“Now apply the same principle to a house/building,” says Viruly. “When you buy or rent a property it will come with, probably, a digital logbook. You will be given all the history: when it was conceived and developed by the architects and who they were; when it was constructed and by whom; what additions or alterations were made and when; where the service feeders are; who has owned, rented or lived in the property; rates and taxes paid or due; and any rights attached to it. In other words, a _digital twin.”
From a regulatory perspective, a digital twin is explosive because utterly everything connected to the property is recorded in one place , which, if the processors are willing, could have the potential to reduce the transfer of property to as little as a couple of hours.
“Currently we do not have this type of integrated information because we are dealing with little bits of technology in use across different chains of facilitation, be that planning, broking, finance, deeds registry, etc,” says Viruly.
A second vision for, specifically, the residential market, is that no longer will we be buying bricks and mortar. We may instead, suggests Viruly, be buying a service. It might be true to say that we are already buying into apartment blocks that offer hotel-like services (laundry, gym, concierge etc), but the question is: ‘will we be buying the asset class or the service?’, especially relevant to those who can no longer afford to pay for such services outside of the costs of maintaining their existing suburban home.
So let’s look at the suburbs, which Viruly says could be more interesting. “Largely they are like dormitories. What Covid-19 might be telling us is that we need not necessarily work from home, but close to home, in other words everything within reach of a 15-minutes walk. Smaller towns benefit from this right now, and there is a green perspective to those lifestyles, for example the one-car home burns fewer fossil fuels etc.”
The point is how can the future of property improve our wellbeing? Do we disassociate property from driving GDP growth? “Yes, but only if we focus on greener, healthier lifestyles,” says Viruly.
“We currently live in the social disaster of apartheid cities. I call residential properties in such cities the 40s house – people live 40 km away, in a 40 sqm house where 40% of their income is spent on transport. We need to change this to a 20s house … same formula, but half of the impacts, which will result in far less urban sprawl.”
This is relative to another game-changer for the future of residential property … one that is already in play, but needs more definition in light of the social aspect. “There exists currently an interesting overlap between proptech, fintech and contech (construction),” says Viruly.
“These financial inter-relationships must really focus on fully adjusting to the green economy. We shouldn’t, for example, be building more but rather use existing infrastructure more efficiently. I always begin my property lectures with the reminder of just how big investments are in property, how high the transaction costs, yet we do not highlight enough how the social role is skewed to favour those who can make large investments. Too many South African’s cannot play in the property market as a result.”
Could it be that we are constantly buying into, or paying lip-service to, the hype of change without changing much? It is worth considering that for decades the property market has adapted to technology, rather than the other way around. It’s a fact that even conveyancing hasn’t transformed that much since before the Second World War.
“In the same way that eCommerce brought enormous change to the retail sector, it is time to allow proptech to move the property market in a new direction … one that is socially and environmentally sustainable,” says Viruly.
Courtesy of Private Property by Kerry Dimmer