Kylie Davis

Welcome to the Proptech podcast. It's Kylie Davis here and I'm delighted to be your host as we explore the brave new world where technology and real estate collide. It's so great to have you here and to share stories of innovation and opportunity across real estate, property and building services. And the aim of each episode is to introduce listeners to a Proptech innovator who is pushing the boundaries of what's possible across how we design, build, buy, sell, rent and invest in property and all of the associated behaviour and activities around that. Now, none of this would be possible without our sponsors, so a big shout out to the Direct Connect team, making moving, easy, dynamic methods, the innovators behind the forms, live and RealWorks forms, and the Proptech Association of Australia. Thank you for your support of the podcast. My guest in this episode is Sonja Markovic from an exciting new Prop tech called Evitat and they are making it easier to renovate and build homes using materials and services that are energy efficient and have strong green and strong health credentials.

Kylie Davis

Evitat were the winners of the most innovative startup in the Environment, social and Sustainability category of the 2023 Proptech Awards and it has a great story. Evitat was born from the pain that Sonya experienced personally trying to restore and renovate a Queenslander that had been damaged by a cyclone. An experience that she says was like studying for a PhD. And with a new rating system on the cards to be introduced for established homes around energy efficiency, it is an area that we are going to see experiencing exponential growth and demand. So, here to tell us all about it, Welcome to the Proptech podcast.

Sonja Markovic

Thank you so much, Kylie, for having me today.

Kylie Davis

So I'm really excited to have you on the podcast today because Evatat, we're the winners of the environment, Social and Sustainability most innovative startup. So congratulations on that win at the Proptech Awards.

Sonja Markovic

Thank you.

Kylie Davis

So no, our pleasure. So, let's kick off because I think you guys are working in such an interesting space and there's so much happening in there and I'm looking forward to talking about what some of that looks like as part of this interview. But what is the Evitat elevator pitch?

Sonja Markovic

Yeah, so, Evitat empowers renovators and owners to create healthy, low carbon and climate resilient home improvements, retrofits and renovations. So if you want so, it's similar to a service book for cars, but the Avitad Logbook or Elock book allows renovators basically to track and measure their good decisions and turn them into sustainable home value good for people and the planet. And the platform includes also a renovator community, vetted responsible businesses and enables, really, a circular ecosystem to educate and facilitate between growing demand and innovative, renewable and regenerative supply solutions.

Kylie Davis

Awesome. So this is such an important part of like, this is going to be so important going on, isn't it? Because at the moment or up until now, the way that we have renovated or upgraded property has been based on how can we make it worth more, but how can we ideally and what do we need to spend to do that? But it's really been around almost vanity or the perception of quality, luxury. It's not been around the green credentials of things.

Sonja Markovic

Absolutely. So I think in the last two decades we have shifted our perception of homes to be around the bench tops. Yeah, I do pull that part all the time. I think there are a couple of contributions to it. It's also that we have been messaged something really, I think in a wrong sense to build by size, for example, multiple retreat rooms and parents retreats and kids play areas and everything. Often enough these spaces are completely unused in the end or basically just being left as cluttered space storage, nothing else. But we need to consider that each of these added spaces are in the end actually added material choices and that contains a huge proportion of embodied carbon. And in future we are going to face a lot of changes in particular around properties, the way how, for example, we might get mortgages assessed and ability actually to access funds and the ability actually to get some credit loans and so on.

Sonja Markovic

So I think our insurance landscape is also changing with increasing climate risk and all these considerations are going to happen at once and this is the time where we need to really think carefully how do we renovate, how do we improve our homes and maybe even reconnecting them to the bare essential and the purpose of homes? We used to have homes really to live and to thrive as families or even as individuals and we used to live far longer in these homes. Nowadays it's all about resale value and quickly changing and turnovers and flipping properties. But it's also disconnecting us from the opportunity actually to create a community around us, a place, actually, where we feel really grounded. And I think that can add a lot into the well being of our mental health as well and I think reconnecting it to some sense of the livability of these homes, but also being very clear and more, I think, informed about, for example, material decision, home performance, what is actually a thermal comfort.

Sonja Markovic

It's not equal to your lounge and just being comfortable. And all these aspects actually matter. And I think in future they will even matter more in the wake of climate change and therefore become probably even shift the values of homes towards those ones which are more climate resilient and which don't actually are at risk to have massive maintenance costs and ongoing costs involved in general.

Kylie Davis

Yeah, so we learned that during COVID didn't we? The importance of home being safe, like being a place where your family could be safe from the outside world and where you wanted to be. And we got a really clear understanding during that period and during all the lockdowns as to what a healthy and a mentally healthy work living space was like compared to being in a small tiny unit or things like that. We saw really big differences in how people coped during lockdown based on how safe and comfortable and secure they felt inside their home.

