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Real estate management and startups jostle for market share and face serious difficulties striving to scale up and hold their position in comparison to competitors. In this article, you will discover the current position of the real estate industry on the market, the latest proptech trends, and success stories with the implementation of these trends that gave life to many startups.
Proptech market 2022: general overview
The real estate sector is booming, being one of the most stable and promising industries. One of the things that have helped the growth is the rise in activities in the real estate industry, which had a ripple effect across Prop Tech,” Koda Wang, co-founder of Block Renovation.
In 2022 we are going to continue seeing the virtualization and digitalization of the real estate industry influenced by residential real estate technology. The tense situation in the world, taking into account all the events taking place, will continue to be a driver of changes.
The need for sustainability and management of increasing data volumes, structuring the messy data, and compensation of transparency lack are the key issues for real estate tech startups now. Because of this inefficiency, the $9 Trillion commercial real estate asset class is primed for disruption.
Proptech companies are actively looking for ways to stay afloat and keep up with the latest real estate industry trends to provide customers with unique experiences, attract investors, and win considerable market share.
Residential real estate technology redefines the industry
Proptech companies remained a significant part of all sectors of economic life and are considered one of the most promising ones. Indeed the global need for homes is growing steadily and this has also fueled the surge in real estate employment.
As Peter Williams, CEO of Deloitte Digital, said “Real estate agents will not be replaced by technology but by agents with technology”. The development and growth of the industry are enabled by the implementation of various technologies.
Investors’ appetite grows around the proptech and leaders who follow the latest tech trends for sure will be spotted by their hungry eyes. It provides the power to impress and makes you different, thus more attractive for customers and investors.
Technology trends have a great influence on how properties are constructed, managed, sold, and leased. It allows companies, especially startups to innovate products and services and change global consumption patterns.
According to Deloitte report, implementation of the latest proptech trends will bring the following changes:
- CRE owners and tenants will be better able to identify leasing opportunities and interact directly
with each other; - Tenants will be able to make better-informed decisions at a lower cost;
- Owners who create a positive tenant experience, which also satisfies the tenant’s talent requirements, are likely to have a competitive edge.
Thus, business owners will have to make a choice between proactive responses to the evolving business landscape or being disrupted by the new entrants and losing their competitive edge.
Why proptech matters for homeowners
Flexibility, agility, and innovative thinking are the key factors driving the sustainability of tech companies’ businesses in a modern competitive environment.
The real estate sector business environment poses complicated tasks for all industry players. The demand for housing management is increasing. Growing landlord demand for efficient property management technology solutions, ticketing management systems, and other demands are fueling the sum of investments in proptech and real estate industry.
Most fundraisers continue to keep their focus on the residential market. Zack Schwarzman, a general partner at the proptech-focused VC firm MetaProp claimed that “the amount of capital that’s been returned to LPs in the venture ecosystem over the last two years is extraordinary”. Thus venture tech companies are eager to reinvest in proptech technology and continue growing their capitals.
Proptech trends for real estate startups
According to a survey conducted by Forbes of 701 multifamily personnel, of the 117 corporate proptech companies respondents, 85% believe they would be able to improve profits and growth with better insights into how the property is performing.
The proptech branch is actively developing and now undergoing digital transformation. With the help of the adoption of the latest proptech trends, tenants, landlords, and investors to experience the power of technology and make smarter decisions getting a unique user experience.
Based on the in-depth research, where there were analyzed more than 2 000 startups companies, it is possible to distinguish the following proptech companies’ tech trends.
Artificial intelligence
Modern devices that are widely used in proptech industry nowadays, generate huge amounts of data, that may concern location, information about the tenant etc. based on the analysis of this data, you get information about the current trends, asses the risks and get the better understanding of the buyers needs.
Manual processing of such data would be too time-consuming. With the help of AI technology, proptech companies can analyze huge volumes of real-time data, extracting valuable insights. Analysis of the historical data helps to discover the needs and trends and get realistic evaluations.
Artificial intelligence has completely changed the way potential customers purchase and rent, providing them with an impressive user experience and smart predictive features offering the most suitable properties.
AI chatbots enable all participants of the selling, buying, or any other process to stay connected to the clients 24/7 and process their requests instantly with no delays. It improves team collaboration, allows to expand the number of clients, and even allows to maintain building equipment smarter.
Virtual property tours and AR technologies
The use of VR and AR in real estate projects enables to organize quick tours and enables tenants and investors to quickly find their best match.
Virtual tours allow tenants and home buyers to take quick tours exploring many properties in a short time from any spot of the world. It also enables proptech company managers to create the designs of the future properties allowing the customers to see the whole picture and get an impressive buyer experience.
VR allows real estate agencies to analyze and understand clients’ needs and expectations better and thus generate more sales. The ability to reflect how the property would look like taking into account the client’s future needs allows to take smarter buyers’ decisions based on personal preferences.
IoT project
In the modern digital world, instant access to data is a top priority. IoT devices and sensors allow real estate tech companies to communicate with the customers, tenants – to control smart devices and smart houses, and managers – to monitor different aspects of the property.
Moreover, the use of IoT technologies in the real estate sector allows to increase the properties’ security, reduce maintenance costs, make the resource consumption smarter, save more resources and drive the sustainability.
