How do digital technologies impact the real estate market through proptech?

The impact of digital technologies on the real estate market

In recent years, modern digital technologies have been rapidly developing and infiltrating various areas of life, which significantly impacts the real estate market. In this context, the concept ofproptechThis trend encompasses all technologies used in the real estate sector. It includes a variety of innovative solutions related to the development, management, and operation of real estate properties.

Key aspects of proptech

• Real estate transactions
• Investment analysis
• Design and construction
• Development
• Management and maintenance of real estate properties

Key areas of development for startups in the proptech sector

Startups operating in the proptech sector are developing in two key directions. The first offers tools that help improve the efficiency and quality of work for professionals in this field. The second focuses on automating processes, which could lead to the replacement of traditional approaches. The question that is actively discussed is what consequences the measures taken will bring and how they will change the established market.

Results of research and surveys

According to research, proptech has already become an important part of the real estate market. A survey conducted by KPMG in the summer of 2018 among leading representatives of this field showed that:

• 97%Participants believe that digital technologies will impact their business.
• 60%Respondents are confident that this influence will be significant.
• 78%Participants noted the increase in the influence of technology over the past year.

Attitude towards proptech

More than 70% of respondents view proptech positively, seeing it as a new opportunity to expand their business, while25%they see this as a risk. Despite the need for innovation and its positive impact,56%respondents still acknowledge that their organizations have not achieved "digital maturity." Only7%The respondents consider themselves leaders in this field.

Investment prospects

According to the survey data,30%Participants are already investing or planning to invest in proptech startups, while66%Respondents do not have a clear understanding of the practical application of these technologies and note a lack of strategies for their integration. This creates uncertainty among companies.

Changing perspectives on proptech

It's interesting that over the past year, participants' positions on proptech achievements have changed. In the KPMG survey from 2017...53%Respondents believed that their companies would use big data-based innovations within the next three years. This demonstrates how quickly the real estate market is changing and what new needs and technologies are shaping management and operational approaches.

Conclusion

In conclusion,proptechIt is perceived as a new vector of development in the real estate sector. Its influence is already being felt, although many players are not yet ready for full acceptance of the changes. It is important to closely monitor the development of this direction and how modern technologies will be integrated into everyday practice. The real estate market is on the brink of significant innovations, and proptech will undoubtedly play a key role in this process.

In today's world, overflowing with both structured and unstructured information, various specialized software solutions and analytical technologies for data processing are constantly evolving. Considering the main trends in the proptech sector that could impact the real estate market in the next five years, 44% of research participants highlighted the significance ofbig dataas a key factor.

ApplicationInternet of Things (IoT)that unites multiple devices into a single system for collecting and sharing information seemed important to 16% of respondents, while 15% noted the roleartificial intelligence.

Modern challenges in real estate

As of today, many real estate professionals do not have a clear understanding of the prospects for implementing digital technologies and corresponding strategies. According to a study conducted in 2018 by the ra2studio team and depositphotos, automation was recognized as the most influential factor for both the entire sector and individual companies, receiving support from 30% of respondents.

Following automation in the ranking isbig data27% of respondents noted this. Artificial intelligence and the Internet of Things shared the third position in terms of significance.

Long-term prospects of technologies

As for long-term expectations, 32% of respondents believe that technologyartificial intelligencewill have the greatest impact in the future. However, there is still a lack of clarity in the real estate market regarding the potential of innovative solutions, such as:

• blockchain
• autonomous vehicles
• 3D printing
• virtual and augmented reality technologies
• fifth generation networks

Support for investors in proptech

Studying investor support in the fieldproptechIt can be noted that 2017 was an important milestone for this industry. Since 2016, startups in this field have started to receive significantly more financial investments from venture funds.

If we take the USA as an example, the volume of investments in proptech increased from $44.7 million in 2012 to $6.5 billion by 2017.

Research conducted by re:tech confirms that in 2017, investment funds invested approximately $12.6 billion in 347 deals in the proptech sector, contributing to an impressive 92% growth in the total global investment volume in this area. In 2018, a stable trend of increasing investments continued.

