The Top 6 Technologies Driving Real Estate Innovation
Technology is constantly reinventing the real estate industry. However slow but, real estate and technology are finally allies! Gone are the days of traditional property dealing, technology has taken over the world including our land, homes, office spaces and what not?
Property technology or PropTech is revamping the way we interact with our property, whether it is for construction purposes, property management, home services, buying, selling or renting it.
Now, when all industries are basking in the sunshine of advanced technology, why should the Real Estate sector remain in the shadows of out-dated methods?
In the periphery of proptech lies CREtech and REtech that stand for – commercial real estate technology and real estate technology respectively. As the names suggest, they entail the technologies and softwares implemented in real estate applications and tools.
The real estate industry is huge! CBRE covered two most important points while examining the 2020 US real estate industry, which are:
- Investment size in 2020 will be anywhere between $478 billion and $502 billion. It would make the year one of the most profitable ones on record.
- Amid slower economic growth and global uncertainty due to the pandemic, U.S. commercial real estate will remain a haven for investment in 2020.
Here’s a graph depicting the results of a survey conducted by National Association of Realtors on how people search for properties –
As the above data suggests, technology is helping real estate thrive even during the pandemic time. With that addressed, let us look into the different technologies which are playing a crucial part in real estate transformation.
1. Big data and data analysis
Sometimes when you are confused, what is the best possible way to reach a decision? Well, sound decisions can be made using data driven facts! This technology uses both historical and real-time information in order to provide insights on patterns, trends, pricing, associations, demographic data, and potential value in specific locations.
How does real estate and technology like big data affect each other? Let me wrap it up for you in simple words:
- It helps you price a property by real-time regional price analysis and forecasted future price fluctuations.
- The risk is very high in the real estate industry since price fluctuations are very common. Big data provides risk mitigation by predicting future prices.
- It tells you how to market and sell a property with better strategies based on data insights.
- It decreases the risk of choosing a wrong property.
- It makes the real estate industry’s workflows more efficient by advising profitable projects.
For example: The first stop for all the property buyers of the United States is generally Zillow and Trulia. The basic model of these companies is based on big data as they provide trend insights. They not only collect all the buying, selling and renting trends but also the demographic information, internet traffic, and results from consumer surveys.
This data is further analysed which results in providing the consumers insightful information regarding pricing and potential value of a particular property.
2. Virtual and augmented reality
Technology in the real estate industry has made online property search experience so effective, exciting and convenient. Properties are so accessible just at the touch of your finger tips! You can visit potential properties online via virtual tours. For property managers, this real estate technology trend is a blessing. There is no need to write detailed instructions when a virtual tour can demonstrate instructions along every step of the way. According to the National Association of Realtors, 87% people found photos very useful while 46% people found virtual tours extremely helpful.
The result of this innovation has led to an impressive growth in the AR/VR market domain
Augmented reality allows you to superimpose images and create a realistic architectural image to help customers understand the property even before the property is built. Using AR one can tweak the property’s designs and make it customizable.
For example: Roomy is a company that transforms your online property buying experience by virtually staging by adding furniture and accessories digitally.
What are the benefits of AR/VR for the real estate domain ? Let me churn them out for you:
- Saves time because there is no requirement to physically visit the property.
- It enhances the customer experience because the entire process is easy, personalized and provides a clearer product representation.
- Since there is no travel involved, it enhances a global reach.
- Real estate technology is providing a better ROI while eliminating the costs for staging a property.
3. Internet of things
IOT refers to the appliances and devices that are digitally connected to the cloud and are constantly sending and receiving information. The adoption of this technology trend in real estate is a game changer! It is because of IOT that we can imagine a world of ‘smart properties’ that seamlessly integrates the physical and virtual world. According to IOT analytics, The global IoT sector which was $150 billion worth in 2018 is poised to exceed $1.5 trillion by year 2025.
The market size has, in turn, resulted in an increase in the number of IoT devices active globally.
Proptech is using this technology to create an unparalleled level of comfort for the consumers. Home devices will contain smart sensors for predictive maintenance by alerting property managers or owners about potential problems. IOT in proptech can increase energy efficiency and help the property owner in saving money.
4. AI and Machine Learning
Today, if we look closely, we will find AI and Machine Learning being incorporated in almost every application we use. This technology trend is proving to be the turning point of the real estate industry. In fact, PWC found that businesses are using AI to eliminate repetitive tasks like scheduling (79%), paperwork (82%), and timesheets (78%).
Gone are the days when finding, viewing, purchasing and selling properties used to be a tedious process. With the help of the new technology trends in real estate we have overcome these issues. Artificial intelligence and machine learning techniques turn raw data into actionable information thus enhancing the customer experience and the entire process is now faster than what it used to be.
How? Let me sum it up for you!
- Real estate mobile applications that are powered by machine learning are better at predicting rent rate fluctuations. According to a research done by McKinsey, the real estate applications based on machine-learning models can predict changes in rent rate with 90% accuracy while the changes in other property metrics can predict with 60%. Hence, this technology knows the value of your money and provides a better choice for investments.
- Artificial intelligence and machine learning personalize the whole customer experience. It enables proptech to recommend properties and show tailored search results based on the preferences of a consumer such as, values, location, trends and personality traits. This keeps the customer engaged and shows that the application values them.
- Chatbots in real estate applications quickly and easily answer the questions of a prospective customer.
- With the help of such technologies, the process of looking for a property becomes more pleasant. It saves time as inappropriate choices are never shown to the potential customer.
The worldwide blockchain sector is expected to grow from $3.0 billion in 2020 to $39.7 billion by 2025, during 2020–2025.
All my tech-savvy friends out there must be thinking what does blockchain technology have to do with the real estate industry? Well, buying, selling or renting any property involves a lot of money and personal information! Earlier, transactions of high value assets such as real estate have never been executed through digital channels. Such transactions have often been conducted offline involving person-to-person engagements with various entities.
Blockchain, however, opened up ways to evolve this process. It enables assets to be tokenized and traded such as cryptocurrencies. Real Estate is witnessing a disruptive evolution with Blockchain acting as the driving force. Also, blockchain techniques can be used to verify encrypted transactions and ensure that no tampering can be done with the financial records.
This technology is one of the most important commercial real estate technology trends. We are yet to see the complete version of a fully evolved real estate industry! It will involve truly wireless workplaces which will obviously need a higher bandwidth.
Commercial buildings generally need numerous cameras and sensors around the property. With the help of 5G it will be easier to connect them and produce high definition images to transmit them instantly anywhere.
I think it is safe to say that real estate and technology trends are evolving everything we know about properties and their management.
The future of property is now!
The magnitude of technology trends in real estate is increasing by the day and this industry is rapidly growing. This is the right time for you if you are thinking of setting up a startup or are thinking about real estate mobile app development or upgradation. We will be happy to help you!
Thanks to our extensive technology background, Appinventiv can assist you with real estate software development. Feel free to reach out to us in case you are looking for a real estate mobile app development company.
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