Automation and building management systems
BMS systems are used as the type of real estate technology to control various building systems and include energy management, air conditioning, heating (HVAC), and space management and allows efficient distribution of energy.
It allows property owners to measure and adjust the temperature according to with the preferences of the current tenant automatically.
Foot traffic in commercial buildings helps to underfur the working spaces and reduces congestion following the norms of social distancing.
It also contributes to smart energy consumption by enabling efficient distribution of energy across the building based on the analysis of occupancy data.
Big data
Big data analytics helps to identify properties and enables potential customers to get a unique experience, and investors – to identify the best properties for investments. The software enables to improve of overall business performance.
Analytics of the data collected from different resources allows specialists to build 3D models and BIM used for maintenance, construction, better market analysis, understanding of clients’ specifications, etc.
Blockchain
The major number of transactions in the real estate industry are conducted involving third parties and presupposing big volumes of documentation. It makes the selling process complex and time-consuming both for property owners and renters or home buyers.
The rising prices of the real estate market make it impossible to invest in properties for many people. With the help of blockchain technology, you can instantly sign the contract when all the conditions are met with no need to involve third parties. It also guarantees security and transparency in the buying process.
Moreover, tokenization services allow making even small investments, and loans in the form of tokens making it more affordable and accessible. The use of blockchain technology in real estate tech startups enables reducing paperwork and
Property aggregation platforms
An online presence allows real estate agencies to engage more clients and optimize their business processes. Property aggregations platform is a special digital platform designed to list properties for clients and visualize listings for customers extracting them from various platforms. They offer solutions like buying and selling properties, crowd funding, co-investment, etc.
Such platforms provide easier users access to funding
Drones
With the help of drones, it became possible to examine the property from different prospectives and access it in terms of utility and aesthetics. It guarantees more informed buying and investment decisions.
Another advantage – drones allow to monitor property and facilitate better maintenance allowing to address issues more effectively.
Data security
The latest proptech innovations, which are actively implemented in the real estate industry generate huge amounts of data, including sensitive information like personal details or transaction info. It is a great target for cyber criminals.
With the help of technology, it is possible to encrypt IoT data, monitor the cyber attacks on buildings, and monitor and report the irregular traffic on any devices thus enhancing security and increasing visibility.
Technology is a booster and driver of changes when it comes to any niche and the real estate branch is not an exception. AI tools, virtual reality, IoT building systems, smart homes and many other will continue to transform and develop the sector.
Proptech technology is creating the space of new opportunities for tenants, landlords, and investors providing new ways to gain a competitive advantage and get ahead.
Best Proptech successful startups examples
Zumper
- Founded in 2012
- Place: San Mateo
- Funding: 150M dollars in investment
Zumper aims to simplify the housing rental procedure by providing consumers with quick access to verified properties across the US. They also allow users to book available apartment rentals or condo rentals directly from their website and have the ability to apply for the offer without competition and receive approval feedback within 24 hours. Zumper also provides virtual property tours as well as alerts about the latest listings.
Engraint
- Founded in 2009
- Place: Greenwood Village CO
- Funding: $1 Million
This is a software solution that helps users discover and rent homes. It has a product line that includes TouchTour, which allows leasing and sales center staff members to engage customers and empower on-site teams to hire faster and offer better customer support. Engrain collaborates with several developers on multifamily senior housing, student housing, single-family, and commercial housing.
Cohesion
- Founded in 2018
- Funding: $6M
What the company is doing: Cohesion is a software platform to disrupt buildings’ operations and the way users interact and use them. Building owners can increase asset value by integrating building software with workflows, systems, and people to maximize asset value. Cohesion also allows owners and management to quickly react to new building usage.
Orchard
Orchard aims to make selling or buying a house a fair and simple transaction for all customers. The company makes a contingency-free offer to the buyer and reserves properties so they do not pay the debt until their current home sells. Orchard then handles home buying, transfers a buyers new home under their name and allows borrowers to take advantage of the Orchard loan options or choose a lender to finalize the mortgage.
Homebot
- Founded in 2015 by Ernie Graham and Iris McMahon
- Funds: $5M – 4,5M
Homebot has a focus on attracting repeat customers and building relationships. The company’s portal combines the best data available from rent and investor data with the best market information. Homebots mission aims at creating a wealth-building platform for homeowners by engaging meaningfully with their mortgage brokers/lenders.
Ribbons
- Funding : $555M
Ribbon creates transparent alternatives to buying and selling houses. The company provides homes and businesses with a guaranteed closing time of 14 days, free estimates and a total commission for buyers if a buyer sells before moving. The ribbons also allows lending companies to convert pre-approved loans into financing by providing tools for their personal accounts and clients’ dashboard.
To sum up
The real estate industry is booming. According to the recent statistics, for instance in Dubai, UAE the residential real estate market is poised to grow at a CAGR of 12.36% by 2026. It creates tremendous opportunity but also a severely competitive environment as a result of the opportunity.
Digitalization of business and adoption of the latest proptech trends proves to have a positive impact on business overall and allows gaining a competitive advantage on the market. IoT, Artificial Intelligence, BIM, Blockchain, Big data, and many more have already enabled business owners to attract investors and impress their customers with high-quality services. It also highlights the necessity to adopt and follow new tech trends if you want to stay afloat and gain considerable market share.