Real Estate Predictions 2022 - The future of the housing business Future requirements for the property management of multi-dwelling units - Deloitte
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Real Estate Predictions 2022 The future of the housing business Future requirements for the property management of multi-dwelling units
The future of the housing business | Real Estate Predictions 2022 2
The future of the housing business | Real Estate Predictions 2022
The future of the housing business
Future requirements for the property management of multi-
dwelling units
Inadequate management of ageing multi-dwelling units has become a
social issue. Digital transformation can help property management companies to
address concerns in this field, so they can benefit from the opportunities of an
increasing demand.
The challenges of existing so they can benefit from the opportunities Second, by improving the existing
housing stock of an increasing demand. This requires inefficient workflow. Examples are online
For a long period after World War II, four measures: (1) digitalization of distribution and storage of general and
Japanese governments aspired to increase property management, (2) division of board meeting materials, conducting
the housing supply and raise its quality. property management specifications into resident surveys online, digitalizing
This changed when the population started standard and optional, (3) support for self- inspection and maintenance records,
declining in the 2000s. Policy switched management of multi-dwelling units, and and introducing an accounting system. In
towards using existing housing stock. (4) collaboration between players in particular, the distribution and collection of
However, one of the problems in utilizing the industry. paper materials is inefficient and expensive
stock is the inadequate management of in terms in terms of labour as well as
ageing multi-dwelling units. The owners, Digitalization of property management distribution costs (postal, transportation,
or those who inherit a used property Property management services today and storage costs). Additionally, switching
in a multi-dwelling unit, often do not include participation in and running of to online exchanges between the head
understand the value of such a property general and board meetings and other office and managed properties will reduce
that has been left vacant. They fail to sell face-to-face duties, and duties that require the number of site visits by head office
or lease it to others, or do not participate human labour such as cleaning, inspection, staff, freeing up time for them to make
in the consensus-forming for repair or and patrols. Because of the personal door-to-door on-site visits.
rebuilding the property. nature of the services, digitalization has
not progressed in the industry as a whole. Lastly, the data accumulated in these
This problem is not limited to Japan - it is a As the problem of labour shortages digital operations can be used to improve
social issue shared by countries all over the becomes increasingly severe, property the quality of services - and resident
world. Management systems for multiple- management firms seeking to shore up satisfaction. By introducing IoT equipment,
dwelling complexes in major countries in their top-line revenues will need to improve for example, the air conditioning and
Europe and the US are similar to those in efficiency in order to increase the number lighting environment in common areas can
Japan. The framework details differ, but the of condominium units handled and be optimized, and upkeep and predictive
complexes in these countries also have managed per employee. The digitalization maintenance can be performed based on
management associations composed of of property management will improve the state of wear and tear of equipment
all unit owners, with decisions made at a efficiency in three specific ways. and devices in order to fulfil
general meeting. Sometimes, management residents’ needs.
is outsourced to a management company. First, simply as a replacement of labour,
In Japan, for example, the tasks outsourced by means of e.g. cleaning robots, IoT It is likely that new digitalized services
to management companies include support technology for inspections and patrols, will continue to be introduced for various
for general meetings and association and chatbots for handling complaints. All aspects of property management. But even
management, accounting, caretaker duties, of these will help keep down personnel before that, the introduction of a number
cleaning, and maintenance and inspection costs. Human employees can then focus on of services that already exist is expected
of buildings and facilities. added value areas where the human touch to proceed. Whether or not property
is preferable. Moreover, the personnel management is digitalized is a key factor
Digital transformation can help property freed up by these measures can be used to for competitiveness.
management companies to address increase the managed unit capacity.
concerns about inadequate management,
3The future of the housing business | Real Estate Predictions 2022
Division of property management In the case of a high-grade multiple- Depending on the kinds of services
specifications into standard dwelling complex, the emphasis will be demanded by the management association
and optional on face-to-face communication, with a and the upper limit on management and
The second measure is to classify property building superintendent on permanent outsourcing costs, it might be interesting
management specifications as standard duty as in the past. Some of the to consider the possibility of switching to
and optional: defining the provided digitalization initiatives introduced in (1) self-management.
