The onslaught of digital transformation trends that transpired from the last few years has been unprecedented, with hundreds of proptech and fintech startups popping up to help alleviate the many pain points of a traditional industry in a digital world. According to Deloitte’s 2022 Outlook report, real estate company tech budgets could see an average increase of as much as 10.3% in 2022. The pandemic forced real estate leaders and its varied players to adopt and embrace the capabilities that digital transformation brings, and here we take a look at the trends that have made a significant impact and those that experts in the industry say are here to stay.
1. Augmented Reality (AR)/Virtual Reality (VR)
AR technology enables agents to show prospects what a property looks like through virtual tour, a tremendous solution in the lockdown era of the last couple of years. Virtual tours have also branched off by offering mobile showrooms using VR goggles for enhanced customer engagement.
2. Extended Reality Technology
Extended reality technologies picked up speed during the pandemic as it offered diverse solutions for house sellers and buyers in terms of house viewing, while allowing interior designers and architects to offer more immersive experiences of a property’s prototype. It can involve VR, AR and mixed reality (MR). It keeps everyone involved on the same page and increases customer satisfaction because customers not only get the look of the place, but the ‘feel’ of it as well.
3. Building Information Modelling (BIM)
BIM is smart 3D modeling that offers architects, engineers and construction professionals the tools and insight to better plan and build property infrastructure, enhancing collaboration, efficiency and saving time.
The applied use of drones was a game changer for agents and brokers who could now bypass hiring expensive and heavily restricted aerial photography, and showcase properties via high quality, landscape views at a fraction of the time and cost. Importantly, drones had the additional advantage of giving prospects the chance to see hard-to-reach areas (roof, attic, crawl spaces etc).
5. Smart Contracts
Smart contracts are a blockchain application that records the conditions of contracts as computer code. When all conditions are met, the contract is activated and asset exchange happens. In real estate, where large transactions are the norm, smart contracts save time, protect against fraud, reduce cost and remove middlemen.
The internet of things is a technology that uses the internet of interrelated computing devices that are embedded in everyday objects. For real estate, this is also often translated to smart home devices with integrated sensors (and ultimately bumping up property value), such as automated lighting and ultra security measures. These devices are all centralized onto one dashboard which can be accessed via a smartphone app, giving homeowners unparalleled control of the property.
7. Big Data/Analytics
Data analytics solutions help make sense of huge data sets and increase understanding of customer segments and behavior. With the value of data becoming more widely accepted and valued, more companies are treating it as an asset, as it allows agents to segment the customer base, predict behavior patterns, personalize experiences, nurture leads, and improve outreach with machine learning powered predictions. The automation of much of these processes also means the elimination of tedious manual work for agents, and thus saving valuable time.
8. Mobile Optimization
Although agents are familiar with web-based tools to offer property search capabilities for their clients, many of them are still not optimized for mobile, which is a massive lost opportunity as today’s consumer searches widely online, on their phone. In addition, Google actually announced in 2021 that it would start penalizing non-mobile friendly sites.
A technology that is disrupting traditional processes, blockchain-fueled tech can be hugely beneficial to real estate because it eliminates the need for middlemen and bank verification while also safeguarding against fraud or data breach risks.
10. Real estate as a service (REaaS)
Over three-fourths of Deloitte’s 2021 real estate survey respondents said building partnerships to provide new offerings to customers can also enable real estate as a service, and that their companies will likely expand partnerships with or invest in proptechs, which could help firms deploy the REaaS delivery model, combining strategy, tech and data to deliver superior digital and physical services.
Still a ways to go
All that said, 60% of those tech executives surveyed at real estate companies indicate that their tech platforms are still on the journey of modernization, with only 20 to 40% of respondents expecting increased budget in cloud, data analytics, artificial intelligence, blockchain and robotic process automation (RPA) spending, although the anticipation for such has been marked and increased since COVID hit. It’s evident that, despite implementation of these new technologies being hindered by the legacy systems of a traditional industry, those who are forward thinkers in the sector are interested in all forms of asset digitization and want to be heavily involved at the confluence of where digital transformation solutions meet real estate.