The digital transformation of the real estate sector has proven to be extremely successful. Before the pandemic, digital advancement in the real estate industry was slow. However, the onset of the pandemic has led to an accelerated digital transformation in the sector, giving rise to prop-tech start-ups and emerging as real game changers in the industry. The benefits of using automated real estate technologies are considerable. Consumers and real estate professionals will be at a distinct disadvantage if they choose not to use these valuable tools.
Technology has permeated every industry, it is ubiquitous, no business can thrive without technology today. The real estate sector is also changing with the times and advanced technologies. PropTech is a rather amorphous term that is formed from the word property and technology. It encompasses the various solutions involved in the growth of commercial real estate software. According to recent statistics – PropTech fundraising hits an all-time high in 2021 with $9.5 billion from investors and venture capitalists as of mid-November. This figure breaks the record of $9 billion in fundraising in 2019. Technology is increasingly becoming an attractive asset for owners, potential real estate investors and tenants looking for an efficient and secure opportunity in the commercial real estate segment (CRE). This presents a lucrative opportunity for PropTech investors to witness high returns on investment.
PropTech start-ups booming in the real estate sector
PropTech is booming and it’s here to disrupt the real estate space by changing the way we look at real estate investments. There are a large number of PropTech start-ups in India that are playing a crucial role in integrating technology into the day-to-day operations of the sector. As a result, these start-ups are changing the outlook on real estate investment, particularly in the CRE segment. For example, there are technology-backed proptech platforms that host multiple activities such as property listing, portfolio management and diversification for the benefit of investors or property buyers without having to worry about property management. their assets. These platforms add value and drive industry growth.
As the industry identifies the potential of the technology, the government is also proposing various initiatives to drive the adoption of PropTech in the sector. Flagship government campaigns such as Digital India, Smart Cities concept, etc. are accelerating the holistic use of technology in real estate.
Additionally, PropTech startups are integrating technology in ways that make the real estate sector more resilient. When the COVID-19 pandemic hit the real estate industry hard in 2020, propTech platforms helped it navigate the trajectory of a rapid recovery. For example, prop-tech platforms have helped buyers research and discover properties from the comfort of their homes and enabled virtual tours. Additionally, newly evolved prop-tech platforms have harnessed the potential of drones, new technologies – Artificial Intelligence, Big Data and Cloud to revolutionize the industry.
The main PropTech trends we will see shortly
Fractional ownership has evolved considerably over the years and has become an emerging trend in CRE. The concept is gaining popularity in India as it reduces the financial burden for a single investor or new era investors in CRE. Simply put, the concept of fractional ownership works by dividing the cost of a high-end commercial property into multiple fractions and provides the accessibility and affordability for people to participate in a real estate investment opportunity at a fraction of the cost. .
Traditionally, only a wealthy group of investors used to invest in Grade A commercial real estate. and capital gains at the time of exit and sell their fractions, whenever necessary. This trend is set to revolutionize the way people invest in CRE in 2022.
AI and cloud-based technologies optimize the asset identification and selection process. The integration of these technologies is gradually moving beyond conventional ways of purchasing and managing an asset. The best example of this is the use of predictive analytics to determine the true value of a property and assess the occurrence of relevant events such as neighborhood income distribution, changes in market trends, etc.
Apart from this, the increased adoption of cloud technologies has created a boon for real estate investors as they can access information about a property from anywhere. According to the facts, 80% of leading PropTech companies are adopting some form of cloud technology in three different models: Software as a Service (SaaS), Platform as a Service (PaaS), and Infrastructure as a Service. service (IaaS). In addition to bringing the real estate sector online, the adoption of cloud technology in the real estate sector reduces reliance on manual labor, thereby saving a significant amount of energy.
High-tech devices in the real estate industry
The innovative use of technology in real estate has incorporated drones in the presentation and sale of homes. Here are some of the benefits that drones offer real estate agents and those who buy and sell homes:
- Air Photo
- A better view of large properties
- Additional Interest in Ads
Virtual tours of properties have been already creating ripples in the real estate sector. With movement restrictions imposed to contain the spread of COVID-19, the technology has seen an increase in its adoption by PropTech and major real estate companies. Potential buyers can visit the property virtually and decide without leaving their home. Virtual property tours offer a more realistic reflection of the interior of the property, which can help to understand whether or not the property is what the buyer imagined.
blockchain
Blockchain technology can be used to verify encrypted transactions and ensure that no tampering affects financial records. It will prove useful in fractional real estate investing and allow owners to sell portions of their stake in a given property.
The technology will also allow for the safe storage of important documents such as title deeds. As with other market sectors, the surface has only been scratched when it comes to the potential for blockchain to be used for other cases in the real estate industry.
What is the next step ?
PropTech is one of the young industries that is expected to grow dramatically in the coming years. As the world’s population is expected to double by 2050, the demand for real estate will also increase dramatically. Traditionally, the real estate industry in India was unorganized. However, the emergence of prop-tech start-ups has disrupted the industry, making it more accessible, affordable and transparent for potential buyers or investors. Technological advancements adopted by PropTech players are expected to create a digitally driven sector and sustain its place in the longer term. We will see companies inclined to make decisions based on the data that Proptech provides them. Businesses will be able to evolve at a much faster rate and the tradition currently associated with the real estate industry will either start to die out or be replaced by innovative ideas supported by technology.
Warning
The opinions expressed above are those of the author.
END OF ARTICLE
.