Technology And Its Impact On The Real Estate Industry
Sangeet has more than 9 years of experience in leading product and technology for growth and early-stage ventures. Previously, he founded his own venture in proptech, and created a category defining edtech product, used globally. At REA India that owns Housing.com, Makaan.com & PropTiger.com, he heads product and design and is passionate about changing the way people find their dream home. Sangeet is a graduate from IIT Delhi.
Not much has changed in decades buying a home remains one of the most important decisions for an average person, followed by maybe buying a car? The inherent tangibility of the purchase in that “it is just four walls” but what you call “home”, has been an emotional concept, rather than a commodity that you can buy off an e-commerce website at an attractive discount.
While the baby boomer generation would say “I will happily invest all my hard-earned money into a home, because it is my legacy”, a millennial would think “I am not sure whether this is about legacy for me, but I want a home that I am proud of, now and today”. But for both where they live reflects on the quality of life they lead and on their identity, even more so after the pandemic. So, “finding the right home”, as cliched as it may sound, is not a cakewalk. The same applies to real estate investors looking to make financially prudent decisions to invest their life savings, and get a higher return on investment on real estate when compared to the array of other high yielding investment options available today.
In the early 2000s, the biggest revolution in PropTech was bringing property listings online and solving for information asymmetry. Players such as Zillow, Trulia, took the lead and went to the extent of estimating the “right” value of homes using historical data and demand analytics. Over the years, tech innovations and changing customer behaviour have pushed the envelope way further for the PropTech industry.
There are 4 big consumer technology trends that have pushed the real estate industry to embrace newer technologies in this ever changing world.
Smaller devices, increasing capabilities
Down from 20-inch wide desktop screens, 90% of home shoppers are now on mobile. The new-age Instagram friendly highresolution cameras have helped make the home search a more “real experience”, saving enormous time, and time is money for millennials. Geolocation capabilities have increased the ease of finding a home near your workplace, your child’s school, or your parents’ home. Interactive maps allow you to pinch and zoom, and explore an area without visiting it on foot, much like you look up a restaurant or movie’s reviews before you decide to invest time and money into the experience.
5G has only taken it to the next level, making it a seamless and zero friction experience with unimaginable load times. Moreover, property alerts enabled by push notifications on mobile ensure that you are notified of a new property or a price change instantly. Every innovation to mobile devices opens up a landscape of opportunities to personalize the experience for users.
Embracing immersive technologies
With Facebook transforming itself into Meta, it is clear where the world is headed. Immersive technologies such as Virtual Reality and Mixed Reality, which hit the horizon a few years back, are now at the doorstep across industries and PropTech is no different.
3D home tours and online video walk throughs have emerged as great tools for customers to go house hunting uniquely. And it does not stop here. Now AR is also helping consumers choose the exact furniture that could fit into their new homes through interactive floor plans and e-commerce, much before they move into their new home.
Emergence of FinTech
Much like its impact on other sectors, FinTech is transforming last-mile real estate services. Financial services providers have evolved to offer home loans online, with instant credit checks and e-sanctions, in turn benefiting consumers to grab the best offer out there for the biggest purchase of their lives.
Service providers have digitized paperwork to hand hold consumers with cumbersome documentation with the help of e-signature solutions linked to government ids providing a more reliable transaction experience. Even escrow services are being enabled with digital agreements executed between parties with a swipe of a finger.
Concerns around Privacy and Digital Frauds
With an over reliance on technology, consumers are more exposed to the internet today, than ever before. Real estate businesses are becoming aware of such threats and have started leveraging AI and machine learning to spot red flags and provide a safer environment for consumers to connect and transact online.
With the never ending debate on where to draw the line for using customer data and what privacy means to users of tech platforms, recent news about Zillow using its customers’ data to guide their own property buying decisions has brought critical issues that need to be addressed to the forefront. Platforms across industries, including real estate, have to continue to sincerely innovate to create and monitor this safe environment for their users.
What does the future hold?
Given the nuances of the real estate ecosystem the high ticket size, the breadth of stakeholders and processes involved that make a transaction possible PropTech will continue to disrupt the way the real estate industry functions. Today, no VC investment firm wants to be an onlooker and hence it does not come as a surprise that real estate technology companies have globally raised over $10.6 billion by mid-2021, up from the $8.3 billion during the same period last year.
