The Promising Future Of PropTech In Real Estate
By Siddhant Chaudhary Digital transformation Real Estate Property Tech October 18, 2022
“Evolution is the most popular way we have for dealing with change.”
If Seth Godin says it, you better believe it. Change is constant and with the growing demand of real estate options, so grows the need for better, sharper and precise methods to find solutions. This is exactly where PropTech makes its entry.
Pandemic demanded change from us. The need to be able to handle things from a distance was a defining moment for us. Technology was the definite answer. PropTech allows interested real estate customers to access their options safely by digitally accessing them. That too with precision created around their needs and preferences.
PropTech is short for property technology. It is a tool to help optimize the buy, sell, research, market and management of properties. It is also known as Real Estate Tech, Retech, Realtech, CRE Tech. Whichever name you decide to call it from, it is essentially the sequence between technology and real estate.
According to the stats by MSCI - a finance company from the US, ‘The size of the professionally managed global real estate investment market increased by 7.8% from $8.9 trillion in 2018 to $9.6 trillion in 2019. The growth was higher as compared to 2018 when the market grew by 4.1%.’ Making real estate as one of the key contributors to the world economy.
1. Data driven decision making & Predictive analytics
But how does PropTech work accurately? Simple answer is by collecting data provided over the time by the people indulged in making the real estate choices.
Mckinsey shares how in a place like Boston, prices of the properties having Starbucks in their quarter mile distance increased by 171%. There was similar growth seen in properties having super speciality grocery stores such as Whole Foods and Trader Joe’s nearby.
Data reveals that having the right mixture of commodities in the vicinity, greatly affects the prices and demand of the property. The collection of such data and analysis is of paramount importance.
Big data analytics uses the correct algorithms to help the real estate industry in being more efficient while cutting the costs and making accurate decisions based on customer needs and guaranteed security. Eventually evolving them into a higher customer satisfaction experience. We don't have to rely on a single person and their professional opinion anymore. Data analytics helps us draw useful inferences from unstructured demographic and geographic data to effortlessly focus on customer needs and related investment trends by personalizing the whole communication.
How can we forget that using big data also contributes to an accurate appraisal of the properties in question, we can predict their prices better and the risk is substantially reduced, making the whole process a lot healthier.
collect information through artificial intelligence
accurately analyze it
build the data
provide accurate results
Insights retrieved from the data sources, social media and surveys can magnify your focus on the target market. Big data provides real estate agents with information based on gender, age, preferences, interest and region which can eventually help them in targeting the right audience and optimizing their campaigns accordingly.
2. Virtual Interactions
The future is filled with virtual interactions. We already heavily rely on it in terms of communication in daily life. The virtualisation of interactions revolving around property display and its selection is a strong part of Propetch's existence. Virtual tours, virtual home inspections, virtual front desks are some of the augmented reality solutions for which are slowly evolving the industry by effectively promoting business consistency from a safe distance.
Virtual interaction compensates for your lack of physical presence, allowing you to examine property remotely. IrisVR is one such example of a software company and a tool built to transform floor plans into VR experiences for users to examine anywhere.
In property management the evolution towards virtual interactions is setting ground for the future of the real estate industry. Face to face intercom is replacing in-person interaction and home buyers are using video conferencing to discover new homes and getting their best deal.
Two way intercoms tackle one of the most important aspects of modern life. Online purchases resulting in high delivery-volumes are simplified by two way intercoms with a remote access. Identifying your packages and providing the delivery person with the one time pins is a swift process due to the two way intercoms.
3. Efficient and secure transactions with Blockchain
It is astonishing how big the real estate industry is and yet it heavily relies on outdated methods of transactions. Papers being filed, forms being filled and the sensitivity towards these documents being prone to fraud, are some of the prominent issues with the current non digital transaction system. Have we mentioned how this paper based system is not only susceptible to human error while it takes so much more longer to sort through, but also bad for the environment?
Both government and private sectors of real estate are realizing the potential of blockchain technology to all the mentioned issues.
The current typical process consists of:
- physical deed must be delivered to a government employee at the local recording office
- it is subsequently scanned onto the county’s centralized database
- data points from the deed are manually input onto a public index
- which is relied upon to determine ownership of each piece of property recorded thereon
- any subsequent transfers of, or claims to, real property must be manually reconciled with this public index.
However with Blockchain the whole process is reduced to an electronic structure. Saving the government and its employees a huge amount of time and energy by greatly reducing the workload. Blockchain not only reduces the need for constantly scanning documents or organizing files it also relocates the human resources to better use.
Blockchain transactions in real estate also ensure that no third party attacks happen. By keeping all the processes involved in a deal “on chain”. Which is a costly procedure, thus discouraging any attempts of maliciousness and theft.
No single resource has the capacity to keep all of the real estate data backed up in case of emergency occurrences. Blockchain ensures that the processes involved are kept on ‘nodes’ spanning geographical and demographical limitations. Improving security with each added node.
4. IoT for efficient monitoring and data collection
An IoT is a platform that provides optimization by collecting all your data into one space. You might have data stored on different platforms and devices and all of that data would still be useless. Unless it is bound together to create a whole form and that is exactly what IoT does for you.
Vodafone shared that “a whopping 73% of businesses agreed that companies who fail to get on board with IoT will be falling behind within just five years.”
IoT devices are designed to collect your data in real time without the suspicion of crashing or malfunctioning. Thus storing your data safely in one place. They give you a full view of your assets and insights into how your product is doing. Resulting in a rapid action from your end. Other devices connected to your IoT device can detect its data and use it to analyze rapidly, reducing the cost of hiring a consultant for the job. Hence, making it a cost effective investment as well.
IoT is also great for people working remotely. It connects the data between multiple people giving them access when needed on a shared basis.
5. Investing In Sustainability
So apart from bringing the real estate process up to speed and reducing the risks involved, how else is Proptech helping us?
Proptech is good for the earth. According to an estimate, real estate accounts for 40% of the world's energy consumption and third of all carbon emissions. It goes without saying that sustainability is the need of the present so we can have a safer future. Investing into sustainable workplaces, buildings and communities is one of the steps towards taking credit for climate change.
Anyone looking to reduce their carbon footprint can not do without smart technologies. Real estate industry leaders are actively turning towards proptech sustainability solutions. Proptech not only reduces the carbon footprint but also saves a substantial amount of money in the process. Proptech eliminates the need to pay a lot for the waste services. It also saves our time and efforts traveling around areas identifying the property you want by saving energy usage.
Investing in sustainable solutions like Proptech will not only ensure financial savings, it will also result in customer satisfaction and a healthier environment forus to thrive in.