Posted on Aug 01, 2020
According to Wikipedia, Proptech, or Property Technology is the application of information technology and platform economics to real estate markets. More generally the term is applied widely to startups who have intentions of disrupting the way business is done in the Real Estate sector.
One of the goals of Proptech is to reduce paperwork to make transactions quicker and more efficient. Some of the other digital real estate technologies include property management using digital dashboards, research and analytics, listing services/tech-enabled brokerages, mobile applications, residential and commercial lending, 3D-modeling for online portals, automation, crowdfunding real estate projects and shared spaces management.
The last few years have seen many startups trying to target virtually every segment of the property market chain, attempting to disrupt and improve how the current market players (developers, buyers, sellers, renters, investors,and real estate professionals) design, construct, market, discover, transact and operate real estate. These startups have been supported by seed funding and investment from a range of sources. Internationally there has been some serious capital poured into real-estate tech startups by venture investors.
There is no doubt that various forms of technology have made a massive difference to the way in which real estate is managed and transacted over the past few decades. Some of the biggest impact has come from the most ubiquitous technology. The ability to complete contracts by email and converse with clients whilst outside of the office (by cellphone) have had a major impact on the speed of deals. Even the advent of digital platforms on the internet , and search engines (replacing newsprint and printed advertisements ) have revolutionised the agency business.
In the management industry those same technologies have made the task of the property manager more efficient, and dedicated programs should enable even greater efficiency.
But even with those changes, compared to other sectors, real estate is a dinosaur when it comes to evolution and the effective use of digital technology. Whilst the technology that is being utilised has created superficial changes to the industry, what has changed very little is the customer experience. In the digital age of the internet of things, consumers expect a lot more from their experience of the physical world. And what is becoming very apparent is that no matter how good/innovative/labour saving the technology, the customer experience is little changed if the people utilising the technology don’t have the requisite skills.
There have been great advances due to technology: We can now see the state of a roof with the aid of a drone, without having to climb a ladder. We can have a body corporate meeting whilst in our pyjamas with the aid of zoom. We can pay our rent with an electronic transfer without the landlord having to knock on the door every week. We can “walk through” a building with the aid of Virtual Reality (and a pair of goggles).
But at the same time an email with a simple question to a body corporate manager doesn’t get an answer if the person receiving it can’t be bothered. Or property management tasks flagged in a software program don’t get done if the human in front of the screen doesn’t action them. Or an agent wastes a client’s time taking them to a site without qualifying first.
Choosing the appropriate technology for a task should not be difficult. Unfortunately too often the allure of technology seduces the decision maker, such that the most appropriate solution is sidelined by the shiniest one. Nail plates and nail guns make us more efficient. But there are times when the right tool is an old fashioned hammer.
In short, the technology can greatly aid both the client experience, and the efficiency of the agent. But effectiveness comes from actually using the technology that exists. And too often we are finding that either people don’t know how to use it or don’t have the skillset to make it work efficiently. Machine-learning , cloud computing and the rest should be enabling, not defining.