Real estate is the largest asset class in the world and it continues to grow at a rapid pace.
However, the real estate industry has been one of the slowest to embrace new technologies. It has only been in the past few years that we’ve really started to see the emergence of the next generation of PropTech companies.
PropTech refers to using technology to help improve the way the real estate industry operates. It’s a broad term that encompasses all elements of real estate, from the way in which properties are sold, to things like settlement, how properties are listed for sale or lease, even the ways titles are tracked. The list of ways that PropTech is disrupting what is a very old and established industry is virtually endless.
Property’s digital transformation is also happening not just on a practical level, but also on a cultural level, as the industry-wide adoption of these new technologies also growing at a rapid pace.
This transformation began when listings first started moving from Saturday’s paper and onto online portals. Now, it’s rare to see a property just listed for sale in a traditional newspaper. This transition comes a lot of advantages to both sales agents and vendors, who can use these listings to generate leads, track data and ultimately fine-tune and improve their sales and marketing processes over time. All of this wouldn’t have been possible without PropTech.
At the heart of PropTech, are people who are identifying problems and inefficiencies within the industry and these start-ups seek to find solutions to those problems.
These problems can include automating mundane tasks, streamlining the research and planning processes, managing properties or just trying to remove elements of the industry that are not working effectively.
The Next Stage of PropTech
While property has been one of the slower industries to move towards technology-based solutions (compared to, for example, FinTech), many PropTech companies have grown at a rapid rate and are now market leaders in the space.
The next phase of PropTech is starting to look at other problems with a big focus on using data, blockchain and tools like AI and machine learning to enhanced predictive analytics. This has an important role to play in real estate, especially in areas like marketing where sales agents are trying to locate suitable buyers.
In the past 18 months, there has also been widespread adoption by both buyers and sellers with technology such as virtual reality, which helped facilitate transactions without the need to be physically present.
This has been especially helpful in the age of COVID-19 where in person inspections were simply not possible. The addition of this kind of technology helped the real estate industry continue to thrive throughout the pandemic.
Augmented reality is another area that will have a big role to play in the future of real estate is particularly beneficial for off-plan developments. When selling a property that isn’t yet built, a buyer can effectively view the property with AR technology, to better understand what they are buying.
Helping Not Replacing
While many people fear technology and what it means to certain industries, property is one such industry that will always require a combination of both technology and human interaction. Real estate, for the most part is a relationship business, meaning that you still have to get out there and talk to people and build and nurture relationships.
This part of the process can’t be replaced by technology, no matter how advanced it becomes. While PropTech can work to remove inefficiencies and roadblocks for agents, its role is largely to assist in making agents and those in the industry already, better at their job by being more productive and effective.
Whether that’s through streamlining processes, making marketing processes more effective with greater reach, or by simply eliminating redundant activities, PropTech has a big role to play in the future of real estate.
PropTech Group CEO Joe Hannah explains more about the PropTech Industry in this video.