The PropTech Breakthrough and Its Role in Real Estate

Real estate is the world's largest asset class, so it’s not surprising that it offers ample opportunity for institutional investors and individuals who want to take advantage of it. The global real estate market size exceeded the mark of $7 billion in 2022 and is expected to grow to $ 7,954 billion by 2028, exhibiting a CAGR of 1.8% during 2023-2028. Rapid urbanization is one of the critical factors of the real estate market growth. The rising population, along with the rapid infrastructural development and shift in consumer preferences towards a clean, safe and reliable environment, are driving market growth and fueling various technological advancements.

Source: https://businessday.ng/

Proptech, or property technology, is one of the newest real estate trends. This technology disrupts the way people buy, sell, research, market, and manage a property and is considered the innovation driver of the market, relieving real estate professionals of the paperwork and offering a highly profitable asset class for investors looking for new opportunities. In our research, we’ll consider property technology types, proptech pros and cons, and how technologies change the real estate industry. We’ll also look at the proptech big data, the newest technology trends and tech startups shaping the modern real estate industry. Read on to learn more about the innovations building the world today.

What is PropTech?

Property technology can be defined as the usage of technology and software to help individuals and companies research, buy, manage, and sell real estate. The primary goal of proptech is to make everything about leasing, owning, or working inside the building easier and more efficient. It can be anything from reducing property management paperwork to streamlining transactions between tenants and landlords. Similar to how fintech focuses on the use of technology in the finance industry or edtech use technology tools in education, proptech uses digital innovation to address the needs of the property industry, creating new solutions and shifting approach towards tech- and online-based operations.

Proptech can come in many shapes and forms, from AI-powered home automation systems to marketplaces connecting agents with buyers, landlords with tenants, or investors with properties. To date, proptech companies are transforming the global real estate industry with smart hardware, high-tech services, smartphone applications, and cloud-based software platforms.

Key segments of the proptech market

Proptech often overlaps with two other sectors - fintech and contech. FinTech or financial technology is often called “PropTech’s older brother” and incorporates everything related to using innovative digital technologies to provide financial services. As for ConTech, it is short for the construction technology sector and is considered the innovative way to plan, design, and build structures, as well as manufacture and installation of their components. ConTech includes tools like 3D printing and aerial mapping with drones and is often used in conjunction with PropTech.

The PropTech industry consists of three primary verticals:

• Smart Real Estate (Smart Home). This segment includes digital platforms that optimize the operations and management of real estate assets in smart homes. It can consist of security surveillance systems, smart thermostats, or smart light bulbs that can be turned on and off with a smartphone app or digital assistant.
• Sharing real estate. This technology includes platforms that facilitate using real estate assets such as offices, land, storage, and apartments. These Proptech platforms provide users with information about available real estate or directly manage transactions and operations.
• Real estate fintech. These technology-based platforms facilitate trading real estate assets. FinTech apps may provide information for prospective buyers and sellers or directly facilitate asset leases or ownership transactions, significantly reducing the paperwork associated with purchase approval.

The real estate sector is broad, and the above proptech segments are only the main pillars of the proptech industry. The property technology solutions can be further divided into smaller groups that collide and intersect with each other.

To date, the primary goal of PropTech is to innovate and optimize the real estate industry through technology, minimizing the costs associated with real estate transactions, maximizing efficiency, personalizing property management, and saving time for users. For the moment, key players in the PropTech market include:

• Airbnb;
• Locale;
• Ucommune;
• OYO;
• Compass;
• Lianjia;
• Houzz;
• Ziroom.

PropTech as a Disruption Power of Modern Real Estate

PropTech Sectors

Source: https://propj.com.au

With the growth of technology-enabled innovations, the real estate industry is currently undergoing an impressive digital transformation that is changing the nature of the market, work and office environment and influencing real estate growth. Such innovations are driving companies to adopt and invest in proptech solutions, allowing them to simplify company processes, increase efficiency, save costs, improve communication and collaboration, and enhance customer experience.

Proptech disruption has brought innovation into the workflow of almost every player in the real estate market, including brokers, landlords, tenants, letting agents, and investors. Property technology is considered the leading catalyst for transforming business activities and cultures. Proptech-based solutions like property and facility management, indoor mapping, automating leasing, IoT at work and home, real-time data, BIM technologies, data analytics, and smart buildings can significantly benefit the real estate sector, creating an eco-system approach to optimize processes for quality and agility and efficiently manage information.

