These analysts predicted an increase in mergers and acquisitions, a decline in investment, and sustained attention to ESG.
FREMONT, CA: PropTech Insider questioned many proptech CEOs, VCs, and other influential people about what the industry might expect in 2023. Their predictions included, among other things, a continued strong emphasis on ESG, a significant decline in venture capital investments, and an increase in merger and acquisition (M&A) activity.
The potential of proptech to increase housing access and affordability excites the most. Supply continues to be the biggest obstacle to home ownership and affordability, which is made worse by high mortgage rates and inflation. To meet demand, industries still lack 2 million to 6 million devices in the United States. Regarding its influence on zoning change and subsidies, industries think the policy will be crucial in increasing inventory.
People are most enthusiastic about the role that technology will play in enabling quicker, more dependable ways to add density to neighbourhoods where zoning has been changed, in bringing speed and certainty to permitting and approvals, in changing how they view renting, and in lowering construction costs, largely by easing labour shortages.
Many industries are experiencing tighter markets. The project developers will be considering proptech to further distinguish their projects.
The concept of building community and community identity in the purchasing process will be shown on the residential side. Proptech will play a significant role in it. As builders and developers work to seal deals and lower the number of reneging purchasers, creating branded experiences that exist between residential sales and resident experiences will be crucial. By fostering a sense of place, proptech will be essential in accelerating the post-pandemic resurgence of retail.
Proptech entrepreneurs will be under more pressure to create viable companies with a clear route to profitability. In the past year, they have witnessed numerous proptech investments suffer significant losses.
Investments will rise for solutions showing a strong path to self-sustainability and a market fit. The desire to download an expanding selection of apps that each offer a specific answer is dwindling. Integration and consolidation will receive more attention, which presents a fantastic opportunity for M&As. By consolidating through M&As, proptech companies will be able to expand their clientele and offer a more comprehensive service in 2023.
Proptech 1.0 has developed into a legitimate institutional asset class and will keep setting new records for growth on the one hand. Conversely, proptech 2.0 has witnessed the emergence of new asset classes like PropCo.