{"id":912,"date":"2022-09-12T11:37:00","date_gmt":"2022-09-12T11:37:00","guid":{"rendered":"https:\/\/dev.cryptoloc.au\/?p=912"},"modified":"2023-10-03T06:13:07","modified_gmt":"2023-10-03T06:13:07","slug":"as-safe-as-houses-the-risks-and-rewards-of-technology-for-the-property-sector","status":"publish","type":"post","link":"https:\/\/127.0.0.1\/as-safe-as-houses-the-risks-and-rewards-of-technology-for-the-property-sector\/","title":{"rendered":"As safe as houses: The risks and rewards of technology for the property sector"},"content":{"rendered":"\n

The days when physical contracts were needed to buy and sell property are gone forever. But as the real estate industry moves online, cybercriminals are increasingly targeting the large \u2013 and sometimes lightly protected \u2013 sums of money that are involved in property transactions. <\/strong><\/p>\n\n\n\n

Traditionally, the real estate world has been awash in paper-based processes. But just as it did for so many other parts of our lives, COVID-19 accelerated the digitalisation of the property sector. Virtual inspections and auctions have become commonplace, and contactless contracts have quickly become the norm. <\/p>\n\n\n\n

Isaac J Coonan is the Founder of Proptech BNE, a platform dedicated to facilitating industry connections and supporting the development of the property technology community in Brisbane and South-East Queensland. He says COVID was the catalyst for a digital transformation that was long overdue in the industry. <\/p>\n\n\n\n

\u201cCOVID opened the door for the industry to understand what was possible,\u201d he says. \u201cThe truth is that the property industry has been a slow adopter of technology. I think the vast majority of the people in the industry would admit that. And I think the reason why it was slow to adopt technology is because it was such a highly profitable industry as it was. <\/p>\n\n\n\n

\u201cWhen you look at the main catalysts for digital transformation and innovation, it rarely comes from scenarios where the industry\u2019s doing phenomenally well, everyone\u2019s quite happy and everyone\u2019s quite wealthy. It normally comes from crisis, or from an urgent need for growth. <\/p>\n\n\n\n

\u201cI think COVID shone a light on how technology can bring resilience to an industry. What we\u2019re seeing now is the industry is starting to understand, \u2018Okay, just because it\u2019s not broken doesn\u2019t mean it can\u2019t be better.\u2019\u201d <\/p>\n\n\n\n

Now that the industry has seen how digital solutions can save time, energy and money for agents, buyers and sellers alike, there\u2019s no putting the genie back in the bottle. Isaac says Proptech will continue to help the sector to innovate and evolve, and remove friction from everyday tasks and processes.<\/p>\n\n\n\n

\u201cThe vast majority of this technology is not disruptive, it\u2019s enabling,\u201d Isaac says. \u201cIt\u2019s technology that enables people in the property industry to do what they do more efficiently, and at scale. This industry is such a relationship-driven beast, and proptech means they don\u2019t need to waste time on mundane, highly repetitive and easily programmed tasks. Instead, they can spend that time building relationships.\u201d <\/p>\n\n\n\n

The challenge for the industry, then, is to use technology to maximise efficiencies and provide more convenient user experiences without sacrificing security. <\/p>\n\n\n\n

The red tape around electronic signing has eased significantly over the last few years, to the point where it\u2019s become the norm in the industry. But even Isaac, a fierce proponent of the benefits of technology for the property sector, admits this makes him nervous. <\/p>\n\n\n\n

\u201cElectronic signing has been transformative, but this is one of those things that gives me a little bit of anxiety,\u201d he says. \u201cBecause when there\u2019s a rush to adopt a technology, you sometimes overlook some fairly significant risks. <\/p>\n\n\n\n

\u201cElectronic signing needed to happen, and it\u2019s been highly beneficial for the industry. Sales agents have seen they don\u2019t need to spend 20 per cent of their time driving contracts back and forth anymore, and they\u2019re not going to go back to that. And that\u2019s great \u2013 they should be spending that time on more important parts of their job.  <\/p>\n\n\n\n

\u201cBut you need to use the right tools, not just the easiest and most readily available tools. When you look at an electronic contract, it can actually increase the risk profile for a real estate transaction if there\u2019s no verification of who\u2019s doing the signing. <\/p>\n\n\n\n

\u201cIf I can jump on Adobe and throw someone else\u2019s signature on a contract, that\u2019s a problem. I think that\u2019s going to lead to some major screw-ups in the next year or so, which will lead to people realising they need to use better digital contract solutions.\u201d <\/p>\n\n\n\n

Cyber scammers and the property sector <\/h3>\n\n\n\n

The total value of residential real estate in Australia passed $8 trillion earlier this year, according to CoreLogic data<\/a>. <\/p>\n\n\n\n

That makes residential property Australia\u2019s largest asset class, and puts it around four times the size of Australia\u2019s GDP, worth around $1 trillion more than the combined value of the ASX, superannuation and all of Australia\u2019s commercial real estate stock. <\/p>\n\n\n\n

In other words, there\u2019s plenty of cash flowing through the sector, with plenty of small businesses \u2013 who tend not to have the same cybersecurity protections in place as larger organisations \u2013 taking part in online transactions that involve large sums of money. <\/p>\n\n\n\n

As a result, real estate agents, mortgage brokers and conveyancers are becoming increasingly popular targets for cybercriminals. <\/p>\n\n\n\n

The Australian Cyber Security Centre (ACSC) recently warned that property-related scams are rising in Australia<\/a>, while the Australian Competition and Consumer Commission\u2019s (ACCC) Scamwatch says reports of payment redirection scams in real estate are up substantially from last year<\/a>. <\/p>\n\n\n\n

The most common property-related cybercrimes are business email compromise (BEC) scams, in which cybercriminals impersonate email accounts in an attempt to deceive people who are buying, selling or leasing property. <\/p>\n\n\n\n

They\u2019ll often register domain names and create email addresses that appear, at a glance, to belong to a legitimate company, but might have letters swapped, or an additional character added. <\/p>\n\n\n\n

A property BEC scammer\u2019s modus operandi is to insert illegitimate bank details for settlement or rental payments. In Australia, the ACSC says cybercriminals will often impersonate property sellers and ask their agent or lawyer to update their details on Property Exchange Australia (PEXA), an online service for property transactions. <\/p>\n\n\n\n

This results in fraudulent bank account details being added to PEXA, without the criminals having to hack PEXA itself, and funds being sent to the cybercriminal\u2019s account. <\/p>\n\n\n\n

While banks are sometimes able to stop fraudulent transactions that are caught within the first few days, successful property BECs can go unnoticed until a business follows up on a missing payment. This can take weeks \u2013 and by that time, the money is long gone. <\/p>\n\n\n\n

According to the ACSC\u2019s most recent Annual Cyber Threat Report<\/a>, average reported losses from BEC scams, across all industries, were up 54 per cent in 2020-21 compared to the previous financial year. <\/p>\n\n\n\n

How to protect yourself when you sign a property contract online <\/h3>\n\n\n\n

With cybercriminals trying to squeeze through any openings they can find, the onus is on real estate agents, conveyancers, mortgage lenders, lawyers and any client of these businesses to be vigilant \u2013 especially during the settlement period. <\/p>\n\n\n\n

The ACSC recommends all parties involved in the buying, selling and leasing of property to: <\/p>\n\n\n\n