Property technology (proptech) offers solutions to many existing and potential challenges in the real estate market. This is not a blanket statement as today’s proptech startups are increasingly leveraging emerging technologies that cater to specific niche in the real estate journey. Major proptech trends, according to a recent Statista survey, are in cybersecurity, construction technology, big data, automation, and artificial intelligence.
With a valuation of $18.2 billion in 2022, the proptech market is expected to expand significantly, reaching $86.5 billion by 2032. These figures show that startups have many opportunities to capture potential growth and tap into the emerging market demands of the proptech industry. In this article, we explore some of the top proptech trends that will dominate the real estate industry in 2023.
Automation Is A King
According to a 2023 survey conducted by Statista among experts in the United States, automation was regarded as one of the “most potent disrupters in the real estate industry.” The use of automation software in rental property management is becoming the norm because it helps increase turnaround times for screening, leasing, and maintenance services.
All stakeholders benefit from this service. Apart from automated payment and accounting features, top property management software now adopts automated features such as utility tracking, email reminder system, CRM workflow, and mobile inspection, to mention a few.
Evidence-Based Decisions
Proptech service providers are now turning the data they gather into tools and insights to help property managers and their customers make evidence-based decisions. Listing histories, rent analysis, transaction records, pricing trends, and market comparisons are just a few examples of the valuable data points that are being leveraged.
Through these data points, property managers can make good decisions on rental pricing, property investments, marketing strategies, and overall portfolio management.
Customization
Several personal factors that evolve from time to time influence customers’ needs. Offering personalized experiences with proptech products and services means constantly monitoring trends and innovating accordingly. For example, do you have solutions for customers that want to buy a home within a week or a month? Those customers prefer speed in real estate software development services. Others might choose based on luxury or minimalism. In short, there should be solutions for every customer.
Virtual Reality (VR)
For immersive experiences and better business results, realtors continue to rely on VR tools to refine their marketing tactics. In 2023, virtual tours of homes through 3D models will continue to improve with advancements in 3D scanning technology and virtual reality. In addition, selling residential and commercial properties during the construction phase will also remarkably become effortless for developers, thanks to advancements in architectural visualization.
Big Data and AI
Proptech companies can not afford to be left behind in the global race by tech companies to utilize big data and integrate artificial intelligence (AI) into their product offerings. From property investment to property management and tenant experience, proptech firms can leverage AI tools to automate processes, optimize resource allocation, and deliver customized experiences for investors, property owners, and tenants.
Two significant trends to watch out for in this area are:
- Real estate brokerages powered by AI chatbots
- Enhanced search and underwriting solutions via generative AI that can analyze extensive customer data and listing preferences.
Fractional investing
We are in a time in history when co-investing in real estate properties has become more accessible to retail investors. You don’t need thousands of dollars to be a real estate investor. Through the fractional ownership model of Proptech startups springing up today, your $20 can be put to work and attract passive income. A few of these proptech startups that are eliminating the historical investment barriers include Fractional, LEX, Fundrise, Groundfloor, Here, and RealtyMogul.
Seamless Communication
Effective communication is the foundation of building trust in business relationships. Like any other industry, the proptech industry thrives on enabling transparent and reliable communication channels. If owning a property is a dream come true for many, the buying process must not be short of efficient and seamless communication at every step. From the first contact to negotiations, contracts, and post-purchase service, a smooth and timely flow of information is indispensable.
The significant developments in providing seamless communication are:
Virtual customer service tools: Eg. chatbots, live chat, or video conferencing
Virtual inspection tools: Eg. 3D virtual tours or augmented reality (AR) APIs.
Increasing Digitization
The first-time home buyer market is largely driven by Gen Z and Millennials, who prioritize digital experiences when making purchases. As a result, proptech companies can no longer rely solely on traditional, offline methods for property listings and showcasing marketing efforts and transactions. Instead, they must embrace modern fintech solutions and digital payment platforms to cater to customers who prefer convenient and secure online payment options.
Summary
These are the current proptech trends shaping how properties are bought, sold, and managed across the world. But, implementing each of them is subject to demographic demands. That’s why proptech startups targeting local areas have many opportunities to unlock for investors, real estate agents, buyers, sellers, and other stakeholders in the value chain. The market is not just for Zillow and the like.
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