What comes next will be interesting and the PropTech game has just begun!
Not much has changed in decades buying a home remains one of the most important decisions for an average person, followed by maybe buying a car? The inherent tangibility of the purchase in that “it is just four walls” but what you call “home”, has been an emotional concept, rather than a commodity that you can buy off an e-commerce website at an attractive discount.
While the baby boomer generation would say “I will happily invest all my hard-earned money into a home, because it is my legacy”, a millennial would think “I am not sure whether this is about legacy for me, but I want a home that I am proud of, now and today”. But for both where they live reflects on the quality of life they lead and on their identity, even more so after the pandemic. So, “finding the right home”, as cliched as it may sound, is not a cakewalk. The same applies to real estate investors looking to make financially prudent decisions to invest their life savings, and get a higher return on investment on real estate when compared to the array of other high yielding investment options available today.
In the early 2000s, the biggest revolution in PropTech was bringing property listings online and solving for information asymmetry. Players such as Zillow, Trulia, took the lead and went to the extent of estimating the “right” value of homes using historical data and demand analytics. Over the years, tech innovations and changing customer behaviour have pushed the envelope way further for the PropTech industry.
There are 4 big consumer technology trends that have pushed the real estate industry to embrace newer technologies in this ever changing world.
Smaller devices, increasing capabilities
Down from 20-inch wide desktop screens, 90% of home shoppers are now on mobile. The new-age Instagram friendly highresolution cameras have helped make the home search a more “real experience”, saving enormous time, and time is money for millennials. Geolocation capabilities have increased the ease of finding a home near your workplace, your child’s school, or your parents’ home. Interactive maps allow you to pinch and zoom, and explore an area without visiting it on foot, much like you look up a restaurant or movie’s reviews before you decide to invest time and money into the experience.
5G has only taken it to the next level, making it a seamless and zero friction experience with unimaginable load times. Moreover, property alerts enabled by push notifications on mobile ensure that you are notified of a new property or a price change instantly. Every innovation to mobile devices opens up a landscape of opportunities to personalize the experience for users.
Embracing immersive technologies
With Facebook transforming itself into Meta, it is clear where the world is headed. Immersive technologies such as Virtual Reality and Mixed Reality, which hit the horizon a few years back, are now at the doorstep across industries and PropTech is no different.
3D home tours and online video walk throughs have emerged as great tools for customers to go house hunting uniquely. And it does not stop here. Now AR is also helping consumers choose the exact furniture that could fit into their new homes through interactive floor plans and e-commerce, much before they move into their new home.
Emergence of FinTech
Much like its impact on other sectors, FinTech is transforming last-mile real estate services. Financial services providers have evolved to offer home loans online, with instant credit checks and e-sanctions, in turn benefiting consumers to grab the best offer out there for the biggest purchase of their lives.
Service providers have digitized paperwork to hand hold consumers with cumbersome documentation with the help of e-signature solutions linked to government ids providing a more reliable transaction experience. Even escrow services are being enabled with digital agreements executed between parties with a swipe of a finger.
Concerns around Privacy and Digital Frauds
With an over reliance on technology, consumers are more exposed to the internet today, than ever before. Real estate businesses are becoming aware of such threats and have started leveraging AI and machine learning to spot red flags and provide a safer environment for consumers to connect and transact online.
With the never ending debate on where to draw the line for using customer data and what privacy means to users of tech platforms, recent news about Zillow using its customers’ data to guide their own property buying decisions has brought critical issues that need to be addressed to the forefront. Platforms across industries, including real estate, have to continue to sincerely innovate to create and monitor this safe environment for their users.
What does the future hold?
Given the nuances of the real estate ecosystem the high ticket size, the breadth of stakeholders and processes involved that make a transaction possible PropTech will continue to disrupt the way the real estate industry functions. Today, no VC investment firm wants to be an onlooker and hence it does not come as a surprise that real estate technology companies have globally raised over $10.6 billion by mid-2021, up from the $8.3 billion during the same period last year.
What comes next will be interesting and the PropTech game has just begun!
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