Prop-tech’s Transformational Impact on Real Estate

Technology is a democratiser. Ever since it made inroads into business and industries, it’s been transforming the way tasks are performed, easing up processes and simplifying life. Technology is transforming real estate and development phenomenally. Cities, countries, and spaces are changing, both at a tangible physical level and in the way the ecosystem interacts with its different parts. Data is driving much of this change, and many countries across the world are working to define a strategic roadmap for the property industry.

The term Proptech was initially used to define a set of technological tools and solutions developed by companies to ease out processes in the real estate industry. Today it is being increasingly used in the planning, construction, marketing, and buying phase of real estate having a far-reaching impact across the sector. The Corona pandemic has only served to accelerate the impact of prop-tech, making digital transformation more pronounced, introducing digitization in day-to-day operations and using data to define a more tailored approach for running businesses.

Proptech first began to gain traction in 2010. 2014 saw a number of new businesses joining this segment, leveraging technology to design and develop solutions. In 2019, the market value of prop-tech increased to $10.15 billion. Digitisation of key business processes and automation has hastened its adoption and increased property sales. While prop-tech hasn’t gained the traction of its distant cousin fintech, it is quickly catching up. Data sharing and the ease of interaction between government and private entities is giving it a much-needed boost. To understand the far-reaching implications of prop-tech, let us consider some of the industry-wide changes currently happening or are soon-to-happen in the months and years ahead;

Application in the Private Sector — The private sector unfettered by regulations has been the first mover in prop-tech. Unlike the slow adoption by government bodies, technology is being adopted widely in private organisations for simple tasks such as data filing to complex analysis and accounting. Improving labour efficiencies and reducing overheads is being done through digital platforms like QuickBooks and Google Drive. 3D printed pre-fabricated materials and customised concrete materials are already a part of the latest construction framework. The marketing of properties is being done through virtual simulation tours, and drone shots of plots and properties. Technology is even being used for automated monitoring of water levels, drainage systems, and treatment plants. Even property maintenance is being carried out through digital dashboards. Most repetitive and redundant processes are quickly moving to a plug ’n’ play technology setup, accessible via mobile or a centralized system.

Applications in Planning and Maintenance — Governments are often slow in catching up to changing trends, and this is perhaps what can hinder digital progress in property. But even here, innovation is slowly but surely making a change. Technology platforms such as Citybldr are now beginning to streamline and clarify title ownership and deeds, while Coda Compliance in the UK specifically streamline the process of building permits for architectural approvals, thereby removing legal fees and consequent implications. There are also solutions being explored in ‘super forecasting’, using past traditional data to accurately predict future land development outcomes. Governments are the last frontier in proptech but even they seem to be catching up owning to increased transparency, driven by consumer-led buying trends.

Applications in Land Development — Governments have hitherto been the sole owners of land information. In order to simplify processes and prevent misuse of loopholes, it is becoming increasingly important for information to be made public and available to all. Case in point being Miami’s zoning map that uses geo-location to cover everything about an areas zone map; from aerial photos, to flood risks, and regulations for specific zones. Anyone can access the information regarding area density, plots, and more. This when combined with existing information comes together to give everyone data that can be accessed and used — as much as or as less as they want.

An enduring endeavor of all such property-related technology is the purpose of making information transparent and tractable. This will happen when all the innovative companies and ideas congregate into creating a digital space that anyone can access democratically at anytime.

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Co-authoring this piece with Charmaine Kenita, on my learnings in Real Estate, Technology, Future challenges, and mapping the way forward.

Thought leader, Consultant, Observer , Realtor, Pilot , Banker, Educationist, Reader & Entrepreneur.