There are several ways in which proptech can benefit the real estate industry. Proptech tools can help millions of landlords, buyers, sellers, and tenants improve property journeys. Let’s examine what advantages proptech solutions can bring to each party involved.

Source: https://ascendixtech.com/

PropTech benefits for landlords and tenants

For landlords and tenants, proptech solutions can bring the following benefits:

• Detailed information 24/7. Networks of smart devices and sensors can provide property owners with detailed insights into how tenants utilize the space, freeing them from needing to check their property personally. With proptech, landlords can check all the required information on the go from the screen of their smartphone.
• No geographical boundaries. Virtual reality proptech tools eliminate geographical limitations, enabling property owners and tenants to conduct home inspections, house tours, and viewings from the comfort of their homes.
• Better communication. Proptech offers quality communication with tenants, maintenance teams, repair workers, and other parties involved. Many proptech platforms provide access to documentation and claim reporting forms, allowing property managers to leave relevant information about the property on a whiteboard and enabling owners to respond directly to tenant requests, leading to fewer misunderstandings and faster response times.

PropTech benefits for investors

• Better market research. Proptech tools allow investors to track the leasing, buying, selling, and investment opportunities. It enables investors to make data-driven decisions and stay ahead of market trends, ultimately increasing their chances of success in the real estate industry.
• Accurate construction planning. Using advanced construction management software and predictive analytics, project managers can optimize the construction process and proactively identify potential issues before they occur, minimizing risks and ensuring the timely completion of projects.
• Secure contracts. Proptech allows investors to secure contracts directly with relevant parties involved in the property purchase and sale process. It can help ensure that investors’ interests are aligned and that no middlemen who may have misaligned or conflicting interests are involved. It also provides greater transparency and accountability throughout the contract negotiation and execution process, allowing investors to monitor progress and ensure all parties involved fulfill their obligations.

PropTech benefits for brokers

• Automation of paperwork. With paperwork automation, you can streamline the back-office processes and save time and resources for more critical tasks like market research, closing deals, and customer communication.
• Secure remote transactions. Proptech solutions offer a faster and easier buying experience by minimizing the amount of paper to read and sign.
• AI-driven marketing. Proptech provides AI-driven marketing and easier data collection for testing and evaluating the investment, development, buying, selling, and leasing processes. Moreover, proptech big data analytics tools offer structuring and documentation of large data sets.
• Direct digital engagement. Proptech contactless solutions like facial & touch recognition aim to limit physical interactions with both high-use surfaces and people alike. Since the onset of Covid-19, these tools have become the new normal in the digital world.

Proptech Market Overview

The property technology sector is relatively new, as it emerged in the late 1990s, although over the last few years, it has quickly turned into a breakthrough in the real estate world. Proptech solutions are now used in over 64 countries worldwide, and more than 10,000 proptech companies are currently in the market.

Number of proptech companies launched worldwide between 2008-2022 by region

The global proptech market size was valued at $25,145.1 million in 2021 and is projected to expand at a CAGR of 16.8% in 2022 - 2030. For the moment, the United States holds the largest share of proptech companies (59.7%), followed by Europe (27.2%) and Asia (3.5%). The biggest PropTech markets are primarily focused on residential proptech real estate. The United States accounts for 60.04%, and Europe accounts for 55.14%. Such a breakdown is likely driven by the growing population, with most people spending money on buying, renting, and living in homes. Besides this, the prevalence of residential proptech solutions in the two biggest markets is also driven by investing purposes. Unlike commercial real estate, residential real estate gives higher returns and doesn’t require significant startup capital.

As for business type breakdown, the US and European Proptech markets are dominated by B2B services with 69.37% and 60.14% share, respectively.

The proptech market growth is expected to be driven by the increasing adoption of innovative technologies like artificial intelligence (AI), machine learning (ML), the Internet of Things (IoT), and virtual reality (VR) across the industry. Adopting these cutting-edge technologies streamlines data management and significantly simplifies large-scale asset management operations. The AI implementation within the real estate industry also has the potential to enhance advertising strategies by identifying trends and providing actionable insights to clients and customers.

The adoption of PropTech solutions keeps growing and is projected to remain high in the post-COVID era, given the numerous benefits this technology provides businesses. According to recent findings, 80% of companies adopting PropTech have experienced favorable outcomes in their operations and services, while 70% have reported improvements in their decision-making abilities and financial performance.