New opportunities for investors

Large investors have begun to realize the new opportunities that modern technologies are opening up for the real estate market. For example, the companySoftBankactively invested in proptech, andAmazonI allocated funds for a startup focused on modular construction. Among these changes, it is also worth notingSequoia Capitalthat supports projects like Airbnb and WeWork.

These financial investments clearly indicate that the proptech market and investments in real estate-related technologies will continue to grow and attract interest in the future.

In recent years, there has been a significant increase in interest from investors in real estate employers who are actively implementing modern technologies, which noticeably surpasses the interest in new tech companies offering innovative solutions and products for this sector.

Changes in the real estate sector

What will fundamentally change in the real estate sector under the influence of new technologies?

Data analysis and artificial intelligence in real estate

With the development of data analysis and artificial intelligence technologies, property owners now have access to a full range of information about the demand for various properties, as well as forecasts and recommendations for their management. In this context, the startup Skyline AI stands out, offering investment consulting services. This platform automatically identifies the most attractive assets for investment and provides advice on when to carry out major repairs or review rental rates.

Virtual reality in the purchasing process

Virtual reality (VR) technologies play an important role in the real estate purchasing process, especially when it comes to properties located abroad, as they allow for remote previews. With VR platforms, one can thoroughly familiarize themselves with layouts and interior designs before any construction work begins, making necessary changes if needed.

The use of VR technologies provides the opportunity to conduct virtual tours of buildings, which can be viewed both in 2D on a computer screen and in 3D mode using specialized VR goggles. The application of panoramic photographs and 360-degree webcams helps clients monitor the condition of the property, including those that are still under construction.

Leading companies in the field of virtual reality

Among the leading companies in the field of virtual reality, it is worth mentioning firms like Eyespy360 from the UK and Matterport from the United States. In 2017, according to a survey conducted by the online broker Redfin in the US, 33% of respondents admitted that they chose to purchase a home without a physical visit, relying on the capabilities of digital technologies. In comparison, in 2016, only 19% of respondents made a similar choice.

Automation of property management

Nevertheless, the impact of technologies related to the Proptech sector is not limited to the processes of buying, selling, or renting real estate. Modern IT solutions significantly simplify property management. Special programs have been developed that allow for:

• Track the expiration dates of rental agreements;
• Manage financial reports;
• Keep track of assets and pay taxes;
• Place objects in rental listings;
• Control financial flows.

Currently, there is active development at SMS Assist, which has established a strong position in the property management sector.

Proptech services and cost reduction

Proptech services that rely on the Internet of Things and artificial intelligence contribute to the effective reduction of maintenance costs for properties. Such solutions provide the opportunity to:

• Control energy consumption;
• Quickly identify malfunctions and faults in the equipment;
• Improve the quality of management;
• Reduce expenses.

Thus, the implementation of modern technologies is transforming the real estate market, making it more efficient and understandable for all participants in this market.

Conclusion

In concluding my article on the impact of proptech on the real estate market, I cannot help but note how significant and promising the changes occurring in this traditionally conservative field appear. With each passing year, digital technologies are becoming increasingly relevant, and their integration into real estate processes no longer seems exotic. Surveys conducted among professionals clearly show the optimism with which they perceive new technological approaches, although there are still many concerns and questions that require solutions.

Prospects of proptech

As we have seen, only a small percentage of market participants feel confident about the digitalization of their companies. Nevertheless, this is precisely what creates a platform for dynamic growth and opportunities —proptech startupsThey are interesting not only because of their ability to optimize existing processes but also due to the potential to create new business models. Witnessing such transitions, I cannot help but notice the significance of big data and artificial intelligence, which, in my opinion, will play a key role in the coming years.

The role of investors

The influence of investors should not be underestimated either. They see huge potential in proptech and are ready to support projects that can revolutionize traditional approaches to real estate. Given the increasing volumes of investment, we can confidently say that the market is on the brink of significant changes.

Prospects and conclusion

In conclusion, the real estate market is largely defined by its inertia, but proptech, with its innovations and startups, is opening new horizons. I believe we are only at the beginning of this journey, and amazing transformations await us that will make the real estate market more efficient, accessible, and attractive for all participants. The key is not to miss this historic moment and to actively participate in the process, asinnovations— it's not just the future, it's something that has already become a part of our reality.