It should be surprising that considering the current investments in proptech, real estate has been slow to adopt innovation. But this...
PropTech – what is it? See examples of tech transforming in real estate industry
- What proptech is and why is it an important topic?
- Okay, but what is proptech actually used for? We will introduce a few possibilities.
- So what is the future of proptech?
Why is proptech a hot topic?
In general, proptech is technology for real estate. It’s becoming another hot term in tech, along with its not-so-distant cousins fintech, edutech, HRtech, and all the other “techs”. In real-life terms, it’s a category of technology startups and companies that create solutions to make planning, managing, trading, and using real estate more efficient and easier at every stage of a building’s lifecycle.
Although proptech has been slower to catch on than fintech, the investment volumes have been steadily growing, hitting $12.9 billion in the first half of 2019 according to CREtech research, and are predicted to continue to rise.
Mostly because the office and retail sectors are already disrupted by technology (think sharing economy, home rental platforms, and coworking spaces). Proptech is transforming the real estate industry – both its residential and commercial side, pretty much in the same way Uber has transformed the taxi business and Airbnb – the lodging market. So companies turn to tech to catch up with the new reality and keep a competitive edge while still making profits.
What is proptech used for?
Although proptech might still sometimes seem like a vague, underdefined term, and the definitions will vary, here’s what the landscape it fits into looks like today according to a proptech company Immobilier2.0
The term can span both software and hardware and can use 3D printing, data visualization, AI, AR/VR, blockchain – and whatever technology there is that could make buying, selling, renting, managing, and using properties easier.
What’s more, proptech doesn’t just introduce technology into the real estate industry. It also changes the long-used traditional business models to ones that are more efficient, cost-effective, and customer-friendly.
Using the latest tools and tech, proptech offers services and platforms for real estate professionals, property owners, and investors, while also catering to the other end of the real estate spectrum – end customers and their homes.
In fact, according to research, more than 50% of proptech companies focus on sales and leasing, while only 16% and 12% provide solutions in construction and investment/financing respectively.
Let’s look at some specific examples (to which proptech is definitely not limited.)
Managing construction sites
This is probably the most costly and time-consuming part of the property lifecycle – which explains why it’s so challenging to employ proptech at this stage.
Services like PlanRadar have essentially expanded project management software platforms dedicated to the construction industry. They help with making plans, creating and keeping documentation, and communicating throughout construction projects.
Other tools in this category are building information modelling platforms (BIM), cost estimation tools, and modular construction tools used for buildings made from pre-produced modules that are put together on-site, making the whole process more efficient and eco-friendly.
Selling, buying, and renting a property
A large portion of the proptech landscape is property portals and marketplaces a lot of us are already used to and don’t even consider “proptech” (or any kind of tech). An important aspect of how these platforms work is that they have been ultimately changing the way we buy, sell, and rent a property.
In this category, you’ll find platforms like Rentberry – that connects tenants and landlords and makes price negotiation easier, or Reali – a real estate platform that employs real estate agents working on salary instead of commissions, which allows for a completely different buying experience.
Platforms like Zillow and other digital marketing tools, on the other hand, help automate the process of advertising property listings and reaching the right audiences with online display ads.
Another proptech application is virtual home tours, which are far from a novelty but are becoming far more accessible these days. They use 3D modelling to allow the buyer to take a virtual walk around the property they’re thinking to buy.
While not so long ago this was cutting-edge technology, companies like Matterport are making it available to virtually (sic!) anyone. The service offers cloud subscription plans for 3D cameras to capture, create, and display 3D models online for others to view. Which also saves landlords and property owners tons of time they’d normally be spending on property viewings.
Investing in property
Blockchain technology has changed a lot in how people invest, and that includes real estate. In this category, at the intersection of proptech and fintech, you’ll find platforms like Atlant.io. It uses real estate tokens representing shares in individual real estate assets to make investing in and trading with property easier and more transparent.
In this category, you’ll also find some other concepts already popular in fintech, like crowdfunding and peer-to-peer lending, market valuation tools, and mortgage brokers.
An interesting concept in market valuation is, for example, Zumbly, a platform that assesses your property investment plans by generating a real-time score to help you determine how much you could earn by renting out your property as an Airbnb, based on over 500,000 calculations.
In the age of remote work and startups, coworking is becoming the alternative to corporate office rentals. The pioneer in this category is WeWork – an American leader in providing shared and private working spaces for tech startups around the world. Their online platform lets you specify the desired parameters and locations. What’s important, it’s not just focused on providing office desks, but creating an environment where entrepreneurs can grow and expand their businesses.
These kinds of services already got their own category name – SpaaS (Space as a Service). Today, tenants are offered not just space, but everything else they need to be able to use it effectively.
To help people in coworking spaces organize their work and increase productivity and comfort, companies like Spaceos provide the tech and tools to enhance the workplace. Their mobile and web app combines features like community, booking, support, payments, food and beverage orders and a variety of services in a cloud-based SaaS platform.
Smart buildings and property management
According to Statista’s research, smart building technologies are one of the most disruptive innovations that proptech is responsible for. Complex building management systems (BMS) already control electrical systems in many public buildings we visit every day, automating things like lightning, heating, ventilation, security and data collection.
Sophisticated services like Gooee are largely based on IoT technology, and their applications are endless – from improving energy efficiency to improving the wellbeing of employees and their productivity.
Smart home devices
Proptech is also behind one of the most talked-about consumer-facing technologies including smart speakers and voice-activated home assistants.
By far one of the most popular is the Amazon Echo Family (yes, it’s proptech, too!) – Bluetooth speakers powered by Alexa that can be configured to control most of the devices inside our homes.
In fact, smart home technologies are becoming a must for the younger generation. In a recent survey by ButterflyMX, 86% of them said they were willing to pay more if their apartment had smart technologies. This is, in turn, putting more pressure on property managers to raise their standards if they want to attract and retain millennial renters.
What’s next in proptech?
We’re only at the very beginning of the proptech revolution and future proptech trends are a topic for a whole other long article. Some predict proptech will replace people in the industry – like real estate agents – but I’m sure we all know that to benefit from smart tech, we need smart people working behind it and operating it.
What we’re likely to see, though, is tech supporting building communities and co-living – another strong trend after co-working and an antidote to urban loneliness (plus the answer to the fact that young people in major world cities can’t afford to buy their own homes).
Facing an imminent ecological disaster, a leading trend will most likely be using tech to employ eco-friendly solutions in the real estate industry, reducing its carbon footprint.
Many companies turn to tech to catch up with the new reality and keep a competitive edge while still making profits. Maybe you also got a new idea to expand your business? Write to us, our amazing team can help you!
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