The property sector of the economy is going from analogue to digital. It’s no longer just location, location, location, but location, experience, analytics.
Proptech means the digitisation of real estate. Just like the digital world has transformed music and other industries, real estate has had to embrace a new culture as technology and consumer demands change. The digitisation of real estate, largely an analogue industry, represents huge opportunities for the entrepreneurial. Australia currently has over 260 companies playing in the proptech space, a 428% increase since 2013, according to the global proptech tracker Unissu. These companies are seeing value in the real estate market and consumer demands that are not being addressed. Some of Australia’s largest developers too have launched proptech accelerators, incubators or innovation labs in the race to be first. The growth of proptech is hard to deny.
- 56% of real estate decision-makers rate their business five out of ten or lower for digital and technological innovation maturity
- 48% believe customer experience is a major pain point where proptech can help
- 73% see digital and technological innovation as an opportunity
The foundation of proptech is how we extract value from real estate. Enhancing the customer experience comes from that. Residential was an early adopter of proptech as simple searching and shopping functions started to unleash online property to buyers and renters. Nowadays, new customer experiences are here, such as augmented reality (AR) “walk-throughs” for developers. AR helps bring to life off-the-plan developments, where the potential buyer can view the property, feeling assured in what they are about to purchase before it is built. Drones will also play a part, delivering quality assurance and safety to the construction sector.
The connected property consumer
With the rise of the Internet of Things, consumers expect more from their physical environs and dwelling spaces. This is where proptech innovation comes in. Via smart sensors, consumers are demanding personalised control of elements such as air conditioning, building access and lighting. They also expect to be rewarded for purchase and receive custom promotions. They want to book services, pay rent and source community news, all with a simple tap of their screens.
Data changes everything
From location location location, we are migrating to location, experience and analytics. ‘Active buildings’ are one example, where digital dashboards monitor a dwelling’s energy usage, to provide property managers and homeowners with greater insights into their consumption habits.
Investment in proptech is booming
Almost $20 billion was spent on proptech in 2019 in Australia, a 38% increase on 2018, according to researchers, Venture Scanner. It is believed that proptech will follow a similar trajectory to fintech over the next decade, spreading beyond real estate sales to construction, property management and leasing.For example, it is envisaged by some that renters will ultimately move away from long-term leases towards a hybrid of homes and hospitality, where they move quickly from one furnished and professionally managed rental home to another, guided by technology.
Where do you think the biggest opportunities lie for proptech?