The property market is in the early stages of technology innovation, and developers, investors, and other stakeholders are getting onboard and embracing the future. A range of technologies are set to transform the construction and property market, including augmented reality (AR), drones, and artificial intelligence (AI).
A term that is becoming more widely used in the construction and property industry is “PropTech,” – a term coined from “property” and “technology” – a movement within the real estate market that is innovating transformative technologies, with eyes firmly fixed upon exploring the digital layout and reacting to new ways of consuming.
According to Jamie Johnson, CEO of FJP Investment, “This burgeoning technology is increasingly being utilized by property investors, developers, estate agents, and property management services. Rather than being a disruptive technology, these innovative technologies are set to transform the real estate sector at every level. Those who embrace technology will thrive. ”
Proptech is a general term that articulates how the real estate industry is leveraging technology to innovate and optimize how people research, rent, buy, sell, and manage property. This technology reaches all areas of the real estate industry, from developers to investors, and is proving beneficial to all concerned by saving money and making services more efficient and easier to use, as well as enhancing the consumer experience.
Traditionally slow in the uptake of innovation and technological change, in 2020, the property industry accelerated the use of technology largely thanks to the pandemic. The industry has grasped how important it is to adopt these transformative technologies to thrive in a changing, digitized world.
Everyone stands to gain benefit from proptech, from new build property pursued by developers and homeowners to tenants and property management services. Although the concept of proptech has been extant for some time now, in recent years it has undergone a dramatic update to match the prevailing times. Some of the investment in proptech is motivated by cost savings, streamlining operations, and better decision making.
The Technologies Being Sought
Augmented reality (AR) and virtual reality (VR) are technologies that are being taken up by many industries, from travel to healthcare, and the real estate industry is no exception. It allows architects and engineers to visualize 3D representations derived from 2D blueprints, as well as prospective investors or home buyers to visualize what a property development will look like once it has been completed. AR apps can be used as a digital interactive tool to do virtual tours without being physically present.
Artificial intelligence (AI), machine learning and Big Data are greatly increasing in demand across all sectors. Accumulating data is a core activity during the buying and selling phase. For example, utilizing tenants’ data to offer them tailormade additional services like personalized insurance that is better suited to their requirements.
AI will also facilitate automated price comparisons and the speedy operation of housing searches, as well as fast and efficient access to relevant data. Information sharing of this kind will, in turn, usher in a more open property market.
Drones are being used more and more during the process of buying and selling real estate. They can be used to take footage to showcase the property to potential investors, or to help with construction projects. Furthermore, they can be used for things like checking roofs or flooding for damage.
Blockchain and the internet of things (IoT) are not widely used in real estate now, but this will likely change. As digital currencies, including proposals for Central Bank Issued Digital Currencies (CBDCs), are increasingly being used and introduced in all sorts of transactions, it’s probably just a matter of time before real estate follows suit.
More houses and buildings are being upgraded by installing IoT devices and systems, such as smart meters, remote thermostats, alarms, and touchless asset control systems that are better suited to pandemic circumstances.
There’s no doubt that an assortment of Proptech and Fintech (“financial” and “technology”) sectors are benefiting greatly from technological innovation, from the digitalization of transactions, investments, and mortgages to the digitization of legal documentation for landlords, estate agents, and tenants.
Proptech came hot on the heels of Fintech, about 5-10 years later. Fintech is mainly a way of doing things compared to offline solutions, such as with banking systems for the use of end-users. In contrast to this, Proptech is starting to have transformative power for the entire real estate industry.
A recent trend appearing in the Proptech space, because of the pandemic, is the space-as-a-service phenomenon, as business owners and management seek new ways to adapt their offices in pursuit of alternative functions and ways of operating.