Proptech: the future of property
Recently, the rise of new technologies has led to a revolution in our ways of working. Numerous sectors are flourishing and one result for the property world is: Proptech. But what is Proptech? The contraction of 'Property' and 'Technology' covers all start-ups that provide new technological products or models for property markets. More clearly, these are companies that offer solutions for the property sector by putting the emphasis on digital. From creating software to improving existing solutions, Proptech start-ups are present in various areas.
Recently, the rise of new technologies has led to a revolution in our ways of working. Numerous sectors are flourishing and one result for the property world is: Proptech.
But what is Proptech? The contraction of ‘Property’ and ‘Technology’ covers all start-ups that provide new technological products or models for property markets. More clearly, these are companies that offer solutions for the property sector by putting the emphasis on digital. From creating software to improving existing solutions, Proptech start-ups are present in various areas. This definition is very broad because Proptech encompasses different sectors within a larger market. This ranges from finance (Fintech) to construction (Contech) via Smart Real Estate (intelligent villages and buildings).
One of the major challenges of Proptech is optimising the resources available, whether in terms of time, money or staffing. Offering solutions to automate administrative procedures or to anticipate client needs are, for example, areas being widely studied. Proptech will seek to lower the cost of capital for the investor, reduce the cost of building construction, facilitate administrative procedures for the owner and answer the occupier’s questions. The main objective is to simplify and accelerate processes relating to the property sector.
Investment in Proptech has been enormous in recent years. In 2012, investment in these start-ups was 221 million US Dollars against $6.4bn in 2017. This money was invested in over 800 start-ups and others are just waiting to grow. These investment funds have largely understood that these companies were a gold mine and that they would bring solutions that could be used and profitable immediately. Another important milestone in Proptech history is the first company valued at 1 billion dollars: Compass. This company combining Big Data and property has SoftBank, Fidelity and Goldman Sachs among its investors, making it a heavyweight of the property market. Its lead on data collected gives it a certain advantage over its competitors and enables it to offer personalised offers adapted to its current and future client base.
Among the innovations of Proptech companies, virtual tours have taken an important place. What could become a prerequisite for estate agencies in the future was developed to simplify the work of advisers and clients. The principle is to take 360° photos of the rooms of a property and assemble them. The present technology makes it possible to move through the dwelling and feel as if one were actually visiting the location. Being able to have a 3D pre-visit has much more impact than with 2D photos which do not really enable one to appreciate the layout of rooms, volumes and available space. Furthermore, it offers the estate agent the possibility of exposing the hidden potential of a property to the client (adding/removing a partition, colour combinations, etc.).
