How Using Proptech Makes Our Communities Safer and Healthier
David Faulkner, General Manager, Property Management, Property Brokers
Like many countries in the world, New Zealand has seen a substantial increase in property prices. Although many in our country predict a slowdown in the property market, rising interest rates and access to credit have resulted in many families being priced out of the property market, meaning they will likely be tenants for life.
Traditionally, renting has been seen as transitional or for people on low income who rely on the state to house them. Things have changed dramatically. Now, many young professional families are having to look at renting as a long-term option. Approximately one-third of the population is now classified as renters. This has increased from about one-fifth back in the early 1990s. The right to property ownership is the bedrock of many democratic countries, and younger generations likely feel more disengaged and even resentful because property ownership seems nothing more than a pipe dream.
A different attitude is required towards renting, and we have seen in recent years changes in legislation to improve tenants’ rights. Initiatives such as Build to Rent are gaining traction, as is the state’s commitment to build more rental accommodation. However, these are only parts of the solution, and the world has been impacted by rising costs, inflation, broken supply chains, and skill shortages to build adequate housing stock to meet demand.
In New Zealand, Mum and Dad investors, who typically own no more than one or two investment properties, provide much of the rental accommodation. This can have issues such as emotions getting in the way of decisions and cash flow restricting the ability to maintain the property. There is also a potential lack of understanding that many landlords may have regarding their rights and responsibilities. This can lead to unintentional breaches of legislation.
This is where Proptech can play its part and help improve the rental experience for tenants and landlords alike. One thing I love about the property management industry is that there are so many facets to it. You are dealing with human beings, whether they be landlords or tenants. Each will have differing needs, and often you can be caught in the middle; dealing with conflict and trying to troubleshoot with relative parties to find resolutions is a daily occurrence within our industry. Then you have the vast amount of data that we are collecting which is too often under-utilised.
How we differ from our real estate compatriots is that they are dealing with a few transactions, but the amounts of money involved can be significant. Property management, on the other hand, typically deals with small transactions. The main difference is that we are dealing with thousands and, in some cases, millions of transactions yearly. This can provide us with an enormous amount of data. The next challenge is using the data to help landlords make better decisions, particularly around maintenance and capital expenditure. It can also teach tenants how to live in the property with greater efficiency and improve the property’s performance. This leads to better outcomes for tenants who have warmer, safer, and healthier properties to live in.
There is also a potential lack of understanding that many landlords may have regarding their rights and responsibilities. This can lead to unintentional breaches of legislation
Like many countries worldwide, New Zealand has a housing crisis with insufficient stock to meet demand. As well as this, much of the housing and rental stock is second-hand and dated. A lack of investment within our current housing portfolio has led to substandard properties being rented, and this has wider costs on society through poor health outcomes.
Proptech can measure property performance and provide real-time data to property managers and owners. Devices created by Kiwi Proptech start-up Tether can measure the CO2 readings within a property. It can also measure a property’s temperature and power consumption and track how a property can be managed more effectively. Increases in CO2 emissions can lead to mould issues, which have a detrimental impact on the health of the occupants of the property. This means we can provide better education to tenants on how to look after their homes but also to landlords on preventative maintenance.
Other Proptech companies ahead of the curve in this space are Wellington-based Proptech start-up Tapi. This company makes it easy for tenants to report maintenance but also uses Artificial Intelligence or AI to help troubleshoot with the tenant to resolve issues. Using historical data that it has collected, it can then advise property managers and landlords on the best outcome to resolving maintenance issues. It can calculate whether a repair or replacement is the best option and the approximate cost of either option. This also leads to a faster response time in resolving maintenance issues, which leads to a better consumer experience for the tenant who does not get frustrated in waiting for ongoing maintenance.
Looking into the future, Proptech will play a significant role in reducing the Carbon footprint of the property management industry. As mentioned earlier, the quality of much of the rental stock in New Zealand is not where it should be. With a stronger focus on the environment, I do not doubt that we will see more legislation coming into play that demands greater energy efficiency for our rental stock. Companies like Tether and Tapi are constantly innovating, and I do not doubt that they will have a significant role to play in not just providing better outcomes for tenants and landlords. They will also contribute to our industry by reducing its carbon footprint.
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