IN THE LAST FEW YEARS, our politicans have contributed to the idea that sustainability is either too hard, too expensive or too complicated. Cecille Weldon, Head of Liveability Real Estate at LJ Hooker, says this is definitely not the case – agents who are able to demonstrate how sustainability factors can impact the value of a sale or rental property are well positioned to win the listing.
IT’S EASY IN our industry to equate innovation with technology and equate disruption with something that threatens us from outside; something that happens to us.
Clay Christensen is the author of The Innovator’s Dilemma: The Revolutionary Book That Will Change the Way You Do Business, and a Harvard Business School Professor.
He defined one expression of disruption as “new-market disruption”, that is, “when a product fits a new or emerging market segment that is not being served by existing incumbents in the industry.”
In a new-market disruption, the unserved customers are unserved because serving them would be unprofitable under the current business model.
So in essence the best innovation strategy is willingly to disrupt from the inside; to listen to the heartbeat of our real estate business model and look at the assumptions that underpin it. To look deeper into what we have judged as too hard, too expensive, not relevant or not profitable.
In doing so we see where our vulnerabilities lie and in turn identify where our new opportunities will arise. It’s about being ready and empowered to offer a new and more meaningful customer experience for our vendors, investors, buyers and renters. By beginning early to actively seek out and own the hidden opportunities, we invest in and retain our own relevance into the future.
This is the philosophy which has underpinned my professional journey to identify new opportunities in the industry. Delving deep into the new residential real estate experience means identifying, collaborating, developing, piloting and refining.
Of course it’s hard to maintain this investigative perspective for long. There’s a natural gravity towards the status quo; a pressure to keep on delivering value through traditional measures and just become better at what we already do. It’s more challenging to address full-on the barriers within our own thinking, our business models, operational systems, our personal and professional judgments and our current industry knowledge. All these can block us from seeing a new market opportunity; to shift our perception from irrelevant to relevant, from unprofitable to profitable, from too hard to simple and robust.
So what are we missing?
Don’t let the word ‘sustainability’ blind you to the new opportunity in real estate. It’s a word that has been hijacked by industries and politics and is now associated with too hard, too expensive, too complicated. It certainly has little, if any, resonance in our industry.
But let’s look beyond the word. For the first time in Australia’s history, people are reducing their power consumption. Households are a key touch point for these changes, from appliances through to generating their own power with solar photovoltaic panels (PV).
Even more relevant to sales and property management is the impact of the running costs on the perceived value of a property; what people are thinking about and looking for, way beyond a market appraisal.
How do we know this? In addition to our research with Bond University, agents throughout the LJ Hooker network are reporting that buyers are now asking for power bills at the point of sale or rent. In my opinion this is one of the most significant trends in real estate over the last 10 years. It will impact how we appraise, list, sell and rent properties now and into the future. This is really the other side of affordability. Can I afford to live in this house?
Beyond the running costs there are new demands on our homes to respond and adapt to climate extremes rather than just continuing to rely wholly on artificial mechanical conditioning for comfort. And we want to live locally, to be close to a rich and vibrant community experience and have a healthy home that supports our wellbeing.
So how can we communicate this more effectively?
It’s really all about Liveability. In essence it’s about creating and finding your best home; healthy, efficient, comfortable and connected to the community.
The Liveability Real Estate team (soon to be the Centre for Liveability Real Estate) has spent the last four years researching the underlying trends and drivers of this new market in existing and new residential homes.
We’ve worked collaboratively with the Australian design, construction and assessment industries to identify the property features that really matter; Liveability Property Features® which offer the potential for reduced running costs and increased comfort if used correctly by the occupant. We’ve integrated these into standard property marketing processes and have developed exclusive appraisal checklists and resources.
All these work together with high-level professional training for the next generation of real estate agent, ‘the Liveability Real Estate Specialist’. This training program recently won Australia’s highest environmental award, the 2014 Banksia Sustainability Awards; Education for Sustainability category.
The program has been created for the real estate industry by the real estate industry. It’s a positive and proactive step to guarantee our relevance into the future and provide a better, more meaningful, future-focused customer experience for renters, owners and investors.
