The real estate industry has struggled in the past five years, with a nasty recession and housing bubble threatening the industry. But now the real estate workers are some of the most satisfied in the country and the new technologies are paving the way for their success – means for anyone looking to rent, buy, or sell real estate.
A few years ago, the biggest gap in real estate tech was searching for listings on the web. Now, the web listings search is ubiquitous, and consumers are able to access real estate listings more quickly and with more targeted searches than ever before.
The Proptech Wave
The first proptech wave, or proptech 1.0, crystallized in 2007 in the form of startups such as Singapore’s PropertyGuru, which provided the first online listing sites for residential property.
The second wave of proptech or proptech 2.0 arrived in 2013 as the initial players started to compete harder and developed capabilities such as data analytics and virtual reality to offer customers better and more specialized services.
Proptech 3.0 followed close behind. In 2014, pockets of startups began experimenting with emerging technology such as drones, virtual reality tools and blockchain—a cryptographically secure ledger that stores all transactions made in a system across many different computers.
How Technology Has Helped Real aEstate Industry
Technology is part of everybody’s lives these days. From the moment we wake up to the moment we sleep, our lives involve some dose of technology that can’t be ignored. Almost all commercial establishments have started embracing technological advances, and all of this is for the better. Real estate is one such industry where technology is making inroads. Just how much has real estate become future-ready with technological advances? Let’s find out.
- Consumer’s purchase decision made at the click of a button
- Building Information Modelling (BIM) will improve the quality of housing projects
- Virtual Reality (VR) has enhanced a potential home buyer’s experience
- Social media is the real estate sector’s new favourite home
- Smart home appliances are a rising trend
- Transparent transactions
Technology in the real estate industry can only get better with time. Many real estate giants have already taken it upon themselves to implement the trendiest technological advances into building their homes.
Proptech – The Future of Real Estate
An increasing number of real estate companies are realising the potential of technology to transform their business. Multiple verticals are emerging within PropTech, the real estate market per se (PropTech), smart cities and buildings, the home building industry (ConTech), the sharing economy and finance (FinTech). Real Estate industry provides a very close connection in ConTech and FinTech, because of its high production cost. Proptech is changing the real estate industry in three main ways:
- Making real estate planning more efficient
- Creating a more transparent marketplace
- Altering the way, we use our buildings
First, technology will dramatically change the way we approach real estate planning by making it easier to monitor large portfolios in real time. In fact, a number of countries have already begun to embrace that potential. In Singapore, the government has adopted the use of new city planning technology through its Smart Nation program. For instance, Singapore’s National Research Foundation launched Virtual Singapore, which will map the entire city in a virtual 3-D model.
Second, the impact of technology on the real estate marketplace will be tremendous. Until now, it has been characterized by asymmetric information, with sellers at an advantage over investors and buyers. Proptech is changing all of that.
Using big data, property watchers and investors are also able to get accurate predictions of real estate trends and market movements. In Singapore, one company has derived a formula to calculate the value of a property using a mix of comparative market analysis and algorithms, instead through manual valuation. Virtual reality is also enabling buyers to scan properties before they step through the door.
Similarly, blockchain technology, a game-changer in transactions, has the potential to make buying a house online via “smart contracts” a reality. This would effectively eliminate paper contracts and simplify the conveyancing process, saving thousands of dollars in the process.
Third, technology will dramatically alter the way we use our buildings. In many parts of Asia, homes are no longer just brick and mortar buildings. With smart technology and the Internet of Things, a home’s occupants are able to do everything from monitoring their babies to managing their appliances. For instance, Indian tech company Digital Gorkha helps secure homes and manage visitors through an app—which means owners no longer need to be around to receive visitors such as repair engineers or contractors.
We are really only seeing the start of the proptech 3.0 wave. Emerging technologies such as 3-D printing and cryptocurrencies are poised to make further inroads into real estate. Not too far in the future, entire buildings could be 3-D printed. Singapore’s Nanyang Technological University is studying how to use giant 3-D printers to print entire levels of a high-rise building, while China’s WinSun already claims to have printed a five-story building with decorative elements on the inside.
These are just some examples of how we are already seeing technology reshape the real estate industry. What is clear is that things are going to change—and change rapidly. Indeed, as Asia continues to develop, proptech will be a key driver in the physical transformation of cities across the region and will set the foundations for a new era in real estate.
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