear of missing out, it is about implementing the right tools to ensure your business is suitable for today’s consumer.

There was a significant shift half way through the year, where products with a consumer focus began gaining more traction. Previously, there had been a lot of success for companies whose products focused on making estate agents’ lives easier, and now we are seeing the rise of those that prioritise consumers. 

Of course, the real winners will be those with a strong consumer proposition that make life easier for agents.

There are plenty of technologists who build interesting products that will never see the light of day. Bringing a product to market takes a massive amount of work and expense. There may have been a time when a high number of startups failed due to lack of research, but this has been well publicised and, as a result, business plans need to be far more robust before investors will commit.

Everyone adopts digital technology at their own rate and, as such, the number of agents wanting to use PropTech tools continues to grow. There is also the fact that one size does not necessarily fit all. As businesses evolve, so they need different tools to support their changing needs.

Jeremy Leaf, north London estate agent and a former RICS residential chairman:

The substantial fall in volume of property transactions and time taken to complete them is having an impact on the property business - and PropTech is no exception.

There’s no doubt the continuing squeeze on revenues is resulting in rejection of many worthwhile products that may have otherwise been embraced. Unfortunately, much of what was avoided would have improved our proposition to customers such as in generating market appraisals, credit referencing, presentation and communicating with customers.

For instance, I expected greater take up of VR but am fairly confident its day will come sooner rather than later.

2018 has been a challenging year and especially online or hybrid agents. PropTech has become mainstream in the industry for several years so setbacks are inevitable.

Emoov falling into administration, the plunging share price of Purplebricks and rejection of Countrywide’s online sales option, have all contributed to a reduction in confidence to take on new ideas.

Online agents may only enjoy a small share of the market but the proportion has still risen by about 30% in the last few years so may only be a temporary lull.

A substantial amount of negotiating strength comes from appropriate use of technology but human input is still essential for managing client expectations, interpreting data and the weight attributable to each element.