Sonja Markovic

Yes, I think that really emphasized on the true purpose of homes and really made people think and although we are halfway back to business as usual, but I think we shouldn't completely go down that pathway because the challenges we are globally facing are immense. And I think it's really time to take that part and actually joining rather being a part of the solution. And there are two factors I think on a private level where you can make a big positive impact and contribute to a solution around climate change and that is what you decide on your finances and how you invest. And the other part is the investment in your home and including all renovation choices. Because let's say if you don't extend massively your home size, you will immediately cut out probably 20 to 50 years of carbon emissions. And I think to consider those kind of things also for our kids, for future generations and it's something which feels good and I think we can build up on that feeling and sentiment as well.

Sonja Markovic

But in general we need to make it visible and that's exactly what we are working on with the ELOG book. It allows actually to visualize these good decisions. That in itself has a lot of value also for future buyers because they know exactly that this property has been derisked and has added quality levels which other homes don't.

Kylie Davis

Right, so let's just pull apart because in the past when we've been renovating well, I don't know about you Sonja, but the only thing more painful than buying or selling a property is renovating or building one. Right? There is so many decisions you have to make, there's so many balls in the air. And price doesn't always determine quality. It's very easy to pay too much for things that are not worth it. And it's very opaque sometimes to understand what the quality, especially the green quality or the energy efficiency quality of some things are in the space. How does evertat work in helping renovators understand or builders understand that space?

Sonja Markovic

Yeah, so first of all, we are building a platform solution which has, I think integrated circular business solution. So we are bringing in vetted, responsible businesses who are committed to trust and transparency. So with that element we connect that to the logbook and connect actually your personal need and aspirations. Where do you want to see yourself if you're home in a few years or what is actually your need? You might have certain health aspects you want to attribute or you have more aspirations to really decarbonize with every step possible, like all these things matter. So instead of going into a very complex, let's say, modeling of homes with every single material choice, we have limited to those ones which we regard as sustainable and good. And that was developed with some really profound expertise from the industry side and allows us actually to track and measure in the sense around six core categories.

Sonja Markovic

So to simplify that process, it's around health, affordability, water and energy efficiency, comfort, social, environmental impact and carbon. And that allows us also to understand where these needs are, where these aspirations are, and then connect with possible solutions. And with that, it gives us also the opportunity to add continuously certain home improvements we have made or you are aware of, for example, from a previous owner. And if that has been, for example, processed through the platform. That information around material information but also installer information, even installer certificates, warranties. All of this will be digitally stored in your logbook. And you are creating over time this repository around the information. How your home has improved in terms of your energy and water efficiency but also which elements have contributed actually to decarbonize operational carbon or even, in the best case possible, if you have chosen, for example, biomaterials for your home improvements or for an extension or something that will also be captured and attributed to the general impact.

Sonja Markovic

So that's really valuable information for a lot of additional stakeholders during renovation because you have finance partners, you have organizations who give you mortgages, you have insurances and you have also local council, all of them are really interested in how you are making these better decisions and that's exactly what we are extracting.

Kylie Davis

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Kylie Davis

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Kylie Davis

So, who are your customers? What's your business model is? It something for B to C or is it something for B to B? How do you structure?

Sonja Markovic

Yeah, so we have been debating this for a very long time in the beginning, right? But as simple as that, I think there's a real big black spot on residential and it's really not easy to navigate, it's still not easy and hasn't improved over years. And that's exactly why we are focusing largely at the moment in our communication towards the residential domestic market. Our direct customers are actually the suppliers and professionals because they become member of the platform and then we connect them through recommendations, the logbooks and so on. But the audience we are talking to are actually residential consumers. So we are empowering them, giving them value, attribution to their decisions and connecting them also with some benefits. Maybe finance solutions, maybe in future, maybe also local government incentives. There's also other opportunities to explore, but also the ability actually to understand, for example, what are high, efficient and performing material choices which come completely untreated, for example, are really healthy for your home and for your family.

Sonja Markovic

So all these aspects play a role and we provide that information in terms of webinars where we invite, for example, one responsible business, but also always like a renovator or homeowner who has experienced that material or even renewable. Product solution and can actually talk about how it was, for example, during installation. And even after that, how it changed maybe the comfort of the home or other aspects of needs and aspirations.

Kylie Davis

Okay, so you're sort of B to C but you're talking to C's and funded by B.

