They say that change is inevitable. Well, it’s not just inevitable—it’s already happening. W live in a world where the impact of technology has disrupted all manner of industries, and at breakneck speeds. It’s happening all around us, changing the way every one of us lives our lives, whether we can see it happening, and feel its impact directly, or not.
If you’re running a business, and you’re one of those people with your head in the sand, then sadly, you’re going to get left behind. And, if your business is part of the property industry, it could be sooner than you think.
Within the property and real estate industry, change is rife—and the name of that change is Proptech.
Proptech, it doesn’t take a genius to work out, is an acronym of property and technology. This fast-growing trend is the result of a digital generation streamlining, advancing, and in many cases, outright replacing existing soon-to-be out-dated systems.
What is Proptech?
Most simply put, it’s the digital transformation of the property industry. Yet what does that mean for us? Well, with new technology introduced to replace old systems, the industry is more efficient. That efficiency makes life better for consumers on every level.
For everyone in the industry—builders, developers, owners, renters, agents, and more—they can expect everything to be bigger, better, faster, and cheaper; wherever they turn, and in just about everything they do. On top of that, consumers want everything at their fingertips; it’s almost expected in the current climate, and with the least amount of fuss and stress possible. The property industry is no exception.
For these changes to become a reality, the only thing that’s going to make them happen is technology. And changing it is.
However, it’s not just the tech that matters. It’s the people behind it. Too many existing players are buried in their old ways. It’s the new wave of excited and energetic forward-thinkers that have all the skills and knowledge for the job. They’re ready to prove what they can do, to change the face of not just this industry, but also of the world we live in.
Proptech also defines the businesses that are making the biggest waves.
Proptech is also the phrase to define the multitude of new business startups addressing the areas of the industry they know they can advance.
These new businesses, their products and models, are the new wave of tech industries providing the change in each sector directly impacting property and real estate. There are several sectors impacting the umbrella of Proptech industries:
Proptech covers all of the real estate startups.
Contech is the wave of new smart businesses impacting construction.
Fintech startups are changing the way each of those operations moves money around—safer, faster and more efficiently than ever.
Then there’s all the Smart Real Estate—tech-laden developments creating intelligent buildings and cities.
If you aren’t sure how much faith and hope the financers have in these new businesses, just take a look at the massive interest they’ve shown so far. At the beginning of the previous decade, investment in real estate technology was relatively low. By 2016 the figures had grown from $221M to £2,666M.
And today? Billions of dollars are invested in hundreds of startups. It wouldn’t be happening if those investors didn’t believe in the projected returns they plan to scoop from these growing opportunities.
As this new sector of the industry finds its feet, more of its key players will become household names. Over time, they’ll become part of everyday life, and so far, these are a few of the more outstanding operations to impact the industry and to have significantly changed the way it operates.
- Compass – a network of real estate brokers
- Homelink – a Chinese real estate portal
- SMS Assist – a property management and repairs service tool
- Opendoor – developed an algorithm to buy and sell homes online
- Zillow – rental property management
- The Guarantors – rental property management
- TenX – real estate sales
- Purplebricks – real estate sales
- VTS – commercial real estate
- Habiteo – real estate development
It’s the US market that has seen the most funding over the past decade, with 57% of the total global investment. Not so hot on their heels are Spain and the UK with 12.4% and 10.8% respectively. Whatever and wherever the figures are highest, the growth over the past 10 years isn’t merely a fad—it’s a sign of how the world is changing, and what we can expect more of in the future.
Proptech set to streamline every point of the process
Which businesses should be worried? Well, the ones that think they’re safe to keep operating as they are.
There isn’t a single point in the construction to real estate chain that couldn’t benefit from streamlining and improvement. Most of the functions in key areas are considered dinosaurs, waiting to be improved by the new tech-wizards with all the answers.
- Construction (Contech)
- Financing (Fintech)
In any of these areas, there’s room for creativity and technology to address the way they work, rebuilding the worst of them from the ground up.
