The real estate sector accounts for nearly 60 percent of the world’s mainstream assets, out of which 75 percent belongs to the residential sector. Yet, this huge market has been one of the later ones to adopt innovative technologies. The real estate industry has been a rather silent participant of technological transformation for almost four decades, but it has only become the hotspot for investment and entrepreneurship development over the past few years. VCs are looking to invest hundreds of millions into PropTech, which has become its own sector in the start-up ecosystem. PropTech is also called Real Estate Tech.
What is PropTech?
PropTech can be defined as an amalgamation of real estate and technology. It constitutes a range of businesses that are as sundry and extensive as the real estate industry itself. Anywhere that technology is innovating how property is occupied, managed and transacted, from leasing and property management to co-working to investing can be captured under the name of PropTech.
Here are a few trends to be watching:
Big Data. Use of big data in real estate has observed an exponential growth in the past few years. It has enabled companies and individuals to take informed decisions with respect to investing, managing and operating based on data. It is being used by the real estate companies to extract and provide information on various aspects such as history of the property, ownership cost, current value, details of the neighborhood, estimate of mortgage payment and estimated forecast of future valuation of the property to count a few.
Blockchain. Blockchain use can potentially revolutionize rental property payments by removing middlemen and reducing transaction cost. It can facilitate cost effectiveness and better decision-making in leasing processes with the use of a shared database, where an entire vertical of stakeholders including owners, tenants and service providers can interact with ownership information, or transaction history in an open and secure way. Real estate assets can be tokenized and made transferable with the use of blockchain.
Building Information Modelling (BIM). Building Information Modeling is a smart 3D model-based process that enables architects, engineers, and construction professionals to plan, design, construct, and manage buildings and infrastructures efficiently and the information can be used throughout the life cycle of the property.
Construction Technology (ConTech). Proceeding from an economically necessary view of the entire property life cycle, ConTech has the potential to automatically become the focus of interest. The global construction industry is booming and there is a need for technological advancement with the current explosion in construction cost.
Geolocations. Geolocation technology transforms simple maps into full sets of critical data about real estate and properties. It can not only pinpoint where buyers are in the traditional sales cycle by utilizing predictive analytic technologies but can also pinpoint their physical location. It enables real estate developers to make far more accurate valuations based on economic strategies. Further, geolocation technology plays a very crucial role in real estate marketing and has the capacity to change how properties are marketed and traded.