The Main Types of PropTech

Phase: Search

Phase: Supervise

Phase: Sell

Proptech: Pros, Cons, and Challenges

Value of investment into proptech companies worldwide (in billion US dollars)

Source: https://www.statista.com/

We’ve already mentioned the numerous benefits proptech offers for all parties involved in real estate. Let’s take a closer look at the main ones.

• Time saving. PropTech eliminates paperwork hassle, simplifies processes, and enhances the overall efficiency of all aspects related to real estate.
• Cost saving. PropTech solutions offer improved efficiency and automation, providing valuable insights and generating a significant ROI.
• Increased value. Proptech enables the creation of smart, healthy, and sustainable buildings, resulting in higher rental rates from tenants and customers.
• Reduced downtime. Proptech software allows predicting when an appliance is about to malfunction, reducing downtime and ensuring any problems are quickly resolved.
• Improved communication. Property technology solutions offer better communication between tenants and landlords, leading to fewer misunderstandings and faster answers.
• Better promotion. Proptech provides advanced tools to target potential customers more accurately and effectively. Also, the ability to analyze vast amounts of data can help tailor marketing strategies to specific customer preferences and behavior patterns.
• Improved energy efficiency. By making buildings more energy efficient and sustainable, proptech can reduce their global energy consumption, which is currently 40%.
• Increased transparency. With new technologies like blockchain and big data, proptech can ensure that all stakeholders have access to data and transparency in every aspect of a transaction.

While Proptech offers numerous benefits, there are also some potential drawbacks. One of them is the risk of cybersecurity threats and data breaches, which can compromise sensitive information. Additionally, implementing proptech may require significant financial investment and pose a challenge for smaller businesses with limited resources.

There are also some proptech challenges to consider:

• Integration with existing systems. Integrating new proptech solutions with legacy systems can be complex and require significant effort and investment.
• Resistance to change. Some real estate professionals may resist adopting new technologies, which can slow proptech adoption.
• Limited interoperability. Lack of standardization and limited interoperability between different proptech solutions can make it difficult for companies to integrate and utilize multiple systems.
• High cost. Implementing proptech solutions can be expensive, which may be a challenge for smaller businesses with limited resources.

Real Estate Technology Trends

Today, the value of the property is not defined solely by the space and its location but by the blend of real estate information technology and superior tenant/buyer experience (Deloitte).

To date, technology keeps changing the way real estate functions. The integration of virtual and augmented reality technologies in the real estate environment can provide an immersive experience for potential buyers, while the digitization of real estate transactions can simplify and streamline the process significantly, making it more transparent and reducing the risk of fraud. Using cutting-edge technologies like blockchain, AI, and IoT in real estate is expected to keep growing, improving decision-making and market predictions. In this paragraph, we’ve collected the main trends shaping the proptech market in 2023. Let’s take a look at them.

• Artificial intelligence. AI algorithms in proptech are used to analyze large datasets and produce accurate and reliable estimates. Also, AI-powered property management systems can automatically analyze data from various sources, including sensors, IoT devices, and tenant feedback, to identify issues that require attention and take proactive steps to resolve them. Additionally, AI-powered chatbots and virtual assistants can handle customer inquiries, provide property information, and even schedule property tours, reducing the workload for real estate agents and improving customer satisfaction.
• Virtual reality. VR in proptech is revolutionizing the way properties are viewed and marketed. With this technology, prospective buyers can take virtual tours of properties from anywhere in the world, enabling them to make more informed decisions. Additionally, VR is being used to enhance the design and construction process, allowing architects and developers to create and test virtual models of buildings and spaces before they are built.
• Cloud computing and SaaS. With cloud-based solutions, real estate companies can access powerful software tools without needing on-premise servers or expensive hardware. At the same time, SaaS platforms offer subscription-based access to a range of software tools, providing flexibility and cost-effectiveness for real estate professionals.
• Robotic Process Automation (RPA). RPA is an emerging trend in proptech that is helping to automate repetitive and time-consuming tasks. RPA software can be programmed to perform tasks such as data entry, document processing, and report generation, reducing the workload for real estate professionals and improving productivity. It also enhances customer service by automating customer inquiries and support requests.
• Blockchain. With blockchain technology, property transactions can be recorded and verified securely and transparently, reducing the need for intermediaries and minimizing the risk of fraud. Blockchain is also used to streamline property management and maintenance by providing a secure and tamper-proof maintenance and repair history record.
• Data Analytics. By leveraging data from various sources, including market, property, and tenant data, real estate professionals can gain valuable insights into market trends, property values, and tenant preferences. It allows them to make more informed decisions regarding property investments, management, and marketing, improving ROI and increasing customer satisfaction.
• Internet of Things. With IoT devices, real estate professionals can monitor and control various systems in buildings, including HVAC, lighting, and security, in real time, improving energy efficiency and reducing maintenance costs. IoT sensors can also provide valuable data on building occupancy and usage patterns, allowing real estate professionals to make informed decisions regarding space utilization and tenant experience.
• Green Building Technology. With green building technology, buildings are designed to be more energy-efficient, using sustainable materials and incorporating renewable energy sources. It results in lower operating costs, improved sustainability, and increased tenant satisfaction, ultimately leading to a more attractive ROI for property owners.