Sonja Markovic

Exactly, yeah, exactly. On that side it is also a one to many revenue model. So there are aspects we are currently like, of course there's a membership fee which is fairly straightforward, but there are certain aspects around data, for example, and that's what we are going to explore with the next stakeholders. We are currently in talks, for example from the finance side as well as there are early talks also in the real estate sector and other components. That's a really interesting process and possible also very interesting pilots to organize.

Kylie Davis

So you guys are less than five years old I'm assuming because you won the startup category. How old are you? What inspired you getting it started? Tell us the story.

Sonja Markovic

Yeah, so architecture was always something were very interested in, although none of us has actually that pathway in their careers. But were working like 20 years earlier with a startup from the architectural side in Frankfurt and during that time we also realized, for example, the pain points of architects, how to source and find the right fit outs and fittings. And they created actually a huge database, online or digital database around office solutions and that was a very exciting experience to work with them. And then when we moved to Australia, I was working briefly with Green Magazine and had this real deep inside view into the pain points of the residential consumer side. There was a real outcry to have more trust and transparency into the market and actually a better access even to understand what does the market even offer? Are there any, for example, green products?

Sonja Markovic

And how can we even understand green products? What are they and how can we make the decisions around? So, with that information, there was already a certain idea in my head, but I think when the pandemic hit so even previously, sorry, 2017, there was one event which put us actually directly into the renovator shoes. We have a house in Queensland and it was very badly damaged during a cyclone and we decided to build back better. And then during that time, it felt pretty much as doing a PhD in all kinds of things like material composition, energy efficiency. And I felt so overwhelmed and coming with my background around user experience and system thinking, I'm like, why is it so difficult? Why do we make it actually so difficult for someone who wants to do a good thing and improve the quality of their homes to the point where people might even say, I don't care anymore, just leave it all completely to the builder and whatever he decides or she decides, it will be accepted.

Sonja Markovic

And that's exactly the problem. A lot of people are not aware that when I hand over that decision point, it won't be anymore around my needs and aspirations, it will be all about the profits I can generate as a builder. So I think we need to come to a balanced point where I, as an owner, need still to have certain ownership around these decisions, while also the builder plays a crucial part in the process, of course. So bringing that together is very powerful and can really enable a complete different way of looking at homes. And in particular when we make these decisions to invest in renovation and in like, for example, what do we want to invest in? And we had, for example, a renovator from Perth and she made a very conscious decision to invest in wood fiber insulation untreated because of health reasons.

Sonja Markovic

And it's a huge investment to do compared to the standard material choices. But she made it up on that decision. It's better for her health, it's better for her kids health, and she was adamant she really wanted to do this. So the builder had to be upskilled in the use of that material, but now he knows how to use it and can actually recommend it even to other clients. So there is a multiple effect we can utilize. And I think that's a really nice way to look into more regenerative material choices, biomaterial choices, and really decarbonize even the embodied carbon sector and then capturing that information again in the logbook for future buyers. Because it would be fantastic if, you know, for example, your home is completely let's say there's nothing with asbestos. You know that every new corner has been chosen very carefully with natural regenerative materials, biomaterials and so on, and there's nothing harmful in it.

Kylie Davis

So there's a couple of things that I'm I mean, there's a couple of things that this is kind of bringing up. The first is that I love your comment about needing a PhD in order to try and make these decisions because owning a home is such an adult thing to do and there's so much homework inquired in, just about anything that you have to do with it, isn't there? But at the same time, the cost usually of the mortgage or the financing to do this work takes up so much time in terms of work time that you usually don't have any spare time by the time you've dealt with a couple of kids and the shopping and cooking dinner and all of that sort of stuff that needs to and having a relationship with your partner and all these things that need to happen at the same time.

Kylie Davis

Who has time to do a PhD in Renovating to be granted?

Sonja Markovic

Exactly.

Kylie Davis

On the other hand, as a society, Australian homeowners are very keen on doing the right thing. And because we know that because of the number of solar rooftop that we have, we're one of the highest per capita. So we know that there's a huge interest in it. If I go onto your website, what is the sort of thing that I see? I'm a homeowner who's thinking about doing some building work or upgrading my home. Where do I get started?

Sonja Markovic

Yeah, that's a great question. So, first of all, I think it's an invite to understand what global problem do we face and what role your decisions can make. I think it's an invite to become part of that solution. And even if that means you are starting off, let's say, with a solar system, or you are interested in a hot water heat pump because you know your old hot water system is about to reach the limits. All these things. It doesn't matter if it's a major renovation or really one, let's say one heating or cooling solution which needs to be replaced. All of these aspects matter in the end. And you can start off with one thing and you can basically look, for example, for responsible businesses, even mentioned on the marketplace, you will be seeing these particular benefits. If you start, for example, a logbook, it will also connect you within the marketplace.

