The Emerging Trends in Real Estate Europe 2021 revealed that 78% of survey respondents believe the use of technologies for the property sector (proptech) is set to continue trending upwards over the next three to five years, with investments expected to reach $69 trillion by 2030. While the number and scope of emerging proptech trends are only rising, some have already been singled out as trends that will go the distance. Here are just a few of them.
Focus on better commercial strategies with proptech that emphasizes AI algorithms assistance
Currently considered one of the most powerful weapons in real estate marketing operations, artificial intelligence algorithm-backed assistance is expected to quickly become the norm, offering a wide range of capabilities, including:
- Better recommendations (providing more customers with more relevant options to choose from)
- Property management (working closely alongside mobile app technology that caters to property and lease listings, buyers and even maintenance requests etc)
- Superior data analysis (algorithms would help owners improve data aspects in order to provide better services, more transparency and increased accessibility.
Increase of real estate crowdfunding platforms
Today, with over 80% of the world’s population using a smartphone, investing is no longer reserved for the wealthiest, and anyone with a smartphone and WiFi is able to become an investor. With Europe soon allowing regulation of crowdfunding across all European states, and proptech simplifying the search, rent, purchase and sale processes of buildings, it is expected that the trend of real estate crowdfunding platforms will continue to rise over the next few years. This is especially the case as studies of 2020 and 2021 have clearly shown that investors want to participate in and support even smaller businesses involved in this sector. The appeal of such crowdfunding technologies is also evidenced by the heightened equal opportunities created for both issuers and investors, with last year seeing more investors who were Black, women or people of color than in previous years.
Increased need for customer-focused support
With such wide-scale technology adoption in the property sector through these proptech solutions, it is evident that real estate owners, developers and other related parties will also need to consider fully-integrated tech solutions that truly cater to end users’ expectations, making sure to guide them along the rapidly-changing face of such a time-honored industry. That means additional digital solutions and tools that will focus on post-implementation, customer-focused ‘hyper-care’ support to ensure customer satisfaction as they adapt to these new platforms and apps.
Rise and rise of immersive technologies
VR and AR technologies have been a huge hit with consumers for the past several years, and even more so since the pandemic struck. They were crucial in alleviating customer pain points by allowing them to tour multiple properties virtually from anywhere, worldwide, while AR tools allowed owners and agents to showcase different interior setups depending on the client and their preferences. Elements of immersive technologies are now considered a staple in many real estate professionals' marketing arsenal, and new proptech companies are tapping into even more ways to make immersive technologies customer-intuitive to help them down the purchasing journey and make quicker decisions. Some proptech AR/VR companies are even able to provide detailed property tours of listings that haven’t been built yet. Goldman-Sachs reported that VR will be at the top of proptech disruption by 2025, with an estimated 1.4 million agents relying on the technology by that time.
The Internet of Things (IoT)
According to the PropTech Global Trends Report 2020, the Internet of Things (IoT) category is leading the pack with 16% of all proptech companies, followed closely by Long-Term Sales or Sale Search category with 14% of the companies. This composition shows a healthy diversity in different sectors, while revealing how large the protech sector is, with much potential still for different verticals to experience a proptech revolution. It is estimated that by 2025, there will be over 152,000 IoT devices connecting to the Internet per minute, with IoT solutions having the potential to generate $4-11 trillion in economic value.
Blockchain will continue to power proptech
According to the World Economic Forum, over 50% of survey respondents believe that in 2025, 10% of global GDP information will be stored on blockchain technology. Blockchain tech collates data into ‘blocks’ which link to one another and create a ‘chain’, considered incredibly secure because the digitized ledgers share information but cannot be altered or forged. Blockchain is fast becoming an important player in real estate, used to purchase, sell and lease properties, as well as constructing smart contracts, an important facet that is expected to also see acceleration because it removes the need for third-party involvement with heightened security and transparency.
eSigning takes off
The global digital signature market is projected to grow on average at 26.3% annually from 2021 through to 2027, indicating that eSigning will become a mainstream solution. In addition, the market is projected to reach $5 billion by 2025 and nearly $24 billion by 2030. Currently we are already seeing existing proptech solutions build integrations with cloud-based applications so that document signings and exchanges happen in one place, its obvious appeal being its flexibility and security.
Roughly 85% of investors surveyed said that proptech startups they’d committed to were meeting or already beating expectations for customer growth, while 71% said they are likely to pour more money into proptech in following years, investing in an average of eight startups. Some industry experts also speculate that legacy real estate companies will also become major players, becoming much more aggressive in their tech, innovation, VC and startup M&A activities. These players, and others who are willing to leverage their industry history alongside a serious and enthusiastic adoption of tech, will inevitably be the ones to draw on all the benefits that proptech solutions have to offer, harnessing them into a major competitive advantage.