Technologies in Real Estate: PropTech Trends the Changing Industry
The introduction of cutting-edge technologies in real estate promises to change the way business is conducted in this age-old industry forever. The real estate market is a major component of the world’s economy, with a global value of well over $200 trillion. It is a business that touches most of the world’s population including everyone who owns a home, invests in a piece of land or rents an apartment or office building.
In some respects, the adoption of technology in real estate has lagged behind its use in other business sectors. This was partially due to a reluctance to change methods that had worked well in the past. Another factor that slowed down the widespread use of real estate technology was attempts by major players in the industry to develop proprietary tools.
But now these issues are fading and the market has seen an increase in real estate technology in recent years.
Moreover, the industry players are starting to understand the benefits of investing and using the technologies in real estate. As you can see, under Statista survey, the real estate companies find the next technologies the most promising ones for their industry and shared their opinions on its impact:
It is poised to see even more growth in the ways that new real estate technology will affect everyone involved in the industry.
What is Proptech?
Proptech is a rather amorphous term that is formed from the words property and technology. It encompasses the various solutions that are involved in the growth of commercial real estate technology.
Proptech is also known as CREtech for commercial real estate technology or REtech for real estate technology. It usually refers to the software employed in real estate technology tools and applications.
In some cases, the results of proptech innovation results in standalone products. Real Estate apps and platforms that make use of third-party mobile solutions are also commonly developed by real estate technology companies.
Proptech promises to cause disruption in the real estate industry with its array of new offerings. This makes real estate an attractive industry in the eyes of venture capitalists.
Global investment in real estate technology startups and more established players reached $14 billion by the middle of 2019. This amount of capital shatters the previous levels of investment such as the $12.7 billion seen in 2017.
The industry shows no signs of slowing down with new generations of consumers and realtors opting for smart solutions that facilitate faster rentals and more convenient living arrangements.
There is no single product or solution that dominates proptech. You may see references to real estate technology in the news in many forms. As for example, the majority of real estate agencies are planning to invest in the fields as:
So here we are going to take a look at some of the many residential and commercial real estate technology trends that are currently in use or being developed. We will see how technology is changing real estate and the way people go about buying, renting, selling, and owning a home, apartment, or commercial workspace.
Real Estate Technology Trends That Disrupt The Industry
Here are some of the trends and innovating uses of technology in the real estate industry. Certain solutions are directed at agents and investors while others are meant to improve the lives of renters and owners. The successful adoption of a specific technology in the real estate industry will be determined by its ability to provide value for its users.
Automated Rental and Purchasing Property Platforms
Nowadays the ways, how the clients find the new property they bought, are changing to the Internet more than meeting with real estate agents.
As a result, real estate agents are starting to change their approaches to property selling.
Gone are the days of scouring web listings for apartments and trying to schedule an appointment to check them out. Today every real estate website should be high performed and handy. Thought to have that might seem not enough.
Besides, one of the most efficient technologies used in the industry is mobile, e.g. the development of different types of real estate apps, the most popular ones are rental and purchasing mobile platforms.
There are now numerous applications that enable apartment hunters to search for their next place at their convenience. You can see advertisements for these consumer-based apps such as Zillow and Trulia on mainstream media as they reach out to their intended market.
These apps offer several advantages to potential renters over the traditional means of locating an apartment or house. Databases are frequently updated which provides more timely information on new properties put on the market and those that are no longer available.
Images of the apartment can help searches exclude those that do not suit the customer’s tastes without the wasted time of visiting in person. Some of the more advanced applications provide the means of exchanging personal details with landlords and paying rent remotely.
Consumers interested in purchasing, selling or renting a property can also make use of apps tailored to their needs. They can help you locate the house you want and put you in touch with a real estate agent to help facilitate the deal.
Other apps also can be used to compare the value of homes in your area, allowing you to make more informed decisions regarding your selling price.
The benefits of using automated property technologies are overwhelming. Consumers and real estate professionals will be at a distinct disadvantage if they choose not to use these valuable tools when looking to find or sell a home.
3D Virtual House and Apartment Tours
Closely associated with search applications are solutions that enable prospective buyers to take a virtual tour of properties while making their selection. This eliminates the time and expense of visiting multiple properties, many of which can be removed from the buyer’s list of potential purchases through virtual viewing.
Of course, most buyers will want to physically tour the property before making a final decision, but the time and money savings for the customer and real estate agent in determining the best fit can quickly add up. Moreover, today VR technologies allow having almost realistic virtual tours to houses where you can easily examine the property state, interior details, and furniture. As below you can see it in the video:
So, instead of visiting twenty properties to find the right one, most of them can be excluded after a virtual tour and everyone can move on with their lives that much more quickly.
Big data, Artificial Intelligence, and Machine Learning in Real Estate
Big data, artificial intelligence, and machine learning are important technologies that are fundamental to the drive for more personalization in applications that provide data delivery to individuals.
Databases and data warehouses are used to store the immense quantities of information that is gathered concerning consumer preferences.
Artificial intelligence and machine learning techniques power the applications that transform this raw data into actionable information that can personalize the user experience.
Real estate technology will use this data to improve the way homes are sold and apartments rented throughout the market.
For example, according to McKinsey research, the real estate applications based on machine-learning models can predict changes in rent rate with 90% accuracy while the changes in other property metrics can predict with 60%. That can pretty well help clients to understand what property is a better choice for their investment as in the case of commercial property as well as non-commercial.
Besides, using machine learning algorithms, these apps can understand a user’s preferences in the type or size of the dwellings they are interested in and tailor search results in more productive ways. The more times an individual uses a particular application, the more it will seem to know what they want without explicit instructions.