property management services based may be incorporated. Optional services
on factors such as the multi-dwelling can be added relating to the frequency Looking at the future of property
unit grade, resident demands, and of inspections and patrols, the extent of management, the services provided by
management and outsourcing costs (see assistance with running management the management company will likely
Figure. 1 below). Currently, the quality of association general and board meetings, match the services expected by residents.
property management, and especially and the promptness of response to Communication with residents will be
resident satisfaction, greatly depends on emergencies such as loss of keys or water key to determine the level of property
the quality of the representatives and leaks. Other possibilities are the provision management needed and how much
management staff. This means that even or introduction of services such as residents are willing to pay for this.
if the property management agreement housework and house cleaning.
itself does not change, and there is no
difference in the provided services, the skill In the case of a middle-grade multiple-
in handling of the duties by staff will likely dwelling complex, digitalization could take
impact resident satisfaction. By clearly the place of face-to-face communication.
articulating in writing the kinds of services This will reduce management costs.
to be received, it is easier to meet the For instance, by introducing robots
expectations of residents. and sensors, online notifications and
announcements to residents.
Figure 1: Example of standard and optional multi-dwelling unit management services
Service level
Management Services Optional Services
High
In-person Superintendent Handle Full-scale trouble Provision or
support for on site and accounting response service referral of
holding general monitoring by services shopping,
and board patrols childcare, and
meetings other life services
Application based Remote Introduce Self-handling of
support for holding surveillance by accounting trouble response
general and board security service, and have
meetings cameras a management
association handle
Ordinary
4The future of the housing business | Real Estate Predictions 2022
Support for self-management of Even in highly specialized areas such services on a BPO basis for the managed
multi-dwelling units as drawing up long-term or large-scale properties of other firms, in service areas
The trend of rising multi-dwelling unit repair plans, there are expectations for or locations where it has an advantage.
management fees may well lead more advice and consulting from third-party By focusing its own resources on its
management associations to look closely standpoints. By leaving basic property strengths, it will be able to manage
at the third option: self-management. management up to the management operations efficiently.
Rather than distancing from those association and providing only highly
associations that choose this option, we specialized services as options, it should be Such collaborative relations are also
can expect demands for providing support possible to provide high added value and possible from the viewpoint of digitalization
for self-management, making use of the high unit price support. of property management discussed in
digitalization of property management (2). Companies that develop digitalization
introduced in (1) and of the division of Although self-management support itself tools, could introduce their own tools to
management specifications into standard may not lead directly to big profits, actively other companies, obtaining rental or usage
and optional as discussed in (2). engaging in such support is important fees, and reducing their maintenance costs
for maintaining good relations with through scale. The tool users, meanwhile,
Possible ways of supporting self- management associations performing can keep down system development costs
management include provision of support self-management. Group companies and reduce their management costs.
applications and other software. Even will reap profits when future large-scale
if the management association lacks refurbishments or rebuildings are being There are limits to what a company can
specialized knowledge and experience carried out. do on its own in the face of the severe
in property management, the costs and problems of labour shortages and rising
trouble of management can be reduced Collaboration between players in personnel costs. By actively pursuing
if the association can provide one-stop the industry collaboration with ”the competition” while
assistance for tasks such as keeping Another important measure is to making the most of a company’s own
track of contracts with service providers strengthen collaboration between areas of specialty, the multi-dwelling units
and of orders, organizing occupant and “competitors”. Companies that insist management industry as a whole benefits
owner information, and managing repair on providing services on their own may and develops.
reserve fund income and outgo. Leading increasingly find themselves coming up
management firms have released self- short on resources and costs. They could
management support applications in outsource them to other companies
recent years. Also, companies offering in the industry by classifying property
similar services have appeared among management services into standard and
Real Estate tech companies, so it is likely optional, and carving out a portion of these
that competition will heat up for self- services. At the same time, a company
management support applications. might take on certain management
This paper is an excerpt from the report “The Future of the Housing Business―Prescriptions for real estate companies during the
housing transformation era ” presented in June, 2021.
https://www2.deloitte.com/jp/en/pages/real-estate/articles/re/future-of-housing.html
Contact
Takaumi Tamura
Partner |
Consulting | Japan
Investment Management & Real Estate
tatamura@tohmatsu.co.jp
Ran Furuyama
Manager |
Research & Knowledge Management | Japan
rfuruyama@tohmatsu.co.jp
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