Up until relatively recently, technology struggled to penetrate the real estate sector in any meaningful way; it is in direct contrast with nearly every other industry, which had experienced significant technological disruption. This stagnation can be attributed to a number of factors, such as the fragmentation of real estate ownership, the long life of real estate assets, the historical onus on tenants as opposed to owners to manage energy efficiency, illiquidity of the market and the high cost of acquiring and maintaining a real estate asset.
However, Technology is now massively disrupting the real estate sector and is targeting everything from space and energy efficiency to admin, transaction services and construction.
What is PropTech?
PropTech, an acronym formed from “property” and “technology”, embodies all of these technological advancements in the real estate sector, and is there to disrupt it for the better. It encompasses any or all technologies related to the real estate space. It can span software (property portals like Rightmove and Zoopla), hardware (for example, sensors), materials (for example, special bricks are being developed to act as batteries for solar panels) or manufacture (3D printing, offsite manufacturing).
How PropTech is disrupting Real Estate?
Moving further, we can identify a number of situations where PropTech is already disrupting the Real Estate industry.
1.Online residential market
A few years ago, Rightmove, Zoopla and others revolutionised the way we visit or sell a property. Back then, we had to lose a consequent amount of time printing documents and viewing residences. Whereas now, thanks to these platforms, we can register and view properties online.
Traditionally, estate agents manage paperwork of properties and tenants contracts.
In this sector, technology will help digitalise contracts, electronic payments and will be a medium of communication for buyers, sellers, landlord and tenants.
A leading company in this field is HappyCo Inc. It has developed a mobile app for property inspections. Now, property managers in the real estate industry can maintain digital records and manage inspections from their mobile.
Previously, commercial real estate companies used manual methods for collection of data to manage building layout and maintenance. Today, PropTech is changing the smart building industry by offering high-tech, affordable and environment-friendly solutions.
A great example is the Crystal building built by Siemens. It is the largest permanent exhibit site in the world dedicated to the study and creation of sustainable cities. It is itself one of the most sustainable buildings in the world. The annual heating bill is zero, as it emits 70% less carbon dioxide, and 100% of the water in its toilets is recycled, and it spends 46% less on energy than other buildings of its size.
These are only a few examples of how PropTech is slowly but surely disrupting the property sector for good. PropTech provides unique solutions to problems in the industry and is creating a space for new and existing game players to make a difference in the way we live, work and play.