How PropTech Is Redefining Residential Real Estate
From construction costs to low trust among stakeholders, Indian residential real estate is brimming with challenges. Adding to these woes was the absence of customised technology facilitating all the stages of the value chain, including pre-sales, sales, financing, construction, settlement, and management.
PropTech (property technology) bridges that gap. It is here to speed up operations to save cost and streamline procedures. The new-age tech platforms are enhancing transparency, boosting security, and automating repetitive processes.
With a PropTech investment of more than $551 million in India itself, real estate disruption is rising. The new landscape of residential real estate is spurred by a dynamic digital ecosystem fostering new consumption models.
Why Has Real Estate Been A Laggard In Digital Adoption?
Industries like financial services, health services, food delivery, payments, hospitality, travel, etc., were among the first to adopt digitalization. However, real estate embraced technology at a relatively later stage even though it is the world’s largest industry (valued at over $280 trillion).
From the conventional ways of publicizing sales and rentals through newspapers, posters, and flyers, the industry gradually evolved to websites and digital advertisements.
Property managers run interactive portals to attract buyers and sellers and use management software to handle the daily operations. Similarly, tenants and owners resort to digital platforms for multiple tasks like payment and locating vacancies.
With mobile phones, easy access to cheap data, and the internet, the real estate world has become a level playing field. It has given rise to a highly competitive market and eased up the buying and selling process, reducing gaps in the real estate sector.
What Is PropTech And Evolution Of PropTech
PropTech refers to the implementation of the latest technologies in the real estate industry. It runs similar to FinTech, EdTech, etc., representing the alignment of tech integrations with the respective industries.
In a nutshell, it helps individuals buy, sell, manage, and rent out properties in an easy manner, especially in densely populated cities.
Apart from bridging the gap between buyers and sellers, technology has taken the central stage in streamlining residential property and rental management. On average, about 4.8 PropTech investments were made per investor worldwide in 2019 itself.
PropTech is primarily driven by artificial intelligence (AI), machine learning (ML), cloud-based technologies, and blockchain. It has progressed through multiple stages over the years with emerging apps and platforms, including:
- Property Listings – MagicBricks, Housing, 99Acres
- Access Control – MyGate
- Property Management, Rental, and Buy & Sell – NoBroker, Squareyards, Nestaway, YourOwnRoom
According to the recent KPMG findings, over 58% of individuals and firms have adopted digital innovations in real estate. This prevails despite multiple challenges like a lack of skilled tech specialists in the industry.
Market Places for Discovery and Finding Homes
Software developers introduced digital platforms to bridge the gap between buyers and sellers, tenants and landlords, and other real estate stakeholders. Portals like MagicBricks, CommonFloor, 99Acres, and Housing.com made way for a common marketplace for interested clients and property owners to communicate and close deals.
Challenges: Spreading awareness about these platforms among the general public and unavailability of accurate data.
Property Management Marketplaces for Managing Homes
PropTech innovation has given birth to leading home management service platforms like Urban Clap and House Joy. These portals offer point services like maintenance and repair to the end consumer. However, these platforms do not fully utilize the power of AI and ML that can alert owners about their asset condition, for example.
Challenges: High competition against local plumbers, carpenters, and other service providers.
Community Management Platforms like Apartment Complex Management & Facility Management
Digital platforms like MyGate, No Broker Hood, and Apna Complex have emerged to address the problem of poorly performing RWAs (Resident Welfare Associations). These digital portals create a simplified ecosystem to conduct essential community management activities. These include visitor access management, apartment-complex communication, and common area maintenance, among others.
The platforms overlooked individual homeowners looking for inclusion and a streamlined rental and property management system for higher yields.
Challenges: Lack of enough information to cater to the needs of different homeowner categories.
Scaling (RE) Real Estate And Driving Efficiency Through PropTech
According to CNBC, the real estate sector noted sales of a whopping 5.64 million units in 2020, the highest since 2006. And PropTech is sure to boost the numbers.
From customer relationship management to finance, brokerage, and other property management services, PropTech solutions can enhance every real estate niche.
Get all Real Estate Actors Under One Roof/ Ecosystem
Technology can get all the real estate actors, including sellers, buyers, landlords, tenants, and brokers, under one roof. Cloud and data management apps can simplify the entire process, from forming an agreement to electronic signatures, KYC, and more. All of this, in a completely secure manner.
Besides, brokers can run a background check on tenants, level up sales and marketing, and handle landlords and tenants smoothly.
Enable Multiple Services
PropTech is here to facilitate a host of services for all stakeholders. Tenants can easily find homes at online property platforms, ensure regular upkeep and repairs through maintenance apps, and visit property virtually.
On the other hand, property owners and management companies can reach a larger audience through property videos and 3D displays. Besides, they can implement robotic process automation (RPA) for administrative work while the human capital focuses on strategic decisions.
Creating Transparency
Thanks to blockchain, all the transactions will take place with complete security and transparency. It will also facilitate paperless registration processes to streamline the flow. Additionally, AI can help with predicting property valuation through analysis algorithms.
In a nutshell, all the information will be stored centrally, accessible by the concerned stakeholders, eliminating fraud or other discrepancies. Even the JLL report reflects rising transparency levels due to PropTech integration.
Integration of FinTech with Real Estate
The financial industry was one of the first ones to incorporate technology. Integrating PropTech with highly innovative FinTech solutions will significantly mitigate the monetary challenges of the industry.
Exchange of cryptocurrency can ensure high security while e-wallets like PayTM, cards, and UPI transfer will simplify standard transactions. This also includes invoicing and tax payment solutions for property management companies and owners.
Exponentially Scale Using PropTech
The future of the industry is projected to primarily comprise CRM, property management, and FinTech software. According to an Asian real estate report, about 70% of real estate firms are expanding their PropTech investments. The top investment areas include big data (55%), the Internet of Things (32%), AI (42%), and business automation (32%).
PropTech is here to stay, and as a result, the real estate industry is sure to boost exponentially. The numbers speak for themselves.
Prabhat Kumar Tiwary is a Stanford Business Graduate and is currently the CEO and Founder of YourOwnROOM which is a residential real estate prop-tech rental and property management company with 0.5 M sqft. of Residential assets under management across Bangalore and Pune in India
Disclaimer: The views expressed in the article above are those of the authors’ and do not necessarily represent or reflect the views of this publishing house. Unless otherwise noted, the author is writing in his/her personal capacity. They are not intended and should not be thought to represent official ideas, attitudes, or policies of any agency or institution.
