The real estate industry is a huge sector in almost every economy, but despite the huge scale, it has been slow to turn to technology, when compared to other industries. These technologies may not be so novel any more but the late adoption rate by the real estate industry and the recent emergence of newer innovative ideas indicate a more commercial use of these technologies in the real estate industry. Even though the technology adoption by the industry lags the technology development significantly, the appetite for more tech infusion in the industry is increasing as a result of the benefits experienced so far. Some of the technologies that the real estate industry has adopted are discussed in this section.
Artificial Intelligence
According to the Global proptech Time 2019 survey conducted by HexGn, close to 53% of the respondents felt that Artificial Intelligence would create ripples in the real estate industry in the next five years. Application based on AI had started percolating into the various niches of real estate. Online virtual assistance and energy management are two of the most common applications of it which many are aware of, however, it is only a fraction of the many areas where AI is being used. The next five years remain crucial as the industry incumbents realize the importance of the technology and are in the pursuit of setting up the foundation to expand their businesses with the help of automation. Big Data, which has already found commercial use in the industry, is slowly turning to be the fuel that fires up technologies like artificial learning and machine learning. The availability and the analytics of large databases is helping developers decide the best locations for their property, find potential customers based on preferences, improve the quality of investment decisions, and much more. Currently, most of the real estate companies adopting big data are focused on setting up their tools and means to collect the data and in the next five years will be seen putting efficient mechanisms in place for optimizing this data.
Apart from energy management and virtual assistance, AI applications are being developed in other facets of real estate as well. In Architecture & Design, Norway based Spacemaker AI uses artificial intelligence to generate and explore billions of site proposals, sort out the best ones and report statistics about each of them. This helps designers choose the optimal building layout to best fit the design and regulatory parameters. In the Construction segment, companies such as HoloBuilder has developed a reality progress capturing solutions, which helps project managers to automatically sort, tag and present site progress based on images captured. Facility Management has seen startups such as Shepherd Network that use AI to preempt services disruptions and avoid downtime.
Marketplaces have started deploying AI to manage risks and reduce deal finalization time. Brazil based ZeroDistrato employs predictive and preventive AI algorithms to analyze and combat cancellation of real estate purchase contracts. US based HipPocket is developing machine learning solutions to create platforms that reduces search and sales time by matching buyers to more relevant properties. Investors and Lenders can also harness the power of AI in their business. Land parcels can be analyzed even to the extent of buildable and leasable floor space within hours thus helping in making critical go-no-go decisions. US based Airworks is developing their tool for this. Companies such as Cape Analytics is using Ai along with geospatial imagery to provide building intelligence.
Robotics
Robots have been deployed in areas, within several markets, that deal with repetitive tasks especially those that do not need any human- specific skills. Within the real estate industry, robotic applications have been hailed as a much-needed solution in construction, ideally in functionality that requires a human worker to be around potential hazards. The industry is slowly exploring the use of robotics in property & facility management with humanoids and other robots taking over, capable of interacting with potential customers without the need of any human intervention from the part of the service provider, for examples, use of robots for open house showing can help agents focus on other productive areas or help cater to multiple clients at the same time. As part of the Global Proptech Time 2019 survey, more than 47% of the respondents felt that robotics holds a high potential in changing the face of the real estate in the next five years. Delving deeper into responses from lifecycle segments reveal that Asset Managers are more bullish than Construction Managers about the use of robotics in real estate. Surprisingly only 43% of the Developers feel that robotics may find its way in shaping the future of real estate. It will not be long before that industry realizes that repetitive, manual work is not the best use of knowledgeable staff members. With Robotics, they can automate their processes and move on to other activities that best utilizes the human mind. Robotics applications are being developed in areas other than construction. Property Meld, based in US has developed a tool that automates the building maintenance process. Neozeka is a Japan based company working on automated property valuation, asset management, and valuation process management.
As a step towards being ready for robotics solution, real estate firms must carry out a detailed scrutinization of their current workflows. The existing processes may require elimination of redundant tasks, raising the productivity of necessary activities, reducing the focus on good-to-do practices, and creating new workflows to handle new risks. This where the human mind is best used – process design. Firms must also focus on career shifts of the future and how human employee would work in or alongside a robotic process. Imparting key skills to human employees to manage this future state is something senior management should start focusing almost immediately.
New Building Materials & 3D Printing
The spotlight within construction technology, apart from innovative machinery, has been more on modifying incumbent construction materials. 53% of the Global Proptech Time 2019 Survey respondents felt that in the coming five years, construction technology will see a rise in the number of innovative building materials used. These new materials not only help with sustainability but also in enhancing the design and structural stability of the building. Slabs that reduce the weight of the overall structure, structures made through 3D printing, or materials with excellent acoustic and aesthetic properties are some of the examples. Startups and companies focusing on bringing such innovative materials to the forefront will hopefully see a rise in the coming years, with accessibility to the products made easy for construction companies all over the world.