The utilization of technology has significantly transformed the real estate sector, streamlining processes, enhancing communication, and elevating transparency. From time and cost saving to improved data analysis and enhanced communication, PropTech makes the real estate experience better for all.

Revolutionary Real Estate Tech Startups

To date, the number of real estate tech startups keeps increasing, with a record 300% growth over the past decade. Each of these proptech solutions is aimed to reduce the amount of paperwork for all parties involved in the real estate business and maximally ease the hassle of property management, listing search, and construction planning.

Number of proptech companies founded in Europe between 2010-2022

Source: https://ascendixtech.com/

Currently, there is a wide variety of PropTech startup categories, so we’ll highlight the 5 main types of proptech-based solutions with key players in each sector.

Key Types of Property Technology Solutions

Tools for Real Estate Agents

These proptech solutions are designed to help real estate agents manage their workflow and streamline their processes. Real estate agent tools typically include the following features:

• Lead management;
• Marketing automation;
• Transaction management;
• Client communication.

Real estate agents can use these tools to manage their listings, track sales, and communicate more efficiently with clients.

Examples of real estate agent tools include:

• BoomTown. This platform offers lead generation, marketing automation, and transaction management tools.
• Top Producer. The solution offers a customizable CRM for agents to keep track of their clients and tools for marketing automation and transaction management.

Rentals & Sales Tools

Rental and sales technology solutions are built to help property managers and landlords manage their rental properties more efficiently. These tools include the following features:

• Tenant screening;
• Rent collection;
• Lease management.

Among the examples of these proptech tools are:

• Cozy. The solution offers online rent collection, tenant screening, and lease management features.
• Buildium. This software gives users a comprehensive suite of property management tools, including rent collection, tenant screening, and maintenance management.

Real Estate Search

Real estate search technology solutions are intended to help buyers find properties that match their specific needs and preferences. These proptech tools use advanced algorithms to match buyers with properties that meet their criteria, including location, features, and price.

Examples of real estate search tools include:

• Zillow.
• Redfin.
• Realtor.com

All these solutions offer advanced search capabilities, property information, and user reviews.

Construction Management

Proptech-based construction management solutions help construction companies manage their projects more efficiently. Construction management tools include project management features such as scheduling, budgeting, and resource allocation. The tools allow construction managers to track progress, manage budgets, and collaborate with their teams more effectively. Examples of construction management solutions include:

• Procore. The software consists of project management, budget tracking, and document management features.
• PlanGrid. This solution gives users mobile access to project plans, issue tracking, and photo management.

Facility Management

Facility management proptech solutions allow facility managers to manage their buildings more efficiently. Among these tools usually are:

• Maintenance scheduling;
• Equipment tracking;
• Work order management.

With these proptech tools, facilities managers can reduce maintenance costs, improve building efficiency, and enhance tenant satisfaction. Examples of facility management solutions include:

• IBM TRIRIGA. The software provides users with integrated workplace management features.
• ServiceNow offers a comprehensive suite of facilities management tools, including asset, maintenance, and space management.

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Brocoders' Experience in Real Estate Technology

Eight out of ten companies implementing proptech solutions experience improvements in their operations and provide better quality services to their customers. To keep up with the ongoing real estate digitization, developing your digital capabilities and incorporating new innovative approaches is critical. However, it might not be a simple task, especially if you don’t have previous experience in tech. We’re here to help you achieve this and bring innovation and technology to your business.

