From virtual reality to artificial intelligence, technology is permeating almost every aspect of real estate.
Proptech combines ‘property’ with ‘technology,’ which can encompass anything from energy-efficient smart buildings that use intelligent sensors for heating and lighting to virtual reality (VR) property tours and artificial intelligence (AI) chatbots. It also spans the gamut from residential and commercial real estate to home design and property management.
While proptech is a catch-all term for a lot of different technologies, one thing is certain: technology is impacting the real estate industry. Global proptech investment was projected to reach a record US$6.3 billion in 2019, according to CB Insights.
But the rise of proptech doesn’t mean the end of real estate professionals.
“Agents should not fear that technology will replace them. Instead, they should embrace it and use it to their competitive advantage,” says Adrian Fisher, CEO and founder of real estate technology software PropertySimple, in an article for Real Estate Hacks.
For example, proptech can be used to sell homes that don’t yet exist. Through augmented and virtual reality, clients can go on a virtual property tour of a pre-construction condo or townhouse. While a presentation centre allows them to physically walk through a model home, virtual reality allows them to experience the different types of units available—even different views from different floors—as well as modifications and upgrades.
VR can also be a useful tool for real estate professionals who have remote prospects or want to show a client multiple properties at once. Most clients will still want to walk through a property in-person before putting in an offer or handing over a down payment, but virtual tours can help them decide which properties they’re most interested in. REALTOR.ca offers 10 virtual tour providers including, Vimeo, Matterport, iStaging, ImageMaker360 and iGUIDE.
We’re excited to welcome @iStaging, ImageMaker360 and @PropPanINC as virtual tour providers for @REALTORdotca listings.— CREA | ACI (@CREA_ACI) July 20, 2019
Input your virtual tour URLs in the “video tour” field (NDS field number 64) to help make your listings ✨. pic.twitter.com/ugUVNJK6pW
Drones are another technology shaking up the real estate industry with their ability to capture high-quality aerial photography and videos at a reasonable price point—handy for marketing new listings. This can be particularly useful for helping clients visualize the view from a pre-construction condo or providing an aerial view of the grounds or neighbourhood of a listing.
Proptech isn’t just for marketing, though. It can also be used to help real estate professionals better manage their business, such as analyzing big data. Most industries deal with reams and reams of data; making sense of it, however, can be time-consuming and tedious.
That’s where analytics plays a role. Analyzing big data can help real estate professionals make more accurate appraisals (using geographic, economic and demographic data), spot housing trends and even target their marketing efforts toward the right clientele.
The MLS® Home Price Index (HPI) is the most advanced and accurate tool to help REALTORS® gauge a neighbourhood’s home price levels and trends.
With the MLS® HPI you can accurately analyze home price trends from the national level all the way down to a local neighbourhood. It gives you the insights you need to validate or revise your pricing recommendations, anticipate market changes and compare home prices.
There are currently 18 real estate boards participating in the MLS® HPI, representing 65% of all Canadian resale housing activity, based on the 10-year average of annual sales from 2009-2018.
For MLS® HPI training resources, visit the CREA Training Hub.
When it comes to proptech, analytics is probably the most important piece for real estate professionals, according to Eugene Bomba, partner with PwC Canada’s Technology Sector. He doesn’t believe proptech will replace real estate professionals; rather, it will complement their services. “I think there’s an evolution similar to robo-advisors in fintech where the data still could use interpretation,” he says.
In other words, prospective clients are still looking for a human touch, and real estate professionals can use analytics to provide added value to their clients, such as concierge services, “which I think is a real opportunity for brokers,” he says.
There’s a lot of data out there, from professional commentary to industry reports. What real estate professionals need is a data strategy—that might mean looking for proptech solutions already available on the market, upskilling staff, working with a consultant or even hiring tech talent.
“The need for upskilling labour is at a high—on the broker side it may mean hiring a couple of people who are on the data science side because there’s tons of data available,” says Bomba. “Analytics are table stakes in today’s world and you have to have your finger on that pulse and not be too shy to jump in.”
Proptech also ties into smart homes, where intelligent sensors can help tenants and owners save money on heating, cooling and lighting. This is becoming increasingly important to home buyers, particularly millennials, and will have a ripple effect on real estate professionals when they’re marketing homes.
Chatbots, which have machine learning capabilities, are another emerging technology that could be particularly useful for customer care, augmenting the services real estate professionals provide. And several AI-based personal assistants are already on the market.
In 2019, REALTOR.ca ran a live chat pilot program with REALTORS® and consumers in Calgary. Results and feedback are being reviewed while we continue to explore more options.
IMRE, for example, was developed specifically for real estate agents and developers, and can respond to basic questions from clients 24/7 over text—say, about the price of a listing or which school district it’s in. It can’t replace the human touch of a REALTOR®, but it can help to qualify leads and collect information on more complex, subjective queries, so a human can follow up.
Consumers are a major driver behind proptech initiatives, and REALTORS® who invest in these technologies could find themselves at a competitive advantage.
“Many proptech leaders note that consumer behavior and sentiment is a driving force behind the innovation. This is because proptech is more than tools, devices and services. It’s a movement that challenges how people think about how the industry operates. Consumers want ease and convenience. They want information that’s easily accessible. Those are things that proptech promises to provide,” says Krista Doyle in an article for Aceable Agent.
Proptech isn’t something to be feared; rather, tools and services are being designed to help real estate professionals do their job more efficiently. And, as PwC notes in its Emerging Trends in Real Estate 2020 report, soon proptech won’t be a novel concept. It will simply be “embedded” in all aspects of real estate.
What’s your favourite piece of proptech? Tell us how it helps your business in the Comments below.