The use of property technology, or proptech, has dramatically influenced how the real estate market operates. An expert explains how the property sector can maximise the benefits.
In today’s digital age, the best way for many industries to move forward is to embrace technological transformation – and the real estate sector is no exception. Recent developments in technology have dramatically altered how the property market operates and these changes have resulted in several benefits.
“The proptech industry in Australia has grown significantly in recent years as the power of technology to create more positive, efficient, and transparent experiences for renters, property owners, managers, and agents is realised,” says Mina Radhakrishnan (pictured), co-founder of Australian property management start-up :Different. “The traditional property industry, which is very manual and paper-based, has often resulted in friction between these core parties but with the support of tech to automate the everyday tasks, many of these issues are addressed.”
However, Radhakrishnan says relying on technology alone is not enough and a balance between the human and technological aspects is needed for the property market to progress.
“Property is a very personal thing – you’re often dealing with someone’s most prized possession, so balancing tech with people to get the best out of both provides the optimal outcome for everyone,” she says.
The benefits of proptech
As with most technological advancements, the goal of proptech is to enhance efficiency.
“Proptech is changing almost every element of the buying, selling, and renting journey,” Radhakrishnan says. “In fact, in almost all cases, the entire process can be done online – from inspecting a property through virtual 3D listings to buying a home through live online auctions. And it’s helping to make the journey more efficient and transparent for all parties.”
In terms of property management, she says proptech can provide a greater level of transparency and connectivity between investors and property managers, which is one of her firm’s focus.
“Through our online portal and apps, we provide owners complete transparency on every aspect of their property like exactly how much they'll be receiving each month and what maintenance work has been requested,” she says. “It sounds simple but it’s helping address some of the traditional issues that have plagued the industry.”
Radhakrishnan says the coronavirus pandemic has also spurred the adoption of proptech in Australian real estate market.
“COVID-19 has… [shone] a light on how tech can help propel the industry forward, not just during these times but long-term to meet changing consumer attitudes and capitalise on efficiency gains,” she says. “When we went into lockdown a few months ago, virtual inspections quickly became the new norm for example. We expect this to continue as we all adapt to the new normal.”
The future of proptech
Radhakrishnan expects the use of proptech to increase in popularity in the near future. The key is improving user experience.
“Keeping the end-user front of mind will be important for adoption to continue to grow,” she says. “Technology needs to aid the consumer experience. A lot of people think technology can be dehumanising but I fundamentally don’t believe that. I think building great tech products and systems will create a better experience and outcome for consumers in the long term.”
Radhakrishnan says she sees a future where there is “greater transparency between owners, tenants, trades, and property managers along with a stronger reliance on apps and portals.”
“Having one place to manage and view everything related to your property will become the norm, instead of having to search for a series of e-mails in your inbox to gain context, or search for random text messages,” she says. “Data will become the basis of all decision making instead of ‘hyperlocal’ agents speaking anecdotally and with little facts.”
Radhakrishnan says that for the real estate industry to move forward “having technology handle the really simple tasks that can be automated” is important, but equally important is “having humans handle the tricky situations that require compassion.” She says the COVID-19 rent relief efforts are among the situations where “empathetic conservations” between landlords and tenants are required.
Most impactful proptech tools
For a proptech app or tool to be effective, it must make existing real estate services more accurate and efficient.
“Sometimes people can get caught up in using new technologies for the sake of technology,” Radhakrishnan says. “But what we need to focus on is creating a good experience by being transparent and communicative through real-time automated workflows, great user experiences, and intelligent internal systems that manage the mundane. This can be executed by using tools that already exist today.”
She says the use of virtual and augmented reality or VR/AR, for example, can make prospective tenants comfortable about their new space through virtual walkthroughs, while drones are effective in showing aerial views and other vantage points buyers normally do not have access to.
Here are five of the most impactful tools that are revolutionising the real estate market:
1. VR/AR
Through virtual walkthroughs, agents can show potential buyers how a property looks like even before it is constructed. They can also let clients “experience” the different units available and make upgrades and modifications on the spot. VR/AR can also be a useful tool for agents with remote buyers or those who want to show their clients multiple properties at the same time.
2. Drones
With their ability to capture high-quality aerial photos and videos, drones can be a handy marketing tool. They can also be used to provide a visual mapping of the grounds or neighbourhood of a listing.
3. Property management apps
These apps help landlords and property managers efficiently and effectively manage their properties. Using these apps allows them to save time by automating simple tasks, giving an overview of their finances, and managing their accounts.
4. Internet of Things (IoT)
Connectivity is one of the biggest advantages of proptech. IoT is defined as “a network of connected devices that are able to communicate with each other to the benefit of the user.” In other words, IoT is used to streamline real estate processes to remove inefficient steps and improve user experience.
5. Blockchain
Blockchain presents a new means for buyers and sellers to connect with each other. Using blockchain, they can eliminate intermediaries from real estate transactions, allowing them to reduce costs.
