Know Everything About PropTech and How It Changed the Real Estate Industry

Today we are going to talk about the real estate industry but not just any aspect of the real estate industry but the technological aspect of this industry.

As people not associated with this industry, you might probably interact with the real estate industry with the help of agents or brokers only a few times in your life.

In spite of that, this blog is going to be interesting for everyone out there.

However, if you belong to this industry and if you are interested in technology then this blog is going to be even more fascinating for you.

We are going to talk about how technology has become prevalent in the real estate industry in the form of PropTech and how it has the potential to transform this huge industry that is expected to reach a monumental $637.80 trillion globally by 2024.

Let us begin this blog by understanding the market overview of the real estate industry.

Here’s What the Real Estate Market Looks Like Presently

If you look at the global real estate industry then one of the things that will be very apparent is slow growth.

This is partly because the real estate industry is recovering from the pandemic and partly because of other external factors such as conflicts around the world.

If we take account of the entire real estate industry of the world then there are so many factors that influence it.

However, if we zoom in our focus on one of the largest real estate markets in the world, the US real estate market, then we can have a very good idea about the global situation as well.

The US Real Estate Market Is Rising, But Slowly

If you look at the graph mentioned below then you are going to find that the situation of the real estate industry might seem like it is at a sharp fall after the pandemic.

But if you focus on the data between 11/1/23 and 3/1/24 then you can see a rising trend which is showing signs of a recovery for the real estate industry

source

While the fall in sales can be attributed to rising interest rates, there is also recovery in the real estate sector and one of the biggest factors is the reduction of unemployment.

However, the biggest challenge in the US real estate industry is definitely going to be the sharp rise in interest rates which can be seen below.

source

There is hope because we can see the recovery of the real estate industry simply because more people are entering employment and more people have the capital to spend on house payments.

This is a very healthy sign of the recovery of this industry and it is partly also because of technology and how it has made buying property convenient for the average hard-working American.

source

One of the biggest factors that is helping the real estate industry globally is definitely technology but there are still a lot of problems faced by the real estate industry.

Problems Plaguing the Real Estate Industry

Old Fashioned Outlook

One of the biggest problems faced by the real estate industry is an old-fashioned outlook. This means this industry is so large and so used to a certain way of doing things that it is not very welcoming to change.

The real estate industry can only break its records and grow at a faster rate when it adopts technology and we are talking about everything from Artificial Intelligence (AI) to Machine Learning (ML) as well as big data and definitely blockchain.

The new generation ofreal estate brokers and dealers as well as agents are definitely adopting change in the form of PropTech and that is slowly but surely helping the industry reach the level of efficiency as any other industry that has welcomed technology.

source

When you have an industry where it is difficult for people to buy property as they do not have access to technology that makes property buying easy, you have a rise in interest rates and you have a saturation in the market.

That is why technology is definitely going to improve the current situation faced by the real estate industry.

Regulatory Hurdles

One of the issues faced by the global real estate market is definitely going to be regulatory hurdles and local laws as well as compliance challenges that make it difficult to buy or sell property.

Apart from that, there are also laws in place that do not allow the easy sharing of analytics and data that can actually help real estate agents improve their regulatory and compliance situation.

This is an area where governments have to step up and come up with systems for easy access to data that can help people involved in the real estate industry get access to data and regulations easily.

This also can be achieved with the help of technology.

While firms and companies are more than willing to use technology for their real estate dealings and operations, governments should also embrace tech like how the private players have.

source

Economic Uncertainty

And finally, we come to economic uncertainty. It is very difficult to predict the situation of the world and the situation of the global economy even with the best kind of tools and data.

For example, who would have guessed the pandemic and its impact on all markets and economies and all sectors of the industry?

source?(Global real Gross Domestic Product (GDP) that shows the pandemic slowdown)

However, it did happen and it slowed down everything like the entire global real estate industry because people simply did not have any capital to invest in property.

That is why one of the biggest challenges still facing the real estate industry is definitely going to be economic uncertainty and this is something that is never going to go away.

For example, if you look at the recent wars taking place around the world then we will understand the impact even things like that can have on the real estate industry.

What Exactly Is PropTech? Can It Transform the Real Estate Industry?

The meaning of PropTechis hidden in the name because it is an abbreviation of property and technology combined together and that is exactly what it means.

When you combine the latest and greatest of technology with real estate you get PropTech.

We are talking about everything from AI and Machine Learning (ML) as well as Virtual Reality (VR), blockchain, IoT etc in order to improve the entire set of operations required during any kind of real estate function.

PropTech is about utilising these cutting-edge technologies during the buying and selling of a property as well as during market research of a property as well as during the management of a property.

PropTech can be used while managing rent properties and it can be utilised while managing properties you are willing to sell.

It is basically when you utilise technology for different aspects of real estate.

PropTech is basically an amalgamation of different bits and pieces of real estate technology that helps in smartly managing the different aspects of real estate.

PropTech is made up of different elements of technology.

Different Elements of PropTech

Rent Tech (Property Sharing/Renting Technology)

The first element of PropTech which is actually very popular is definitely going to be technology that allows for the sharing and joint use of different kinds of property.

It also includes technology that allows for the renting of property and this is something that is utilised by global players such as AirBnB etc.