Sonja Markovic

The certain products or material solution will be displayed as recommended in your logbook based on your needs or aspirations. So there's a vice versa connection so that you can make sense while you're getting educated what is actually a sustainable home. So it is reconnecting it to the right material or product choices as well as very soon also to the right professional in your area. So that's really that holistic system and you can start off from the first small step if you want. So and even if that means you're just adding and logging maybe one thing you have done in the logbook that's enough to start off. I think it shows you immediately within the impact meter what it contributes to and it creates this sentiment similar to when we added our solar system in Queensland. It wasn't just about the cost savings. That was of course one aspect which was also a decision driver, but the fact that we are basically harnessing a sun's energy and it felt so good in that moment.

Sonja Markovic

And I think these sentiments we can really use and create a large community who is prepared actually to play a significant part in that solution so far, that conversation has been very driven by industry experts over years talking about how the industry can be actually the driver of solutions. But reality is it hasn't really changed much within the industry and the industry hasn't actually shifted it to become an entire solution. We need both sides, we need the demand and the supply and we need the professionals as well, because this is, I would say, a collective effort to really change the systems and that's what we are hoping actually to enable and facilitate without making it too complicated, rather having actually a place to know. These are fairly transparent material choices. I can see, for example, through the details there's an extract of benefits. But I can also dive deeper if I want to see even the EPDs and all testing results and everything that gives me trust and transparency in that choice and decision, as well as learning.

Sonja Markovic

For example, what is the experience of homeowners who have used, for example, a product? And I can make that very informed decision and either proceed with a certain decision or not. But at least I have the feeling it's all about me and the ownership around it and I don't necessarily need to install it, so get the expert in. And the same applies. I think. Also, for example, if you go through goal settings in the logbook, you can have far better conversations, even with, let's say a designer, building designer, or your passive house architect or the general architect around sustainable homes, because it is shifting a little bit. The conversation again from some very specific interior or exterior design elements really, to comprehensive understanding and prioritization around sustainability and the needs embedded in it and aspirations.

Kylie Davis

Yeah, I love that. I love too the fact that because one of the many conversations and listeners to the podcast know that my husband and I have had many domestics around renovating and building and buying and selling and all those sorts of fun things you do when you've been married for 30 years. But while you want to do the right thing, the question has always been gosh, how much is this going to cost us. But you know, that when you do the right. But I love this whole idea that you don't have to do everything all at once. You can just make the decision. Look, from today, the choices that we make are going to change. And because we've got this thing that needs to be upgraded, our hot water or the air conditioner or things are wearing out in the property, let's start one by one to make better quality decisions and having a resource like Evertat there to help you to not need to do the PhD in order to make the decision.

Sonja Markovic

Absolutely. It's not a linear journey, I think to acknowledge really it is a journey, it's a learning journey. When we had, for example, the damages at our home in Queensland, I was thinking, oh yeah, we just need insulation in the walls because they removed the walls just to make sure that we didn't basically encapsulated moisture within the walls structures. And, and I was really pushy at that time with the appointed builder to get insulation in and he didn't inform me, I wasn't educated enough to understand, well, without a moisture barrier, you might actually create a bigger problem than what you have intended to improve. And now I know that and I still don't know if they have put in any insulation or not actually hoping they haven't, because it might create more issues. But you see, this is exactly where I think it doesn't matter.

Sonja Markovic

Once you are on that journey and once you have done one step, for example, and, like, you know, it might start with a solar system, might start with a hot water heat pump, or you are maybe further, like here, for example, around Victoria, and you are freezing cold in winter and you start out with insulation, adding insulation in your roof cavities or something. It's fine. And even if that's the only improvement you are investing into that home, but knowing that it's captured and knowing that you can actually show it to a future buyer will create added value to it. And I'm so sure about this because we have a changing landscape. I think there will be certain things coming in place, for example, around mandatory disclosure of climate risk that will shift really the perception of quality improvements around homes, performance, energy performance. But in general, have you added actually an addition to your thermal envelope, what is even a thermal envelope?

Sonja Markovic

So we will have more of these conversations in future, what that means and how can I actually improve. And that's exactly, I think, where we contribute. A platform which has a strong community, which is growing, which has free webinars, the lockbook is pretty much for free to start with. You can lock your improvements, you can use goals, and there will be a lot more coming in the next few months. And then in the end, whenever you're ready, you can then create a sustainable home report which will be in future integrated with real estate platforms and really inform buyers in a comprehensive way. What have you invested? And that can be translated definitely in property value.

