In the past year, businesses have had to adapt their existing technology infrastructure and IT strategies to remote working, and sometimes to pivot their operations entirely. The property industry has been no exception, and PropTech has come to the fore. However, it is one of those ‘shop talk’ phrases that has been a niche area until recently.
PropTech is a broad term which refers to the use of technology in the property industry, or what is referred to in the US as ‘real estate’. It includes software, such as online property portals Rightmove and Zoopla, and hardware, such as tools for smart home technology.
PropTech also encompasses physical building materials such as bricks which can be adapted to act as batteries for solar panels. In manufacturing, it can refer to 3D printing or off-site construction. In 2021, there is a growing demand for off-site manufacturing technology to build high-quality, low carbon modular housing.
When did PropTech Begin?
According to James Dearly and Prof. Andrew Baum, the first wave of consumer targeted property technology began with the dotcom boom around the year 2000. This allowed traditional high street estate agents to operate online, hence the massive success of Rightmove in the UK.
Around the year 2008, online portals expanded to enable greater flexibility and ease in the rentals market, notably with the success of Airbnb. This allowed people to rent rooms at the fraction of the cost of a hotel or traditional holiday let, and hosts could make money on their spare spaces, if their children had left home for example.
PropTech in 2021
The coronavirus pandemic drove the application of technologies such as artificial intelligence (AI). Virtual market appraisals to help estate agents value properties during the first lockdown of March 2020 started to come to the fore. 3D viewings, previously reserved by most agents for the international property market, also became more common.
Chris Hobden of Chestertons explains: “We can now combine up-to-date market information, tools from our research department and our large database of historical property prices to give a very accurate idea of the property value or rental rate, as well as determining the best marketing start date.”
He continues: “Similarly, virtual 3D tours of properties to showcase what is on offer ultimately allow potential investors to view a property in detail without leaving their home or office.”
It is not thought that the business of buying and selling property will become entirely digitised in the future, but will complement existing practice. Hobden sees PropTech as a chance to level up estate agent’s digital offerings, but predicts that customers will still want to deal with a real person at some point along the transaction process.
Going forward, the expanding availability of high-quality data to estate agents will allow them to streamline their processes, offering clients more relevant and targeted choices. From a commercial perspective, the data can be analysed by investors to help them make better decisions about the risks and potential profits in the property market.
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