Property technology, or ‘PropTech’ for short, is a catch-all term for describing a wave of companies using technology to refine, improve or reinvent the gamut of services we rely on in the property industry.y there.
While PropTech may not be as developed as ‘FinTech’, the booming technology segment of the finance community, the buzz is definitely building and the scent of revolution is in the air.
Change is in the air
“It’s an exciting time in real estate right now,” says Michael Davis, Head of JLL London Unlimited. “PropTech is starting to make its presence felt both in residential and commercial. And, while it has a long way to go before it reaches the level of disruption FinTech has achieved, it will usher in big changes over the next few years.”
And indeed, signs of change are cropping up around the world. Companies such as Berlin-based machine and deep learning specialist Leverton are transforming the tedium of document management, while Datscha from Sweden is speeding up commercial property search and ownership identification. In London, Pi Labs has launched as the region’s first Venture Capital firm for PropTech.
Resi as the early adopter
With a FinTech overlap in home insurances and mortgages, the residential market is currently at a more advanced stage of PropTech development and integration than any other property sector. Apart from the now-common applications in online ‘search-and-shop’ portals for house-buyers, augmented and virtual reality (AR and VR, respectively) have also found their way in. Zoopla launched an iPhone app with AR as long ago as 2010 and Rightmove began trials of VR technologies last year. Now, even traditional high street estate agents such as Foxtons are adopting VR.
However, Davis believes that change is on its way for commercial property, too.
Opportunities for commercial property
Automating transactions across online platforms is feasible for smaller properties. “However, where you’re dealing with hundreds of thousands of square feet, this isn’t practical,” he says.
“It’s a huge undertaking that requires the expertise of a property agent who adds market-based and technical experience; experience and knowledge which will make the difference between striking an exceptional deal or a bad deal. So, what I think we’ll see over the next five years is a dramatic change in the role of the traditional agent, from broker to adviser.”
Tapping into Big Data
PropTech also has the potential to provide the industry with richer, data-based insights. A prime example is Deloitte’s The Edge. Based in Amsterdam, it boasts an extensive array of smart features and super-efficient systems, all controlled via an army of 30,000 sensors. Touted as a successor to the title of the world’s ‘most intelligent’ building is the Intel HQ in Tel Aviv, due for completion in 2019. Built around the company’s IoT technology, it could take personal interaction – and surveillance – to a whole new level.
A new tipping point
In a world where people are increasingly reliant on technology, PropTech carries the potential to significantly transform and propel the property industry forward as FinTech has done for finance.
Many companies have been quick to get in on the action, we’ve seen a huge flurry of activity in the proptech world in recent months. Over the next couple of years it’ll become clear which of these technologies thrives – or falls by the wayside. According to Davis, we are at a tipping point for technology in the property sector, and the early adopters will have the edge.
This article was first published on JLL Real Views, JLL’s global site providing expert insights on the trends and developments shaping real estate.