Kylie Davis

I love that.

Kylie Davis

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Kylie Davis

The thing I wanted to just pull apart that real estate, that report that you would give to an agent, is that something that through evertat as a homeowner I can produce so that I can educate my agent? Or should I also be expecting agents to understand more about this space so that they can help me get the most for my home when I go to sell it with all of these credentials behind me?

Sonja Markovic

Yeah, so it is, I guess, both. Because when we make these things more visible, even if they are listed in a report, if we supply in the end also the evidence install or installation certificates and so on, this becomes not just additional information, we are also immediately actually increasing information which is valuable for those ones who seek that information. And so far we have heard even from the big real estate platforms, for example, that there is an increase actually in demand and search for certain sustainable criteria around homes. Maybe like solar is very obvious, but I've seen a lot of property listings where you see for example, hot water heat pump but it's not mentioned anywhere. Probably because the real estate agent doesn't know how to identify. And what's the difference between a gas hot water system and a hot water heat pump? I don't really think this is something to leave on a real estate agent's shoulder to validate that information entirely.

Sonja Markovic

I think we should capture that information at the point of install or whenever that part happens really is attributed actually to that particular property. That's exactly how the platform even works. For example, let's say you order a hot water heat pump that all automatically goes into your lockbook as a client of that company and you can then continue even over time adding things, whatever you have done. But within the sustainable home criteria. Let's say you have like two years down the track, you have renovated all your bedrooms and you have chosen complete VOC free paints that can also be added in the logbook. So you are really creating that repository of information around it. And with that you will showcase the improvement in energy efficiency, maybe water efficiency. If you have emphasized on that as well. And then there's a drawdown, of course, in operational carbon, like I said, if you have made even specific material choices that will also be captured and contributing also to embodied carbon, fantastic.

Kylie Davis

So we know there is talk of a residential rating system for energy efficiency of properties coming down the path and that's probably going to be upon us very quickly in the next sort of 1218 months. I guess. This is Evertad is a fantastic tool to help homeowners understand how to go from a two star rating, up to a four star rating or even up to a seven star rating. Because my understanding is that there will be about seven stars in it in the end. What other advice would you give people, Sonja, who are looking to make a difference in their homes?

Sonja Markovic

Yeah, so look, I think I would definitely again, because I probably also changed my perspective a lot if I'm looking back 20 years, I had always this tendency to love big spaces, in particular mid century modern. There's so many influences. But I do think in particular, when you have a family and you have the first time that responsibility about a new life and you really want to make sure that the environment you are creating is healthy, that brings in so many aspects and the way how you choose, even all the little things for babies. You do put attention then as well into the living spaces and how they are created, with what kind of materials and are they comfortable. Do you constantly need to use, for example, some additional strong heating sources or cooling sources to keep them comfortable? Or is that actually not required?

Sonja Markovic

Because we have a really well performing home? I think we shouldn't also forget, if you have an underperforming home, it basically wastes and drains all your costs more money, right? Exactly. It's such a waste. And a lot of people are current in the current situation, actually, with the costs of living actually rising, they are already at breaking point and a lot of families are really suffering under that. That means also there's rising depression and anxiety around not being financially stable. It can cause so much, actually in terms of tensions between families and totally unnecessary because the homes should be actually a safe space and something which doesn't cost the earth. I do use this sentence from my very lovely colleague Simona Schenker, who is a pacifiers architect, and she's such an expert and she uses it in the sense really to think of affordability around your home.

Sonja Markovic

You don't necessarily need for, let's say, four people, household size a huge area. You need something which works well for you and you need something which is affordable in the long run as well. And if you're facing every winter monthly cost of $500 to $800, it's a huge drain of your pocket money. I think we need to consider these things and we need to have a little bit more awareness what actually a quality home is. And by creating this awareness we immediately start also judging differently, I think properties in the market and that will create then immediately also a demand on the real estate side for identifying these features and criteria in a better way. That's how I think we can pull these triggers on both sides and increasing the demand transparency and really delivering the right criteria to identify.

Kylie Davis

Fantastic. So Sonja, I could talk to you about this all day just quickly. How many people are in your prop tech? How big are you guys on the basis that you are still very new?

Sonja Markovic

Yeah, so we are a small team of five here in Melbourne and we have two overseas developers and that's it pretty much at the moment we are planning actually to grow over the next twelve months with at least two additional staff members overlooking us for sales and other areas. But for the moment that's the size we are operating on.

Kylie Davis

Okay.

Sonja Markovic

Yeah, it works.