The real estate industry today is almost unrecognisable when compared to around a decade ago, or even two years ago. This rapid evolution can largely be attributed to the technology that has become increasingly present within the sector. Like with many other industries, technology and digitalisation have altered the landscape of the property industry and will continue to do so in the coming years.
Despite the property industry having a reputation for the slow adoption of new technology, digitalisation has altered the landscape of the property industry and will continue to do so in the coming years.
Beginning of PropTech
The rise of PropTech can be directly linked to the rise of the internet in the 2000s. Information became available digitally and consequently more accessible. Early pioneers, Rightmove and Zoopla, used these developments to digitise property listings and services, acting as lead generators for landlords and estate agents.
The pre-sale stage in real estate, therefore, shifted to become primarily digital. Processes and transactions after this stage, however, were still completed manually.
Revolution and Innovation
PropTech has continued to evolve as a result of the wider use of the internet and mobile devices, which in turn has resulted in greater information transfer and sourcing. Startups have, and still are, driving innovation in the sector by using the new technology and trends to produce disruptive solutions that seek to challenge the buy-sell-let business model with the end-user in mind. Ease and efficiency for all parties has driven a lot of this development.
Consequently, more stages of the real estate process have become digitised. Administrative processes can now be automated and completed digitally. Additionally, PropTech’s crossover with FinTech has birthed numerous valuable features that can be integrated, including paying for rents and filing taxes digitally.
If we take a property manager’s role as an example, technology has drastically altered how portfolios are managed. Previously, balancing the books, complying with ever-changing tax legislation, offering affordable housing and making a profit all had to be done manually, which was both time-consuming and ineffective.
Managing properties has since become streamlined due to the emergence of centralised, end to end solutions. By using these digital solutions, property managers have everything they need in one place and can perform the majority of the necessary tasks online thanks to automation and integrations. This ultimately saves them a lot of time and money which they can reinvest in their growth.
A similar effect can be seen with other areas within the property industry, such as home services, IoT, and shared spaces, with perhaps the most well-known examples being WeWork and Airbnb.
What does the future hold?
Digital advancements show no signs of slowing down. As can be seen by the evolution of PropTech so far, change is influenced by wider technological developments and trends. The rise of blockchain and artificial intelligence, with a continued focus on improving customer experience, are the clearest examples of technology set to impact the future of the industry.
Incorporating blockchain with PropTech would reduce the need for intermediaries by implementing the use of smart contracts that allow the conduction of reliable transactions without third parties. Smart cities and buildings are predicted to be powered using big data, artificial intelligence and IoT with blockchain utilised for feedback.
However, according to Altus Group’s research, many CRE executives remain uncertain about a number of emerging technologies, due to the typically slow and conservative nature of the property industry in adopting digital transformation. This is reaffirmed by the fact that while the process of managing properties, for example, has advanced drastically, the basic dynamics behind buying a house have remained the same.
It’s hard to predict the long-term future of such an innovative movement, but it can be agreed that the continued automation of processes and emergence of new tools and technology will greatly benefit the property industry.
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