Property technology or PropTech, for short, refers to applying IT and platform economics to the real estate industry. Platform economics, in this sense, gives users a glimpse into the social and economic activities shaping the sector through a digital interface. PropTech is also known as “real estate technology.”
In the simplest terms, PropTech involves using IT to revolutionize or enable the real estate industry’s digital transformation.
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What Is PropTech For?
PropTech was borne out of the real estate sector’s need to:
- Reduce paperwork
- Make transactions quicker and more efficient, as it is often tied to fintech
- Enable property management through digital dashboards
- Incorporate smart home technology into properties for sale, rent, or lease
- Allow digital research and analytics
- Technologically enhance listing services and brokerages
- Give users easy access through mobile apps
- Ease residential and commercial lending
- Use three-dimensional (3D) modeling for online portals
- Automate processes
- Crowdfund for real estate projects
- Manage shared spaces
- Organize, analyze, and extract critical data from lengthy rental documents
PropTech came to life with the birth of the dot-com boom. Real estate companies then wanted to move away from print media and real estate offices to digital media. Companies like Zillow in the U.S. and Rightmove in the U.K. were the first movers in this space.
By 2008, companies like Airbnb began making it possible for property owners to rent out their houses or other real estates for parts of the year.
Today, PropTech is being driven by advanced technologies like artificial intelligence (AI) and big data. These new technologies allow companies to engage with customers in more meaningful ways, aided by research and intensive data gathering and analysis.
Funding for PropTech companies has been gaining momentum in the past few years. Between 2010 and 2020, investors injected as much as US$9.2 billion into the industry.
New Professions Borne Out of the Rise of PropTech
PropTech is changing the real estate industry as we know it. While startups like Guarantor, SMS Assist, TenX, and many others may be threatening companies in the rental property management, real estate sales, and real estate development, PropTech’s rise is also giving way to new jobs. PropTech companies are looking for drone pilots, virtual home staging specialists, and data aggregators. As time goes on, more can crop up.
What Can Real Estate Professionals Do to Address the PropTech Boom?
Much like how the banking, financial services, and insurance (BFSI) industry has been dealing with fintech, real estate companies need to keep pace with PropTech if they are to survive. Here are some things they can do:
- Stay in touch with the industry: Read about all kinds of developments (especially technological ones) in the sector regularly. The more you know, the better you can anticipate changes and meet your customers’ needs.
- Be tech-savvy: Invest in technological tools and systems so you won’t get left behind.
- Try out new things: Experiment with existing clients. Try out new tactics to find out which work and which don’t.
- Think outside the box: Spend time each week to think of ways to improve processes to ensure customer satisfaction.
- Provide added value: Identify what you do best. Ask clients what they like most about you and strive to provide that all the time so they would never leave you. Identify more ways to keep them happy by collecting feedback.
- Keep up with the times: Keep in mind that different generations have varying consumption patterns. Be mindful of changing buying habits. Also, remember that today’s youth are your future clients.
No matter how technology changes our lives, companies that stay on their toes and keep up with developments like PropTech will not go out of business. Instead of seeing technology as an enemy, try thinking of it as a means to an end.