Given owning a home has long been at the core of the great Australian dream, it’s no surprise that Australians are obsessed with property. From baby boomers buying investment properties to young adults wondering if they’ll ever be able to afford a home, many of us have property on the brain. The obsession is being fed by a wealth of real estate estate sites eager to tell us about the latest million dollar suburb and trendy streets.
The founder of a new Australian property startup believes that this kind of information is making us look at real estate wrong. Luke Metcalfe describes his platform Microburbs as “Walk Score on steroids”, with the US-based platform’s mission to help people find apartments in ‘walkable’ neighbourhoods. Taking this one step further, Microburbs aims to give property seekers all the information they need about an area, and match them to the right one based on their specific needs.
Microburbs gives information such as commute times, distance to cafes and convenience stores, neighbourhood demographics, local ethnicity and religion, internet availability and speed, local zoning, the NAPLAN results of nearby schools and more, stats pulled together from various sources. However, rather than displaying this information suburb by suburb, the platform examines microburbs, pockets of streets numbering around 400 residents.
“The current way of searching for property is broken. Buyers narrow down to a few suburbs, but suburbs are very diverse places,” Metcalfe said.
“The average difference in income between microburbs within a suburb is 38 percent. Suburbs offer very different lifestyles based on whether you’re on the main road near the shops or far down the hill. Suburbs made sense when people tried to make all the search criteria trade-offs in their heads, but now we have big data at our fingertips, we can much more personalised results.”
The platform evolved out of NationMaster, a previous startup Metcalfe was working on that gave users detailed statistics on different countries. He originally wanted to work Microburbs into the NationMaster platform, but spun it out on its own after Google refused to cooperate.
“My wife and I were looking for a property for months and found there was a wealth of data online but it was very hard to access, and there was nothing to pair buyers to their correct areas. I wanted to put it all in one easy-to-use report with scores for all the major areas of desirability scored such as lifestyle, convenience, hipness, family, and tranquillity,” Metcalfe said.
When they hear Microburbs is a real estate site, Metcalfe said most people’s first expectation is that the platform is another site about listings or prices, showing yet again that we’re looking at property wrong.
“The bulk of the cost of a property is the land, and land is only worth something if it’s near other things such as amenities, employment, a certain demographic. So we focus on the real value of properties – what it has nearby, not whether it has a Smeg kitchen,” he said.
A challenge for the Microburbs team was deciding what kind of information to actually display to users.
“A big goal for us is to provide simple scores for subjective measures like hipness, so you don’t actually have to go down to every place and absorb the vibe. But how to infer hipness? Well, there are indicators like non-religion that might not of themselves make a place hip but happen to be common where hip people are,” Metcalfe said.
Given our aforementioned obsession with the property market, it makes sense that the platform has already found a diverse user base. Metcalfe said that it’s aimed simply at “any Australian looking for property” and is being used by investors, renters, vendors, and home hunters. Interestingly, it’s also being used by a number of real estate agents.
“I was surprised by the number of real estate agents using the site. I thought they would see it as a threat – narrowly defining their funnel as taking the buyer from ad to inspection to purchase – but they understand buyers are going to do their homework these days and want to be a part of that process,” Metcalfe said.
Selling real estate agents subscriptions to the platform or ads on the platform are just two possible ways to monetise Microburbs; however, Metcalfe is being careful about not only revenue, but also what kind of platform Microburbs is going to be and what it is going to do. He believes that existing property platforms have focused on real estate agents as the customer, and wants Microburbs to help the buyer.
A key aim of Metcalfe’s is to work with agents to “raise the level of trust” and quality of information between agents and buyers. When it comes to monetising, he said the system will become increasingly powerful as users provide more information about their needs as buyers, in turn helping to sell targeted products such as mortgages and particular properties.
“Many property sites are trying to build a two-sided marketplace one way or another. That’s a hard play considering the size and brand recognition of the existing marketplaces. SaaS offerings go hard on the sales, and form loads of alliances with the industry,” Metcalfe said.
While Microburbs will have to do the same, Metcalfe said the team will first look to gain an audience through content that concentrates on the platform’s existing strengths – namely the depth of its data and the curious insights it reveals.
“We’re data geeks so our articles will be about that rather than the standard top 10 tips, luxury houses and market updates that the other players provide. The best example of this was our Ashley Madison cheaters by postcode. That got lots of coverage. More recently we ‘analysed’ Australian shootings in 2015 and that went majorly viral.”
The development of the platform was funded with $150,000 from an angel investor, and Metcalfe hopes to raise further funding early this year.
Image: Luke Metcalfe. Source: Jane Earle Photography.