The real estate industry is rapidly evolving, and with the rise of PropTech, there is a significant shift happening in how properties are managed, from acquisition to occupancy and beyond. With advanced technologies such as artificial intelligence, cloud computing, and big data analytics, property and real estate management is becoming more data-driven and efficient.
This article will explore the impact of PropTech on key stakeholders in the real estate industry, including property owners, investors, and real estate managers, and how these new technologies are leading to better decision-making and improved outcomes. Whether you’re a property owner looking to maximize your investment or a real estate manager seeking to streamline operations, PropTech is changing the game and offering exciting new opportunities.
Unpacking the property tech revolution
As increasing sums of money are deployed into this growing space, PropTech investors are becoming ever more astute in their allocations, looking for the startups that will make a real difference to the industry and therefore, ultimately, their portfolios. Real estate accounts for over 13 per cent of global GDP, however, productivity and technological growth has been relatively slow compared to other industries with companies initially struggling to mobilise its technology strategy quickly enough to manage change.
Over recent years, a rapid rise in accelerators, incubators or innovation labs has seen Australia’s PropTech community grow to more than 270 companies—a 428 per cent increase since 2013, according to the global PropTech tracker Unissu. According to a Deloitte study, in the first six months of 2019, $20 billion was poured into real-estate tech startups by venture capitalists and private equity globally, which surpassed the $19 billion record for all of 2017.
With these trends in mind, technology is set to continue to rapidly shape any given niche within the real estate sector. The combination of new market entrants, new technologies and changing demographics have created disruptive models within real estate. This presents new opportunities for organisations which rapidly embrace innovation and PropTech.
So which innovations are set to benefit PropTech the most?
1. Big data and deep tech
It is estimated that the world will generate about 90 zettabytes of data over 2020—more than all data produced since the advent of computers.
Big data, which describes the large volume of both structured and unstructured data floating round the digital space, is being used in several ways to automate the onerous property industry processes. The umbrella term ‘big data’ typically encompasses everything from blockchain, to machine learning, deep learning, the internet of things, social media and artificial intelligence. With big data comes enhanced predictive analytics, or the capacity to use sophisticated computer algorithms that can predict market fluctuations.
However, access to data is probably still the single biggest struggle many technology providers in the PropTech field face, and data sharing principles are sorely needed especially in areas where the private and public realm intersect.
2. AI and machine learning
While these huge pools of real estate data are already being used by artificial intelligence programs to improve the customer experience through personalisation and predictive home evaluation over time, AI can further change the real estate game.
The ongoing adoption of AI and automation technologies has transformed the way people work and has rapidly distributed many industries, particularly real estate, finance and banking.
AI can help accurately predict which locations will be the most beneficial for developers to invest in, optimising market-level profitability and revenue and revenue as well as helping to identify optimised spatial layouts of new developments. AI can also predict customer needs, target users and itemise results, navigate and drive CRM databases.
3. Cloud computing
Cloud computing has become the invisible backbone supporting much of our daily lives. Cloud computing is the delivery of computing services—including servers, storage, databases, networking, software, analytics and intelligence—over the Internet. The rising popularity of the cloud has gone hand-in-hand with that of 4G, and the soon-to-be-rolled-out 5G, broadband technology and of smartphones.
In order to drive better business relationships and collaborations, cloud technology has enabled a historically rigid industry to become mobile and flexible. Thanks to cloud computing, stakeholders are able to access extensive databases on the go while through a streamlined user experience.
Machines have been around for a long time, but they are rapidly becoming more sophisticated and able to undertake increasingly complex tasks.
Robotics and machine-led manufacturing have improved construction development for real estate in several ways:
- Increased efficiency: Robotics and machines can work faster and more efficiently than humans, which can help to reduce labor costs and accelerate construction timelines.
- Improved safety: Robotics and machines can perform dangerous tasks, such as working at heights or in hazardous environments, which can help to reduce the risk of accidents and injuries on construction sites.
- Enhanced precision: Robotics and machines can perform tasks with a high degree of precision, which can help to improve the quality of construction and reduce the need for rework.
- Greater flexibility: Robotics and machines can be programmed to perform a wide range of tasks, which allows for greater flexibility in construction development and the ability to adapt to changing project requirements.
- Automation: robotics and machines can automate repetitive and mundane tasks, which can help to improve productivity, reduce errors and increase the overall output.
- BIM integration: Robotics and machines can be integrated with BIM technology, which allows for the creation of detailed and accurate 3D models of the building, aiding in the design and planning process.
Overall, the use of robotics and machine-led manufacturing in construction development has the potential to improve efficiency, reduce costs, enhance safety, and improve the overall quality of real estate development projects.
5. Virtual and augmented reality
Virtual reality, or subversive computer-generated environments, is rapidly changing the way users interact with the digital world. The boundaries between virtual and physical reality are quickly fading through these new digital experiences, with technology providers able to showcase designs and property with stimulated “walk throughs”.
Augmented reality, which has been traditionally linked to the gaming and entertainment industry, has also become particularly beneficial for off-plan developments. Unlike virtual reality, which requires an advanced headset, most AR applications work on mobile devices such as smartphones and tablets, with smart glasses and other hands-free devices increasingly becoming more prevalent.
In conclusion, PropTech has revolutionized the real estate industry by making it more efficient, transparent, and accessible. The integration of technology in the real estate sector has not only increased the speed of transactions but also improved the overall experience for stakeholders, including property buyers, sellers, agents, and investors. PropTech has also opened up new avenues for investment, such as crowdfunding and fractional ownership, thereby democratizing the industry and making it accessible to a wider audience.
Moreover, PropTech has had a positive impact on the environment by promoting sustainable practices in construction, reducing energy consumption and carbon emissions, and improving waste management. It has also enabled better decision-making by providing stakeholders with real-time data, analytics, and insights on market trends, property values, and investment opportunities. This has not only improved the accuracy of decision-making but also reduced the risk of errors and fraud.
PropTech has increasingly transformed the real estate industry in recent years, bringing it into the digital age and making it more efficient, transparent, and sustainable. As the technology continues to evolve, stakeholders can expect to see even more innovations and opportunities in the future, providing better outcomes for all involved in the industry. It is therefore important for all stakeholders to embrace this technology and take advantage of the opportunities it offers.
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