The example of such kind of smart real estate assistant is LJ Hooker Avnu application designed by our developers for clients to deliver smarter and more efficient selling, leasing and property management experience.
With help of such apps, the process of looking for an apartment or home becomes more pleasant and saves time as inappropriate choices are never shown to the prospective customer. It can eliminate much of the frustration that accompanies the process of searching for a new dwelling.
Blockchain Technology in Real Estate
Tech-savvy readers may not immediately make the connection between blockchain technology and real estate. While many individuals are familiar with how the blockchain is used in the world of cryptocurrency, it has wide applications in other areas of commerce, including the real estate industry.
Blockchain technology can be used to verify encrypted transactions and ensure that no tampering impacts financial records. It will prove useful in fractional property investment and allow landlords to sell portions of their stake in a given holding.
Here is a brief recap by National Association of Realtors on main blockchain use cases in real estate
The technology will also enable important documents such as property titles to be stored securely. As with other sectors of the market, the surface has only been scratched as far as the potential in employing the blockchain for other cases in the real estate industry.
Fractional Property Investment
Fractional ownership refers to percentage ownership in an asset. It is a common investment strategy when purchasing expensive items such as aircraft or vacation homes. Using the aforementioned blockchain technology, fractional property investment is flourishing for a variety of reasons.
The high price of homes put them out of reach to many would-be buyers. Fractional property investment allows these individuals or groups to begin to build a deposit on a future full purchase.
Communal investors can all share in rental income from a shared property, opening up an additional income stream. Employing a fractional ownership approach will enable more diversified investment and allow people to unlock the value in their homes.
Improving the Tenant Experience with Technologies
Smart homes, apartments, and devices are changing the way we live in many ways. Smart devices, in general, are powered by the Internet of Things (IoT).
The IoT refers to the practice of embedding sensors and computing technology into various items with which we interact every day. What began with the introduction of smartphones has expanded to a world populated by smart appliances and home devices as well as fully equipped smart homes and apartments. The ultimate goal of this technology is to provide individuals with a more convenient and pleasurable life. It another example of how technology in real estate can change our lives.
For example, one of the technologies provided by IoT is Smart Lockbox that we used in Rently app development. What does it allow?
Within the app and its self-showing technology, you chose the desired house for having tours.
Then the app is managed by an agent who can provide you with a special key by your request. This key allows you to enter the desired house available for sales with your smartphone and have a house tour whenever you want.
Let’s investigate in what way IoT technologies are changing our homes and transform them into a smart home. There are three main characteristics of a smart apartment.
- Smart amenities include devices such as smart light and locks as well as integrated services like home cleaning and package delivery.
- Connectivity is designed into a smart apartment when it is built to enable devices, building systems, residents, and management to communicate. Items such as WiFi, smart sensors, and intelligent access controls are some of the benefits afforded by enhanced connectivity.
- Community management by providing services that save residents time, money and minor difficulties is the final component of a smart apartment. Built-in event calendars, resident assistance, and on-demand services are some of the features that help property managers and renters build a more vibrant community.
While new construction is prime territory for implementing smart apartments, older structures can be retro-fitted to provide the same level of connectivity.
Besides, smart home there are other IoT use cases in real estate as for infrastructure, energy monitoring, predictive maintenance, and notifications sending with beacons.
Technology for Real Estate Agents
Some technological innovations are equally important to consumers and real estate professionals. Today the real estate agents begin to use specific technology for realtors that is designed to help them provide services to their clients. Here are some popular real estate agent technology tools that are in use today.
- Multiple Listing Services (MLS)
This is a marketing database set up by a group of real estate brokers that allows them to view and obtain accurate information regarding each other’s properties. It can also be used to facilitate commission sharing among the associated realtors.
- In-app communication
Curb Call is an app similar to Uber that allows individuals to attempt to contact real estate agents regarding a property that interests them. The agent that responds first gets the job. Once communication is established, showings can be scheduled and information can be obtained by a prospective customer.
- Social media
Social media is widely used in many industries. Realtors queried by the National Association of Realtors (NAR) indicate that 70% use social media as one of the tools of their trade. They use it to promote listings and build relationships with their customer base.
High-Tech Devices in the Real Estate Industry
Innovative use of technology in real estate has been incorporating drones into the process of showcasing and selling homes. Here are some of the advantages that drones offer real estate agents and those buying and selling homes.
- Inexpensive aerial photography
Before drones, it was cost-prohibitive to produce quality, aerial images of a property that restricted its use to high-end homes. Drone photography allows agents to use it for any property which offers new viewing options for prospective buyers. They can also obtain a look at the surrounding properties and landscape. Here below you can see how it looks like in the real-life.
- A better view of large properties
The photography possible from a drone platform can be used to show a complete image of large structures. Seeing the full extent of the property and its natural surroundings can be influential in making it more attractive to buyers.
- Additional interest in listings
Advertising drone images and videos drive consumer interest in the property and can be instrumental in attracting the desired audience required to make a sale.
The Future of PropTech
As you can see, there is a multitude of opportunities for technology to be used in the real estate industry. It is a growing field that offers the chance for startup companies to compete for a slice of the market share. So in case you got any questions about real estate application development for your agency needs, feel free to reach out to us. We can share our estimation and advice on your project thanks to having an extensive tech background and expertise in the industry.
Anyway, as the world’s citizens become more comfortable with technology, the possibilities will continue to expand. Since everyone interacts with the real estate industry to some degree, it will impact the lives of countless individuals in the years to come.