How Is Technology Changing Real Estate?
Here you will learn how technology affects the real estate market and what challenges this industry faces towards digitization. Read the article and find out what the real estate technology trends are and what technical solutions are in demand now.
The digital revolution is knocking at the door of the global real estate market. Technologies help businesses to create complete analytics of the market and segments, estimate the construction of facilities, process information, engage consumers more, and provide them with the requested data.
This is just the tip of the iceberg of how digital solutions are changing the real estate business. Below we are considering the market trends, challenges of adoption, and useful technologies in the real estate industrythat make a difference.
Real Estate Innovation: Transparent Market without Lags and Pitfalls
Support for smart home systems, online monitoring of sales and purchase agreements, registration via real estate legal services — all these options are demanded by the market. New vectors of development require an updated technological approach. Proptech is a radical new approach to digital acquisition, operation and management of real estate innovation. Growth of the global proptech market over the past few years has shown high performance, and the use of various instruments has become not just a trend, but a direct necessity.
According to the monthly calculations of the Center for Real Estate Technology and Innovation, the amount of venture capital invested in proptech in 2020 was $23.750 billion. The indicator was formed by the financial statements of 425 investing companies. This is 24.7 % lower than in the previous year. Investors decided to fund IT companies and startups — whose solutions help to increase the speed of processing daily operations, reduce the risk of human factor and error, indemnify the closure of transactions, and mitigate financial risks.
The blockchain technology in the sphere of proptech helps to keep and fill registries and property rights correctly, providing simplicity, transparency and security of transactions. For example, the crypto technology is already being used in Sweden — they have created a digital cadastral register.
What prevents us from scaling the real estate business through digitalization? According to the KPMG Global PropTech Survey, blockers could be divided into 4 groups: unclear vision of ROI mark, absence of right staff, lack of appropriate in-house talent and priorities.
Are all startups, proptech trends and innovations risky and financially unpredictable? When we add the uncertainties of the geopolitical future and heightened consumer control, proptech companies become indecisive players. Transformation processes can only be successfully completed if management is focused on the cause of the transformation and has a clear plan for change for all stakeholders.
Real Estate Technology Trends and Solutions
Let’s briefly remember the past, when the pandemic was just beginning. Investors at that time avoided risky trades. Despite the instability factor, the volume of financing (not venture investing) in the proptech sector was only increasing.
For example, in 2019 we saw a sharp increase in funding — by $3,424,000. Successful projects and companies scaled their business and announced an IPO.
Real estate is considered to be one of the investment asset classes that provide an acceptable return at low interest rates. The year 2020 set goals for ensuring security in the real estate sector, leveling risks associated with attracting people to work with big data and automation. Governments around the world have introduced mitigation measures, such as deferred tax payments and insolvency to avoid the worst effects of the pandemic. These reforms require quick adaptation. Only digitalization tools will be able to optimize and upgrade reality to these processes. Let’s consider which proptech solutions are moving the market forward.
Buying and Selling Websites
Services for the selection of different types of commercial real estate, like offices, warehouses, retail outlets are popular now. Over the past couple of years, it is no longer enough just to place ads on the site, since the overestimated price expectations of real estate owners increase the exposure period of the object on the market. The abundance of sites and resources with inaccurate information complicates the choice of real estate for a person who doesn’t cooperate with realtors and agencies.
Advanced software tools allow to develop a site with virtual walks and options such as the ability to open an escrow account remotely. These options range from the primary options (like filtration by living space, district, infrastructure requirements and maintenance conditions) to marketing tools such as 3D panoramas and presentations of virtual tours.
Real Estate CRM Software
If we’re dealing with manual labor errors, complex handovers, large flows of data and comprehensive lead processing, we will need automation tools.
The CRM system will help in automation. To solve the individual tasks of a company, it’s required to develop software that will have specific functions — which will match the company needs. The implementation of the system provides control over the work of the agency, all contractors and employees. It allows you to track profitable transactions and identify unscrupulous co-workers.
Another important advantage of the program is a detailed story of work. The system stores complete information about past transactions, including the specifics of customer requirements and contacts, agency reporting in visualizing forms, telephony integration.
The main requirements to modern CRM systems are:
- assistance in management;
- track interactions;
- functions of reminder.
Mobile Apps
Launching a mobile app will give you a competitive advantage for potential buyers. Basic functions of apps include registering a user, creating an account with the client’s personal info, participating in loyalty programs, searching and booking of objects, arranging of meetings and payments.
In addition, the user of the application could have access to the real estate database, and presentations of objects. Innovative applications allow users to control smart home systems remotely, reducing the cost of housing and communal services.
RPA Systems
Robotic process automatization (RPA) is the direction of business automation which accelerates the execution of repetitive tasks by manual data entry, processing and storage.
RPA systems help to reduce direct and indirect costs associated with the maintenance of staff and customer support: salaries, sick leaves, taxes, bonuses, workplace organizations, insurance, trainings, marketing expenses and more.
One example of proptech projects is site filtration with an internal selection of real estate. This operation used to be performed by realtors who searched for houses or apartments on bulletin boards. The robot, in fact, has freed the company’s employees from the routine of searching, posting and sending info to customers. Now RPA with integrated artificial intelligence is looking for the objects the client needs and offers selections with the necessary filtering.
Availability of RPA in business indicates a high potential for technology penetration in the medium term:
- human factor is reduced — a correctly configured robot performs its tasks without errors that will periodically occur in humans;
- up to 80 % reduction in direct costs — correct automatization improves the quality of lead processing, so the conversion increases;
- fast implementation — since RPA doesn’t change the IT landscape, implementation is finished in time. Tangible results can be achieved within the first 2 weeks of piloting.
More information about technologies, solutions and optimizing business processes you can find in our blog. Follow the link, if you are eager to know more about real estate digitization.
