It has been a while since technology ceased to be simply an auxiliary tool designed for specific individual tasks and became an essential element of our day-to-day personal and professional activities. In a short space of time, the union between technology and traditional sectors has transformed the way we communicate in a constantly evolving marketplace, and the real estate sector is no exception. Proptech (property technology or real estate technology) has emerged through a combination of real estate infrastructure, market habits, transactions and technological development.
The term proptech refers to adding a technological component to a business model, resulting in technologically innovative products and new business approaches to the real estate market. This innovation represents the transformation of the industry, and it is predicted that the technological changes will influence consumer mentality, the operation of construction activities and real estate transactions, creating cities of the future. Specialized companies are and will continue to revolutionize the real estate market, making it more digital, in constant growth and with new consumption standards.
All over the world a wide variety of companies are using big data technology to process information; from real estate management platforms to real estate investment companies. The use of proptech gives a competitive advantage to adopters due to its ability to add innovation to every stage of the business process and by rethinking existing systems. Proptech is often designed to streamline and connect processes for participants in all stages of a real estate transaction, including purchasers, sellers, real estate agents, brokers, investors, lenders and landlords. Examples of some of the most common proptech technologies include: virtual reality software that allows website visitors to virtually walk through properties; software for reporting repairs or for splitting rent payments; and platforms for crowdfunding new real estate projects.
The arrival of proptech will shape tomorrow's real estate industry. Below are some of the innovations that proptech brings to the real estate market:
- Artificial intelligence - the use of AI allows, for example, language processing and image recognition for the purposes of scanning purchase and sale documents and importing data into a customer relationship management (CRM) system. It can also help to automate communication between an agent and potential buyers; sending the right message to the right buyer at the right time is essential in creating a productive relationship. Through validation of data, communication automation and workflow within a CRM system, AI frees up agents to dedicate themselves to their clients. It does not end there; multiple home and office appliances and amenities can be automated and managed using AI, a trend that is gaining significant ground in construction and architectural trends.
- Blockchain is probably the technology that has had the greatest impact in the real estate industry, with near limitless potential to revolutionize the way transactions are conducted. Blockchain technology adds transparency to real estate transactions through a simpler and less regulated system.
- Big data allows participants to identify desires, trends, needs and even the interests of users, offering a more personalized experience. Corporations use this technology to make better decisions and strategic moves, adapting their approach to the consumer.
- Geolocation allows users to better analyze locations and explore assets in more detail by offering building data, sales values, and points of interest with some of its features.
- Drones for panoramic photography and virtual reality are one of the main tools for developers and real estate platforms. Augmented reality technology allows buyers to have a close-to-real experience, as if they were virtually transported to the property, in person, even before it is built.
The use of applications based on proptech innovations should, however, be flexible enough to allow local players to adapt them to the specific needs and circumstances of each local real estate market. In the specific case of Portugal, historical city centers are aging and require rehabilitation and urban intervention. There is a significant lack in the supply of modern, sophisticated products able to satisfy the ever-growing needs of the local population, of corporations and of the booming tourism industry.
This is a critical issue that must be addressed if Portugal is to remain competitive in attracting both internal and external investment to its real estate sector.
Considering the difficulty in creating real estate product due to, on the one hand, the scarcity of available land in city centers and, on the other hand, the multiplicity of state regulations over the use of land and new construction, the rehabilitation of historical areas has become a crucial strategy for Portugal. This requires market players to have a strong sense of local tradition and of the natural character of a given city, mainly from architects, engineers, investors and, in general, real estate consultants. The big issue is how to conciliate these two dimensions; the need for implementation of proptech solutions in order to create a supply of modern real estate product and the preservation of the historical architectural and functional traces of these urban environments. All market players must make the effort to enhance local economic activity, while ensuring it does not destroy the historical tradition and legacy of each city.
Market players need to understand that this effort will not only promote a good relationship between new residents, tourists and corporations with the local population, but also protect their own investment on a long-term basis, avoiding conflict with local "anti-bodies," either of a social, economic or political nature. Using proptech to serve people, by increasing real estate efficiency, cost reduction, conservation status, maintenance standards, environmental quality, residential amenities and tourist needs, while respecting each city's history and typical day-to-day life, is an important step towards creating a well-balanced market.
All this can only be achieved by introducing technological solutions, and providing autonomous management capabilities to each property. This would also be necessary for new forms of real estate, such as co-working, co-living, short-term, senior living and new hotel concepts.
In countries like Portugal, where the old cities require rehabilitation, introducing this technology is more demanding and will play an even more relevant role. It is not only a management decision; it is a strategic decision for the future and for the competitiveness of cities. Proptech is no longer a speculative investment it is a smart one.
The future of successful cities and harmonious societies lies in blending modernity and tradition with the help of proptech and its responsible application.
"Proptech is no longer a speculative investment; it is a smart one."
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.