Source: https://www.pcquest.com/proptech-emerging-attempt-transform-disrupt-aspects-real-estate-digitization/
Technological breakthroughs in every field and strata of life are characterizing the 21st century. The real estate industry is no exception. Though the conventional methods had hindered the tech transition of the real estate market in the past. But the pandemic has changed the perspective altogether. Statistics also prove that PropTech has started to make its mark in real estate.
The year 2021 witnessed a record $9.5 billion in PropTech financing from investors and venture capitalists. It is also expected to grow at a CAGR of 16.8% from 2022 to 2032. The growth prospects have led PropTech investors to see a lucrative potential for the industry with substantial returns on their investment (ROI).
In India, there is a slew of Proptech businesses helping to infuse technology into the sector’s everyday operations. As a result, people’s perceptions about real estate investments are changing, particularly in the commercial real estate (CRE) segment with the advent of smart documents, and tokenization.
A PropTech platform helps a developer with several operations like automated RentRoll, inventory management, and portfolio diversification. It helps avoid the complexities of asset management, bringing value to the industry and helping it evolve for both investors and buyers.
What is PropTech?
In simple words, PropTech is an abbreviation for “Property” and “Technology.” It plays a key role in the digital transformation needed to disrupt the traditional real estate market. The sector’s technological change is assisting the real estate industry in refining and smoothing processes for all stakeholders at various phases of the real estate market, making it more fluid, efficient, and accessible.
Is PropTech a Game-Changer?
Listing websites were the beginning of Proptech. It is now developing intelligent analytics solutions and digitizing many aspects of the real estate value chain.
It is gradually but steadily driving it towards a full digital transformation. Let’s have a look at some of the technologies and how they play a part:
● FinTech in real estate, cashflows forecasting, quicker collections, revenue management, faster project, and home loans, financial analysis, unit wise costing can be dynamic based on the material cost of the project.
● Facility management (IBMS) for efficient building automation etc.
● Home automation / Security systems / convenience etc
Using Big Data
Customer data is prevalent in the real estate industry. It can provide insights on how to design tailored solutions and improve customer service. The data about weather, traffic, and environmental data can help property owners plan their operations. Industry players can use big data to plan their advertising strategies and target the right audience at the right time.
Artificial Intelligence Revolution
Using AI and Machine Learning to streamline data administration, discover client preferences and make suggestions have demonstrated to be beneficial. AI also helps derive insights for ad campaigns. Chatbots are being used to provide 24/7 customer care and assistance. It reduces the need for human interactions with customers while maintaining efficiency.
Adaptation of Cloud-Based Tech
Real estate companies are supporting and advocating the development and purchase of green properties and systems to manage them as the need for these business models grows. Easy to implement for any scale of project and company size, it is a cost-effective model.
SaaS (Software as a Service) products based on the cloud offer customers enhanced access to relevant data. Project management, sales, and marketing, (CRM), financial transactions, and property management are all areas where PropTech can help. Blockchain technology is utilized to keep records and serves as an archive for future trades and smart contracts.
Incorporating Virtual Reality
Virtual Reality (VR) allows potential buyers, leaseholders, and investors to take a virtual tour of a property. It gives clients a 360-degree view of the property and makes the market more accessible to them. VR offers a cost-effective way to check out and select houses without compromising on customer experience. It also impacts the overall site visits, sale velocity, and final conversion.
Future of Proptech
To thrive, the construction industry requires cash and continuous funds. Many real estate developers, however, have difficulty obtaining loans for their construction businesses. Furthermore, the projects receive funds from the government during the construction period. It will be advantageous if the government begins funding before the real estate developers start the project once they receive RERA and relevant approvals
PropTech will have a growing impact on the real estate market in the forthcoming years, potentially disrupting one of the world’s oldest and largest sectors. Proptech offers project development and management solutions that will boost the sales potential.
Many new developments will happen in the PropTech space, leading to some restructuring, as the industry develops.
In addition, PropTech can also offer more sustainable solutions to make properties more appealing to ESG-focused investors and lenders and commercially feasible with cost-effective alternatives while also being environmentally benign. It includes, among other things, the creation of less expensive, green, and higher-quality construction materials, as well as efficient water, waste, air quality, and electricity management solution using IBMS and buildings. Going forward, the government claims to provide incentives to developers who participate in the Green Building Revolution. Nevertheless, the potential of PropTech to simplify user experiences while assuring safety will define its destiny. If PropTech companies can execute this, the real estate-technology alliance will be a long-lasting one that will continue to define in years to come.