How is proptech changing real estate?
Real estate has always been dictated by changing market conditions and consumer behaviours. Recently, however, technological advances in the industry have changed the game. Proptech has paved the way for more profitable property decisions, reduced inefficiencies, and improved customer service experiences. Innovations such as digital property marketplaces, on-demand showings, and tools for gaining access to contracts on-the-go have vastly improved efficiency and convenience within the real estate sector. The following tech trends have minimised downtime, expedited contact with clients, facilitated bookings and last-minute decisions, and enhanced collaboration in real estate.
What is proptech?
Real estate property technology, aka, ‘proptech,’ has revolutionised property buying and selling. Proptech encompasses all forms of technology which relate to the real estate industry, including software like portals (EverEstate, for example, or ImmoScout24), as well as hardware, materials, and manufacturing. Huge tech companies such as Amazon and Facebook have joined the likes of Airbnb in the growing proptech business. Amazon ventured into residential real estate, Facebook has added rentals and sales to its Marketplace, and rent-bidding apps are on the rise in Australia. More commonly, the term proptech is used to describe startup companies working to propell the real estate industry into the 21st century. For example, there are proptech companies called “iBuyers” are using AI (artificial intelligence) technology to offer home sellers an algorithmically-determined "fair cash offer" for their properties within 24 hours. The companies then renovate the property and sell it on. Proptech services such as these have made significant strides in increasing accessibility and transparency within residential real estate.
Big data and proptech
Data analytics have enabled both companies and individuals to make informed decisions about investing, managing, and operating in real estate. Big data is used by real estate companies to extract and provide information such as property history, ownership cost, current value, details of the neighbourhood, estimate of mortgage payment, and estimated forecast of a property’s value. This information is collected through public data records, market information, and various other data points. Past patterns, online habits, and trends are analysed in order to predict future actions, intent, or property prices. Using big data also provides access to new listings, current market conditions, and lucrative deals. With growing concerns surrounding big data and privacy, the same concerns have made their way into the residential industry with the rise of proptech. Not to worry, though: there are countless security measures put in place to ensure privacy, and the data collected in proptech is used for the benefit of the property owner, rather than for profit by the company.
‘The Cloud’ is no longer an elusive or intangible part of the internet. Now, real estate industry leaders are using cloud technology to streamline online property management. Taking advantage of the Cloud has countless benefits, including affordability, accessibility, better security, and scalability. Cloud technology provides users with around-the-clock, real-time insights into property and financial information, which users are able to access from their device of choice. This includes messaging platforms, which some proptech companies focus on providing between landlords and their tenants. Tenants and landlords can exchange and access important documents and communicate easily, with everything on record. This allows operations to be managed more efficiently.
You might have heard of cryptocurrencies such as Bitcoin making headlines in the past couple of years. Blockchain is the technology behind them, and it’s revolutionizing real estate transactions. While it's not categorized as proptech, it is becoming a huge component in real estate industry's technological transformation. Blockchain is a public, digital ledger or database that records all transactions, without the need for a central verifying authority such as a bank. Real estate assets can be tokenised and made transferable with blockchain, allowing users to buy shares of real-world assets with cryptocurrency without the barriers imposed by traditional financial institutions. The elimination of a middleman means legal and title-related costs are drastically reduced, and the settlement process is accelerated. Blockchain also provides secure means to manage, validate, and store property documents in order to prevent fraud. It's likely that over the course of the next decades blockchain will be a huge part of proptech.
Augmented Reality and Virtual Reality (AR and VR)
AR and VR technology has made selling and buying property more accessible than ever. VR allows potential buyers and renters to virtually tour multiple properties from anywhere at anytime. This way, they can see a realistic representation of a building before making a time-consuming and potentially costly visit in person. AR transposes virtual elements onto the real world, which comes in handy when showing buyers a property that is still under construction. Using AR technology, developers can demonstrate exactly how a space will look after renovation is complete. AR can also be used to show how a room could be furnished, giving prospective homeowners a better idea of how a space could be used.
While real estate has been relatively slow to adapt to technological change, the industry is finally catching up to the rest of the world. Proptech transformed the landscape of property buying and selling over the past few years, paving the way for a more transparent and accessible approach to real estate. The application of tech tools such as these has measurably increased profit, and taking advantage of them will inevitably simplify operations, curtail costs, and lighten the workload when it comes to real estate ventures. To learn more about how EverEstate has digitalized the real estate purchase process, read about our digital approach here.