Argentian based Arqlite makes light artificial gravel for use in precast concrete companies and landscapes. The material is greener, cheaper, and it insulates almost ten times better and weighs almost one-third of regular stone gravel. Chinese startup Cui Ying Chemical develops photochromic materials that can be used in the production of colour-changing façade. Sustainability needs has sparked the path for novel green materials. Companies such as Alucid based in the UK focus on energy efficient construction units from recycled materials.
3D printing has helped industries such as manufacturing in bringing down the costs and the production time considerably. In the real estate segment too, this particular technology has been hailed for improving the construction process by reducing the labor costs and the shortening the timeline for creating a real estate property. Currently, one of the areas where 3D printing is being applied mostly is the architecture and design segment with designers using the technology to create 3D models of their proposed designs, making the process faster and more efficient. 3D printing is also being used in actual construction. Branch Technology, a US based company, is a tech startup engaged in the development of cellular fabrication technologies and uses both geometry and robotic motion to construct complex geometries in open space, without the use of support materials or highly- controlled build environments. According to the survey results, 45% of the respondents feel that this technology will disrupt the real estate game in the coming years.
Blockchain
Blockchain applications are one of the recent entrants into the real estate world which 46% of Global Proptech Time 2019 Survey respondents feel will have a positive impact in the real estate industry in the coming years. Blockchain-based financial services have made it easier to maintain records of the transactions. The scope for better lending facilities with the help of blockchain is an important upcoming trend within the industry. This technology has seen a favorable response till date as more and more real estate incumbents opt for transparency in real estate transactions. The coming years can be expected to be pivotal as existing blockchain-based services get stronger and more importantly, become widespread.
Investment & Lending forms the entry point of blockchain to the real estate industry. The RealBlocks platform leverages blockchain for real estate capital markets, by allowing global capital raising through issuance of tokenized securities and by providing opportunities for post-issuance liquidity. BitRent, a UK based blockchain platform, aims to attract investments for commercial and residential property at an early stage of construction. FundPlaces is another online platform for investing bite sized amounts in unique real estate opportunities through real estate backed crypto assets.
The real estate marketplace is being revolutionised by companies such as MERGED that uses blockchain to create a multi-sided platform ecosystem that focusses on efficiency, trust, and transparency of transactions. It allows participants to communicate effectively, collaborate on tasks, adhere to best practices and drive efficiency across the process. Australia based Propify enables real estate search solution via the blockchain. The technology has even entered the shared economy segment with Singapore based PopulStay that decentralizes the function of booking and offers an autonomous property management platform for the home sharing economy.
While Drones, IoT and AR/ VR has started to find use in real estate, these technologies are rightly poised to significantly impact the industry in the next five years.
AR & VR
Real estate businesses have seen a boost in the business with the help of immersive technologies. Using technologies like augmented and virtual reality, sales and marketing processes are witnessing a leap in the number of sales and the appeal of the business. 47% of the Global Proptech Time 2019 Survey respondents’ views conform to the idea that these technologies will have a more rampant effect on the real estate industry in the next five years. The hardware and software required to add AR and VR to augment real estate business is already quite accessible and affordable, thanks to the wide segment of service providers in this space. The coming years will see more companies setting up their digital infrastructure to AR and VR services to their consumers.
Drones
50% of the Global Proptech Time 2019 Survey respondents leaned towards the view that drones will impact the real estate industry highly in the next five years. Drone tech has become a hot and fiery niche of technology because of the sheer convenience it is offering in the completion and enhancement of tasks. It is forecasted to bring out safety risks on construction sites by a large rate in the coming years. Aerial imaging is already being used for mapping property and construction sites, with the use being concentrated in only a handful of regions. The uneven concentration could be due to a variety of reasons – lack of capital, no access to services providers, or stringent rules regarding the use of drones.
IoT & Sensors
The number of players involved in connectivity in real estate are growing. IoT & sensors is the primary tool that these companies are leveraging to offer these services, which according to 52% of the Global Proptech Time 2019 Survey respondents, will be a technology whose involvement in real estate will be seen in more avenues than before in the next five years. As the issue of climate change looms over everyone’s heads, IoT and sensor technologies have taken center stage when it comes to providing solutions for energy efficiency apart from those of connectivity. The concept of smart buildings has garnered a lot of attention globally but the same has not translated into it being adopted at the same rate. Real estate incumbents will be seen going the extra mile to transform buildings into well-connected units with excellent energy efficiency features. The growth of RPA within real estate may end up creating facility and property management segments completely running on IoT, sensors and artificial intelligence for predictive maintenance.