PropTech 101: How Property Technology is Revolutionizing the Real Estate Sector
Updated: Nov 21, 2020
No single industry out there is immune to the rapid technological advances in today’s world.
However, when it comes to the real estate sector, it’s the industry that doesn’t readily embrace change.
While buying a piece of real estate, there's so much more that goes into the entire process than a simple, straightforward financial transaction.
Not only is it highly-complicated, but time-consuming as well as it involves property zoning, endless contracts & affidavits, compliance inspections, etc.
With PropTech being one of the biggest buzzwords of 2020 and hottest topics in the real estate industry, it’s designed for streamlining and modernizing the hefty process of browsing, buying, as well as building real estate.
In addition to this, out of the 7,000 PropTech firms existing in today's world, nearly 550 operate from Asia with the highest number of these firms boasting in India(170), China(144) & Singapore(84).
Companies like Airbnb, OYO and WeWork have already become some of the hottest topics in the technology sector nowadays, while there are still thousands of newer generation PropTech startups following their footsteps and trying to disrupt the existing real estate industry.
But the question is, “What exactly is PropTech?”
In this blog post, the following sections have been covered:
What is PropTech?
Technologies Disrupting the Property & Real Estate Industry
Let’s get rolling!
What Actually is PropTech?
“PropTech’s a small part of the property industry’s wider digital transformation. It’s a movement within the real estate industry that’s igniting a mentality change regarding technology-driven innovation in transactions, data assembly, design of cities and buildings.” - Andrew Baum & James Dearsley in Davenport
Just like FinTech is all about technology's use in finance, PropTech, which is a combination of two individual words, i.e., Property & Technology, utilizes digital innovation for addressing the needs of the property industry.
There’s no single party involved that’ll heavily benefit from this. Instead, right from the buyers to lenders in the residential sector and right from investors to property management companies in the commercial sector, everyone involved will be subject to its wide range of benefits.
Data revealed by Statista indicates the number of PropTech real estate startups to rise at an exponential rate in the past 10 years. Although we see a decrease in the number of new global PropTech companies launched after the year 2014, the volume of capital raised and the number of funding rounds closed globally has reached a record high in 2019. This has shown that the market is gaining its maturity, and some of the PropTech players are really excelling in their own game and started transforming the real estate industry bit by bit.
Technologies Disrupting the Property & Real Estate Industry
“People rarely need to understand what a software, system or platform really is – and by this statement, I mean how all of its combined and put together as well as its inner workings. All people need to know is how it works.” - Emily Wright
Some technologies driving the change are:
Big Data Analysis & Visualization
Application Programme Interfaces (API)
Websites & Smart Phone Apps
The Internet of Things (IoT)
Artificial Intelligence & Machine Learning (AI/ML)
Virtual & Augmented Reality (VR/AR)
Smart Home Tech
Blockchain & Distributed Ledger Technology (DLT)
Battery and Construction Tech
Geospatial & 5G Technologies
Property management and real estate industries will benefit the most from big data.
The more data there is, the higher number of data-driven decisions one can make.
Websites like Redfin, Trulia & Zillow have harnessed the power of big data and can now compile and, in some scenarios, collect data on traffic, buying and selling trends, and consumer survey results demographic information in a certain area. This information is then analyzed and collated to offer insights on home-value trends, pricing, and potential value in some neighborhoods.
This is how websites like Zillow, Redfin & Trulia deliver high-quality insights to real estate audiences.
The Internet of Things
Any device that’s connected to the Internet is called IoT.
According to 2019 estimates, this number stands at 29 billion.
IoT holds the potential to revitalize the real estate sector and individual's daily lives due to its varied application right from predictive maintenance to a rapid decision.
For example, Better@Home uses IoT to offer a tailor-made, modular expandable solution to equip real estate with comfort and age.
This concept focuses on older folks being able to live inside their homes for as long as possible without worrying about compromising self-determination and safety.
Virtual & Augmented Reality
With VR & AR, it’s now possible to offer a highly-interactive three-dimensional video piece of real estate that can be accessed cheaply and remotely.
When combined with BIM, architects can provide a real close interpretation of the designs, resulting in reduced site visits and trips.
But currently, a breakthrough that has shaken the real estate industry is the mass roll of 5G. This increased processing power due to outstanding digital connectivity has led to a boundless adoption of ‘smart glasses.’
This holds the potential to change how people interact and perceive any given space.
Popular applications like Instagram & Snapchat have enabled users to use filters for augmenting their nearby environment.
This digital augmentation in the physical world can be taken to the next level via smart glasses.
PropTech's one of the hottest things in the real estate sector, and the thing is, we are just getting started.
Soon, we'll be witnessing significant improvements and changes in this field.
Hence, if you are a real estate professional, you shouldn’t miss out on this revolution.
More about ourselves: PropTech Institute is an independent, non-profit association representing Asia’s PropTech community led by a team of committed professionals. The association seeks to bridge the gap between real estate and tech as well as providing a platform for founders, enthusiasts, professionals, and all those interested in PropTech to share knowledge in the application of technology in real estate.
In order to help you master the concept of PropTech, we’ll be posting high-quality and value-adding content on a regular basis. Explore our recent updates here!