Proptech is Transforming Real Estate

Among the many industries that weave together the fabric of the global economy, real estate has consistently ranked as one of the most impactful. Indeed, as the world’s population continues to grow, the need for housing has steadily strengthened, which has simultaneously prompted a surge in real estate jobs.

“PropTech” is a recent buzzword in commercial real estate. Similar to “FinTech” (‘finance + technology”), PropTech is a movement in the real estate market toward efficient systems rooted in exploring the digital landscape and tending to new consumption patterns. Here’s everything you need to know, from what it is to why developers, investors, and property management companies are interested in developing it.

What is PropTech?

Short for property technology, proptech is the intersection of the real estate industry with technology and software.

Proptech is an innovative approach to real estate in which technology optimizes the way people research, rent, buy, sell, and manage a property. The cross-industry technology benefits all parties involved – developers, investors, and property management companies – making it a recent buzzword in commercial real estate. Proptech real estate startups are all those that are attempting to make the real estate industry better , more efficient, and easier to navigate for all parties involved especially in highly dense cities. It’s no wonder that cities like New York , Hong Kong , London, Montreal , Dubai … in this up-and-coming industry with so many real estate concerns, such as the lack of affordability and of housing units. The rise of this industry considers the need for a technological and mental change required of the real estate sector to address the inconveniences of its consumers.

The PropTech industry

Real estate is the largest asset class in the US and a luxury asset in Dubai, and as a result, new trends are constantly emerging across the industry. From coworking to coliving, the real estate market innovates and shapes its endeavors to fill the demand. Since 2014, the PropTech sector has been noticeably experiencing strong growth. Reports said Venture Capital investments started at 186 million USD globally in 2011 and grew to 2.67 billion USD by 2016 and 12 billion USD in 201. Most recently, the Mid-Year 2018 Global Proptech Confidence Index from MetaProp, a New York-based venture capital firm focused on the real estate technology, found that “Ninety-six percent of investors plan to make the same or more PropTech investments over the next 12 months; this is up 76 percent from the year before.” Interestingly, a growing percentage of these investments is going towards companies in their growth stage.

Why develop PropTech?

Technological innovation has revolutionized several other industries. Look at Uber, Airbnb, Opendoor, Seamless…We could go on. The same benefits — streamlined efficiency, better consumer experience, simpler processes — can and should be apparent in the real estate industry. The traditional real estate suffers from several pain points:

Unaffordability (supply-constrained)

Manual, tedious leasing and payment processes

Lack of flexibility

Lack of community

With PropTech, companies that are trying to address these pain points and introduce an innovative edge into each step of the process and revitalize existing systems there will a deep relief.

In the following articles I’m going to list major PropTech companies that are helping the industry to grow.