Proptech Trends Here to Stay in the Next 5 Years

Here are the top 8 proptech trends that have gained traction in the last two years, and are projected to make a significant impact in the coming years.

Rikard Jonsson
December 23, 2021
5 min read

Table of content

Even before the term proptech was becoming a buzzword in 2017, proptech startups had already been around, albeit few. Now, all that has changed with the rapid acceleration of digital technologies, further compounded by the aftermath of the pandemic. The market opportunity for proptech is huge, with the global real estate tech market estimated at $521B (and a projected 8.6% CAGR between 2020-2025). 

Even though proptech is part of a wider digital transformation that’s happening in the industry, its scope is as wide as its impact is revealing when it comes to examining shifts in consumer behavior. That’s because of the wide array of emerging trends across all real estate sectors - working-from-home (WFH) disrupting the office space sector, co-living and distance-learning impacting residential, and crowdfunding impacting methods of investment. 

Here are some of the most important proptech trends that have gained traction in the last two years, and are projected to make a significant impact in the coming years. 

  1. Increased funding in proptech startups that focus on fractional and crowdfunding property investment opportunities - Fundraising by startups operating in the real estate sector is by no means new, but the sector has changed significantly in the last few years. The global crowdfunding real estate market is projected to grow from $13b in 2018 to nearly $870b in 2027, (that’s a 58% compound annual growth rate). Examples are Republic, Fundrise, and Groundfloor, although there are many others popping up.  
  1. Greater demand for virtual home tours - Agents who provide 3D home tours alongside listings are 32% more often marked as a ‘saved’ listing than those who don’t. Homebuyers have spoken, and agents are listening - 72% say they will continue to offer virtual tours even after being given the ‘all-clear’ from the pandemic. 
  1. Increase in startups specializing in virtual space - As was seen with one of the startup surprise hits of 2020, Matterport’s AI platform and powerful 3D imagery capabilities enabled the company to see a 5x increase in its user base as the pandemic hit. They’re now joined by a host of other startups in the mobile virtual reality field that aim to serve this increased need in helping visualize architectural drawings using immersive technology. 
  1. Proprietary Advertising Solutions - New digital platforms are stepping onto the stage when it comes to offering the sector innovative ways of advertising, with more efficiency, ease and trackability. These platforms and apps aim to empower agents with custom solutions to meet their marketing needs, network more efficiently, and launch hyper-localized campaigns. 
  1. Property Management & Automation - These new proptech startups provide the tools and support needed to fill the technology gaps and maximize profits, while automating a huge chunk of property management tasks. The property management market is expected to reach nearly $24 billion by 2026.
  1. More Smart Homes - A recent study showed that 62% of “Gen-Z” renters consider smart-home tech more important than traditional amenities, such as a gym and convenient parking. The household penetration of smart home devices is set to hit 40% in 2021, estimated to grow to over 57% by 2025. Proptech startups in this sector include smart home facilitators specializing in the automation, installation, monitoring, and management of various processes, from security control, to parking, to thermostats, etc. 
  1. The onslaught of “iBuyers” - iBuyers preceded the coronavirus pandemic, but they proved to be popular with a sector of homebuyers as it allowed minimum visits and interaction. In fact, 71% of sellers have stated they might consider using iBuyers to sell their home.
  1. 5G - 5G may be in a somewhat nascent stage in its introduction to the general public, but once here, its capacity to allow many more smart devices, capabilities and sensors will open new doors for proptech and real estate, because it will mean truly wireless workplaces and homes. Another way it could affect the sector is via security. It could spell out change for how we deal with sensors and cameras around a property. It’s a huge topic to unwrap, but it’s safe to say that the consolidation of 5G in the everyday world will mean a new kind of space-as-a-service forum, and may also require new ways for property owners and agents to deal with space: because 5G will require upgrade and addition of cell towers, ‘small cell sites’ will need to be added to buildings, light poles and other structures. 
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