Property technology
Property technology (or proptech, also called real estate technology) is the application of information technology and platform economics to real estate markets.[1][2]
Some goals of real estate technology include reducing paperwork or making transactions quicker and more efficient, it is often thought of as overlapping with financial technology. Contemporary digital real estate technologies could therefore include property management using digital dashboards, smart home technology, research and analytics, listing services/tech-enabled brokerages, mobile applications, residential and commercial lending, 3D-modeling for online portals, automation,[3] crowdfunding real estate projects, shared spaces management,[4] as well as organizing, analyzing, and extracting key data from lengthy rental documents.[5]
History of real estate technology
Real estate technology first targeted consumers following the dot-com boom. At a time when most sales and residential listings were on print media and real estate offices, the focus was on moving listings onto the digital media.[6] This has been successful, with companies like Zillow (US) and Rightmove (UK) being in the top listed companies in their respective markets.
The next wave (circa. 2008) involved making physical spaces more fungible - from holiday homes all the way to storage spaces. A notable example is Airbnb, which has made it possible for property owners to rent out their property for part of the year.
The current wave of is driven by a range of new technologies available, such as artificial intelligence and big data, which has already disrupted other areas such as finance. The application of these new technologies is furthermore shaped by social distancing requirements and regional lockdowns arising out of COVID-19 which have introduced changes in the way we are required to deal with real estate. [7]
Investment in real estate technology
There are currently many startups trying to target 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.[8] These startups have been supported by seed funding and investment from a range of sources, including some specialist real estate technology venture capital funds.
In the first six months of 2019, $12.9 billion was poured into real-estate tech startups by venture investors, which surpassed the $12.7 billion record for all of 2017.[9] In 2015, real estate tech reached record funding and deals levels, with more than $1.7bn deployed globally across more than 190 deals. This represents a 50% increase year-over-year and a whopping 821% increase in funding compared to 2011′s total. Deal activity also soared, growing 378% with respect to 2011′s total, and 12% year-over-year.[10][better source needed] This investment appeared to increase further in 2017 to £8.5bn.[11]
Residential real estate technology
Advances in the residential side of real estate technology encompass a number of target areas, but generally aim to reduce friction in the purchase, sale, or rental of a property.[12] Areas of focus include finding a home, selling a home, financing a purchase, closing on a property (including valuation, title & escrow, and insurance), managing a property, managing loans, and mortgage lending software. Many Proptech companies have recently a spike in demand for these solutions as the COVID-19 pandemic has jolted management companies from their "business as usual" routine. [13]
References
- ^ Guttman, Jonathan (2015). "The Impending Opportunity In Real Estate Technology". TechCrunch. Retrieved 2018-10-10.
- ^ Shaw, Joe (2019). "Platform Real Estate: theory and practice of new real estate markets". Urban Geography. doi:10.1080/02723638.2018.1524653.
{{cite journal}}: Invalid|ref=harv(help) - ^ Fields, Desiree (2018-02-02). "Automated Landlord". City Road Podcast (Podcast). Retrieved 2018-03-04.
- ^ Emig, Josh (2016-08-14). "Buildings are Giant Computers – Product Research at WeWork". WeWork Blog. Retrieved 2017-12-13.
- ^ https://gomedici.com/property-technology-proptech-fintechs-next-frontier/
- ^ Voices, Valley. "Modernizing Real Estate: The Property Tech Opportunity". Forbes. Retrieved 2020-07-23.
- ^ "How will Proptech change the way we deal with real estate? | Hacker Noon". hackernoon.com. Retrieved 2020-07-23.
- ^ "Where will the new wave of proptech companies take us?". Market Business News. 2020-07-17. Retrieved 2020-07-23.
- ^ Putzier, Peter Grant and Konrad. "Commercial Property Joins Tech Revolution as Spending Soars". WSJ. Retrieved 2019-08-18.
- ^ "Global Funding To Real Estate Tech Explodes, With Startups Raising $1.7B In 2015". CB Insights – Blog. 2016-02-17. Retrieved 2016-10-20.
- ^ "Global funding for proptech sector grew to £8.5bn in 2017". Property Week. 2018. Retrieved 2018-10-11.
- ^ "Tech firms disrupt the property market". The Economist. 2018-09-13. ISSN 0013-0613. Retrieved 2019-01-27.
- ^ "Proptech and the pandemic: Will coronavirus change how real estate works?". The Real Deal. 2018-09-13. Retrieved 2020-06-12.