Smart Real Estate (IoT/Smart Home)

If you just take out your phone and open the Amazon app and search for smart home devices then everything you see whether it is devices such as smart doorbells or smart thermostats are all part of the smart home ecosystem.

This technology is often utilised by real estate agents and real estate owners to improve the value of any kind of property.

These technologies also help in the management of different elements of properties.

FinTech (Financial Technology)

Real estate is one of the best kinds of investments in the world that has amazing returns and whenever we talk about investments, Financial Technology (FinTech) conveniently comes into the conversation.

That is why a major part of PropTech is actually FinTech whereby technologies that are utilised for buying and selling stocks and shares as well as commodities are also utilised and adapted for the real estate industry.

Fintech is also used to improve the ease of transactions and other financial processes in the real estate industry. This is a major part of PropTech because the real estate industry deals with a lot of transactions and technology is instrumental in that area.

ConTech(Construction Technology)

ConTech is a very important part of PropTech and this deserves an entire blog of its own because of the level of advancements in the use of modern materials as well as the level of advancements in sustainable construction technologies being used in real estate.

Construction plays an important part in the real estate industry and that is why PropTech is bringing technology advancements that are not only helping in construction management but also improving the entire operational approach of construction.

This Is What the PropTech Market Looks Like – An Overview

The global PropTech market is estimated to be around $26 billion in 2022. It is expected to reach almost $120 billion by 2032. Yes, that’s the level of growth expected in this industry.

Things are looking amazing for the residential as well as the commercial PropTech industry, especially when it comes to the PropTech industry in the US.

source

The global PropTech is dominated by the US market with the North American continent holding a revenue share of 55.8% of the entire PropTech market.

source

However, trends show that the fastest growing market is the Asian market, specifically the South Asian and the Asia-Pacific market because of their fast adoption of technology in all sectors of industry.

In fact, the Asia-Pacific region is estimated to register a CAGR of 17.3% from 2022 to 2030, which is huge and a big win for the PropTech industry. The largest players are estimated to be China and India as they both have spent nearly a combined total of $20 billion dollars in 2022 in PropTech

source

The countries that are expected to do excellently when it comes to utilising PropTech and heavily investing in it are going to be the United States of America, China, India, Mexico, UK, Germany, France, Japan and Brazil.

The global market is looking extremely encouraging for the real estate industry when it comes to the inclusion of technology in all its aspects.

Real estate agents as well as housing associations are going to play a major role in the global PropTech market share with property investors also playing an important role.

source

These Are the Trending Technologies Being Implemented in PropTech

Augmented Reality (AR) and Virtual Reality (VR)

There are multiple areas where we can see rapid advancements in real estate technology. One such area is that of Augmented Reality (AR) and Virtual Reality (VR).

These technologies are actively being used by real estate agents in order to showcase their properties virtually.

This is one of the key elements of PropTech that developed during the pandemic when it was nearly impossible the physically showcase properties to clients.

This led property dealers to utilise Augmented Reality (AR) in order to showcase properties to the clients all the while having video conferences with them.

Some real estate agents even utilize Virtual Reality (VR) in order to showcase properties with the help of VR glasses, although we must also state that this adoption is still in its infantile stages.

Blockchain Technology

The real estate industry deals with a lot of capital and a lot of investments and sometimes it can be quite difficult to accept funds due to currency restrictions and currency rate volatilities when it comes to global real estate investments.

PropTech has enabled real estate brokers to provide blockchain payment gateway options to global glands and this has virtually removed the problems with traditional currency transactions.

While this is still in its early stages and while blockchain has still not garnered a good level of trust in the real estate industry, we expect blockchain to become common in the real estate industry.

Blockchain can also be an excellent element of cyber security for the real estate industry.

Big Data

Real estate is one of the best forms of investment and big data is all about the analysis of real-time and historical data when it comes to real estate assets.

Real estate firms are utilising big data in order to analyse market conditions as well as predict market behaviour which is enabling real estate investors to invest more accurately.

Big data is also being used by real estate agents in order to showcase property value to clients so that the clients can be briefed about the best time to get a property.

Artificial Intelligence (AI) amp; Machine Learning (ML)

Artificial Intelligence (AI) and Machine Learning (ML) are being used everywhere in the PropTech industry right from utilising AI-powered chatbot assistants to assist clients when it comes to a real estate website to basically the automation of a lot of contractual paperwork.

AI and ML are being used by real estate investors to track real estate pricing and it is being used by real estate owners to automate the process of renting out properties without any human involvement.

We are also saying the utilisation of Artificial Intelligence (AI) in IoT applications thereby enabling the automation of property management quite easily.

We hope this blog has helped to understand the significance of PropTech and how it has the power to revolutionize the entire world of real estate.

The introduction of AI into real estate solutions can be transformative and can bring change that will influence other industries as well.

If you are looking for experienced software developers as well as AI specialists with extensive experience in PropTech then we are here for you.

We are Think To Share IT Solutions and we are the leaders when it comes to PropTech in India. We would love to help you automate your real estate operations and provide you with custom enterprise software solutions and much more. We will help you digitize your entire real estate portfolio and operations with the help of AI, ML, cloud solutions and much more.

We welcome you to visit our website and check out everything we do.