Currently heralded as being in the middle of the fourth Industrial Revolution—this is the era of automation and digital process. What are these processes that are changing the face of the world? The following are the key areas that are creating the most change. And why shouldn’t they impact the way we build, buy, and sell houses, homes, and commercial properties?
High-speed connectivity, mobile technology, and cloud computing have opened up the opportunity for agents and vendors. Yet it’s the science that has opened the gateways for the prominent minds to create such new systems.
AI is everywhere, and when it comes to interconnectivity, it’s AI that’s going to enhance the experience. Your interaction with the software these ‘life upgrades’ bring will be made simpler and more straightforward, the smarter the systems become.
Automated processes provide faster, more efficient results; robots perform roles 24/7 without breaks and delivered precisely when required, instead of becoming lost in a queue of consumers, each waiting their turn.
The data gathered by the connectivity of our devices, tools, and equipment, is used in the decisions involved with building, spaces, real estate tools, and systems. Big data is huge. It provides the information we use to build our new, streamlined solutions.
Internet of things
The Internet of Things is responsible for the way that our devices and appliances are slowly becoming interconnected, via the Internet. From now on, sensors in everything from your lighting, heating, white goods, cars, TVs, and more, create more data and control over the things we use each day. The data allows for better planning and production—the fingertip control of all of our devices, accounts, and operations, is a consumer dream-come-true.
Blockchain is best known as the system behind cryptocurrency. It’s an incredibly secure and almost immediate system that lends itself perfectly to the transfer of documents, agreements, contracts, and finances.
Augmented and virtual reality
Interactive property viewings—available as walk-throughs for buildings or renovations still in the design process—have become commonplace, especially with architects and designers. Being able to view a property from thousands of miles away, delivers a quality of service to agents and vendors whose customers expect far more than a few photographs and a floor plan.
It’s also a great tool to get investors on board, having them witness the final product at the beginning of the process.
Project management and property development software
The connection of a team of suppliers, constructors, investors, managers, and more, to all be on the same page as and when issues arise or positive actions happen, is easier than ever with digital management tools. The same goes for agents, vendors, buyers, and sellers, who can each update the progress of sales and negotiations, at any point, and from anywhere.
Not only can 3D models be produced to the finest and most accurate detail, but specialist building components and parts are manufactured as one-offs, where production in such small numbers would once have created problems.
It’s not solely the software that’s driving such colossal change. Technology is growing in every area of the industry, and the hardware available is ever-pushing boundaries. Constant advancement, not only in control and delivery but the design and development of new materials and practices, are all part of the Proptech movement.
- Lighting, heating and home systems components and controls.
- Monitoring energy consumption, tracking, maintenance, and repair.
- Drone use for site detailing, monitoring, and planning.
- Cranes connected to the Internet of Things provide data, improving onsite safety.
- Automated housekeeping, cleaning tools and facilities.
- Smart paving, roads, and footways.
- Smart bricks that keep pace with climate changes and temperature control.
- Energy-efficient self-cleaning glass panels and windows.
- Energy use and eco-systems.
- Development and creation of advanced building materials.
- Provision of more abundant and lower-cost materials.
- Transport and assembly.
As an investment opportunity, it’s worth understanding that the real estate market is the largest asset in the world.
The property industry contributes $3.5 trillion to the US GDP. $1.3 trillion of existing homes transact every year, which generates around $66 billion in commissions for real estate brokers.
With such extensive figures on the table, it’s easy to see why investors worldwide, would like a big slice of that particular cake. Whether they choose to invest in construction, the property market, or in creating more streamlined systems to manage an antiquated rental market—there’s a line of profit for innovation at every juncture.
The key area, however, that shouldn’t be overlooked, is the talent taking hold of poorly functioning areas of the industry, developing new methods, and delivering far superior operations.
Whatever technologies are available, it’s these hands that they’re in that are most important. Living in a generation of high-achievers, rule and record-breakers, change is coming, and for most, it’s for the better.
For those failing to engage, sadly, they’re heading to fall by the wayside. Unless of course, the smart-thinkers snap up those dying entities, and with their wisdom and new ideas, bring them back from the dead to garner the returns they deserve.