With the evolution of technology and investors' interest channelizing towards real estate businesses, Proptech opens new prospects for realtors.
FREMONT, CA: Despite being a relatively new industry, the Proptech sector is growing rapidly. According to a report, in 2008, US$20 million were invested in proptech. The number had already reached US$12 billion by 2018. Real estate stakeholders have realized the value of technology for the sector and are investing generously to facilitate and streamline the operations in the industry. Conventionally real estate comprised an expensive asset class that was highly illiquid and involved several mediators. The future of the proptech sector will be driven by the need to address the aforementioned challenges. Here are the major emerging trends in proptech.
Blockchain and Tokenization
Blockchain is an inherently disruptive technology that promises to transform industries across the verticals. Tokenization is the process of digitizing assets into fractional units known as tokens, or digital representation. Tokenization involves dividing the value of a property into fractional shares. Thus, tokenization will enable the common man to invest in real estate assets by lowering the barriers for investor entry. Tokenization will also enable the real estate sector to become more liquid. Incorporation of blockchain will also enhance the security factor in real asset transactions, especially as the Blockchain transactions are carried out on a ledger system that digitally records every transaction, thereby minimizing the chances of fraudulent activities.
Artificial Intelligence (AI) and Big Data
AI has immense potential for the development of proptech in the future. Advanced AI algorithms enable customers to optimize their search results while looking for homes. It analyzes customers' previous search results and recommends properties that have similar features and facilities. AI also helps real estate brokers to identify and track prospective clients. The brokers spend vast sums on advertising and marketing the properties. AI can enable the brokers to optimize their marketing efforts by focusing the efforts on high potential customers. Moreover, the brokers have to spend a significant amount of money on tedious real estate processes. AI can assist in automating much of the redundant tasks in real estate, thereby freeing up time and budget for the agents.
Mortgage is a tedious process that can require weeks to process a loan. Even the applications that were approved in the past can be turned down by the underwriters. However, the above challenge is getting addressed by a new generation of software robots that can automatically process mortgages, thereby removing the slow and tedious manual processes. The real estate firms have begun to realize the importance of adopting technology to streamline mortgage procedures. AI has a role to play in mortgage processing too. AI can impact operational efficiency as well as the complex paperwork involved in mortgage processing. With further advancement in technologies, mortgage processing will become simpler and transparent.
Mobile Proptech Trend
Mobile technology is transforming the way people own, sell, and buy properties. Ranging from improved property management to smart homes and 3D floor plans, consumers and real estate agents have a wide array of options owing to the availability of robust mobile technology. Earlier, the customers had limited access to information related to properties. Currently, consumers can utilize mobile technology to assess the condition of a property. Further, mobile technology and apps streamline communication among various property stakeholders such as landlords, tenants, property caretakers, and other relevant players. Smart devices connected to mobile apps enable the occupants to create energy-efficient spaces. Smart devices also facilitate predictive maintenance of the property by sending an automatic notification before the smallest of the maintenance issue turns into a problem.
Thus, there are unprecedented applications of technology in real estate. Proptech is set to grow exponentially in the future, and it will be a wise decision to invest in it.
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