Brocoders is a custom software development company specializing in creating innovative and high-quality software solutions for businesses of all sizes. We have been in the industry for over eight years and have built a reputation for delivering exceptional services to our clients. With 87 top specialists on board and 85+ projects done, we are happy to assist you with the following services:

• Custom Software Development. We offer custom software development services tailored to meet our clients' specific needs. Our team of experienced developers can create software solutions for various industries, including healthcare, fintech, proptech, e-commerce, and more.
• Web Development. Our web development services cover everything from website design and development to content management and e-commerce solutions.
• Mobile App Development. We specialize in building mobile apps for iOS and Android platforms and follow a comprehensive development process that includes concept design, wireframing, prototyping, development, and testing.
• UX/UI Design. Brocoders' team of UX/UI designers can create beautiful and functional interfaces for web and mobile applications. We focus on developing user-centric designs that are intuitive, engaging, and easy to use.
• Product Development. We can help businesses transform their ideas into successful products by providing end-to-end product development services. From ideation to launch, Brocoders can help clients every step of the way.

We have three successful real estate projects done and are ready to assist you with cutting-edge proptech solutions for your business. Let’s take a quick look at our finished proptech projects.

CondoGenie

Brocoders recently completed a successful project for CondoGenie, a condominium management platform. The project’s goal was to create a comprehensive and user-friendly platform that would streamline the management of condominiums, making it easier for property managers to handle day-to-day tasks, communicate with residents, and track finances.

The CondoGenie platform built by Brocoders offers a range of features, including:

• Digital notice board;
• Online payment options;
• Resident directories;
• Work order management;
• Financial reporting.

The platform also offers a mobile application, enabling residents to access information and services from anywhere, anytime.

As a result of the project, CondoGenie was able to significantly improve its services and enhance its overall customer experience. Property managers can now easily manage day-to-day tasks, communicate with residents in real-time, and track financial transactions from one platform. Additionally, residents can now make payments online, view upcoming events and notices, and request maintenance or repairs through the mobile app.

By successfully delivering a comprehensive and user-friendly platform, Brocoders has made condominium management easier and more efficient for property managers and residents, improving the overall customer experience.

C.I.A Services

Another Brocoders’ proptech project was for a Homeowners Association (HOA) management application. This project aimed to create a platform that would automate manual processes, enhance communication between HOA members, and provide real-time financial tracking and reporting.

To bring new experiences to property owners and residents and ease the workload on employees, we developed an app with an intuitive design available on desktop and mobile devices. The HOA management application built by Brocoders offers a range of features, including:

• Centralized database of residents;
• Automated payment processing;
• Event management;
• Maintenance request tracking;
• Financial reporting.

A mobile application enables residents to view upcoming events, make payments, and submit requests for maintenance or repairs, automating manual processes, eliminating the need for paperwork, and reducing errors. Additionally, the financial tracking and reporting features have enabled the HOA to have better transparency and accountability in its financial operations.

I am very excited and thankful for the accomplished work. It was great to work with a so professional and well-organized team. All tasks were delivered on time and were well-tested by QA specialists and our users

The platform has made HOA management easier, more efficient, and more transparent, improving the efficiency of the HOA management team and enhancing customer experience.

Shineup

In addition to these projects Shineup, Brocoders has also developed web-based software for a proptech company. We've defined the system architecture, created flow charts, designed the UI/UX, built the front- and backend, and implemented ML features. We have delivered the software and its final system specification on time and within budget, earning a 5.0-star review on Clutch and good reviews from our clients:

They constantly follow up with us and ensure good communication, enabling them to finish the development quickly

At Brocoders, we specialize in ensuring that your Proptech platforms and mobile and web applications are optimized for success. Our expert team will handle the technical details, so you can focus on your core business activities and stay ahead of the competition. Get in touch with us to discover how we can assist you in taking your Real Estate business to new heights. Let's work together to make your business stand out in the industry.

Final Thoughts

Proptech is a rapidly growing industry that is transforming real estate by leveraging innovative technologies such as AI, VR, cloud computing, RPA, blockchain, data analytics, IoT, and green building technology. These technologies offer a range of benefits for everyone involved in real estate, from property owners and managers to tenants and buyers.

Proptech is expected to show strong growth in the coming years, mainly due to the growing demand for real estate solutions that are more efficient, sustainable and customer-focused. As the industry continues to evolve, we can expect significant changes in how real estate is managed, marketed, and sold. From virtual property tours and automated property management to blockchain-based transactions and data-driven decision-making, proptech is revolutionizing every aspect of the real estate industry and paving the way for a more transparent, accessible, and sustainable future.