What actually is proptech?
5 min read
25 July 2019
A portmanteau word for 'property and technology', proptech stands for any technological solution designed for the property market.
Proptech includes software and hardware solutions, ranging from property websites like Rightmove to modular housing.
Like ‘fintech’, this buzzword has taken on new meaning over the years. People tend to use it to describe innovative startup companies with new business models, rather than the technologies they use or make possible. And because it’s a collective term for startups, people underestimate its power.
In fact, proptech is a small but important part of the wider digital transformation that’s taking place in the property industry. That’s because it harnesses new consumer attitudes and leads to a change in mentality for the entire property industry and the way transactions and movements are taking place.
Technology for the property market
So, what do we mean by “proptech”? Virtually any company that introduces or develops technologies like the ones mentioned below could be classed as proptech, but the list is far from exhaustive:
- Artificial intelligence, such as chatbots and virtual assistants using voice-enabled commands to search properties
- Big data analytics, with algorithms produced by collection tools that estimate property value
- Computer vision used with special mapping robots and safety inspection drones
- The Internet of things (IoT), replacing magnetic access cards with customised electronic bracelets
- Machine learning used in smart buildings with sensors that collect IoT data to run more efficiently by analysing people’s movements and adapting to their needs (air conditioning and lighting, for example)
- Deep learning used for market forecasts, investor analysis, and possibly even combined with blockchain technology to minimise the risks of buying and transaction times
Examples of proptech
There’s widespread support for proptech, so its effects are pervasive. Just look at the way co-living is disrupting residential property management. A decade ago, home swapping would have been unthinkable, but it’s now gaining traction in the seasonal rental sector.
Let’s not overlook the way crowdfunding is redefining property financing and investment. And you needn’t look too far from your own office to see that new professions, such as drone pilot and data aggregator, are cropping up in the property management business.
Clearly, technology can be a disruptor. But it’s also a great opportunity for those who embrace it early on, rather than resist or try to overpower it. There are countless success stories.
Companies like PurpleBricks have made great achievements in sales, Yopa and ValPal in automated valuations, Habiteo and Matterport in marketing and development, and VTS in tenant management. And new ideas are cropping up by the minute. Opendoor, for instance, is an emerging developer that buys property online for prices set by big data algorithms. It refurbishes the properties using contractors, and then opens them up for self-guided tours with connected cameras and locks.
And that’s just the tip of the iceberg. Ubitquity uses blockchain technology to store deeds and streamline property transfers. Front Door helps potential buyers book a viewing, Ikea and Dulux use augmented reality apps to help landlords visualise new décor. The list continues, with 3D printing, connected objects, mobility technology and so on.
This mostly untapped field is an opportunity for investors, developers, estate agents and even landlords to make bottom-line gains. Using software that streamlines projects and connects staff with contractors can make a real difference to your bottom line.
Tech that automates project management and handles the finances on your behalf can also drastically cut costs. That’s not to mention the revenue boost that comes from using automated pricing software, cutting-edge smart systems, value-adding sensors, augmented reality tools that maximise space and convenience for the dweller.
Proptech is a game changer. As the physical and the digital world merge, being proptech savvy will go hand-in-hand with future-proofing your business. Take a cue from the companies mentioned above and capitalise early on. Prioritise it, budget for it, invest in it. Then and only then can you truly say that you’ve had a hand in solving the challenges of the property market.