Technology, over time, has aided human interactions and transactions in nearly all walks of life. The pandemic accelerated our dependence on tech even further when face-to-face interaction seemed impossible without technological advancements.
Real Estate Tech Startups Upgrading the Sector in India
As most sectors adapt to the evolving technologies like AI, Blockchain, Robotic Process Automation, and so on, even the Real Estate Sector is welcoming the new change.
The new term ‘PropTech’ essentially streamlines the digital enhancement in conducting real estate investments and transactions.
Incubation of newer technologies to ease out the inefficiencies of the traditional real estate sector is the main goal of real estate tech startups in India.
The reach of proptech not only limits to virtual real estate search and selection but also expands to allied segments like Property Management,
Real-time Investment solutions, Construction Services, Online Rental platforms, Secured Virtual Transactions, and so on.
Here are the 6 key areas that modern technology will change in the real estate sector. Know what will change for you as a Real Estate Stakeholder!
Proptech Revolutionizing 6 Aspects of the Real Estate Sector
1. Real Estate Investment Decisions
The traditional approach towards a real estate investment has been through a trusted local broker with limited information about local real estate deals. This confined the investors to invest within their geographical area only.
Thus, the investment decisions lacked analysis of projected growth and return making investors helpless.
Identifying this gap, tech startups curated online listings of property through websites in the first decade of the 21st century.
The internet boom had just kicked in and the real estate sector tried to leverage the technology for wider reach and more information about real estate properties.
Real estate investors could compare properties and analyze location value that aided in thoughtful investment decisions in real estate.
The first-ever technological advancement in India paved the way for conservative and fearful Indian investors to trust virtual real estate space.
The seeds sown in the early 2000s have built the confidence of Indian markets to purchase properties online.
The fantastic result of the same is 60% of Indian Real Estate Buyers prefer doing their research and exploration through online web portals.
2. Shared Economy and Co-Living Models
The shared economy concept is widely gaining popularity in the real estate segment especially commercial real estate. Co-working office spaces are preferred by many firms which help their employees get the required facilities at low maintenance and low costs.
The shared office spaces are affordable and let companies focus on their core job instead of managing the property lease and legal work. The use of innovative workspace models through the digital network and online payments have optimized flexible rentals and also reduced losses arising due to tenant switching.
The concept of a shared economy in co-living is also kicking in India for the last three years. Co-living is a community shared living with people connecting through profession, employment, or any other ideology. In a co-living space, people share the resources in the apartment and connect amongst themselves at affordable prices.
Technology-driven modern-day designs are the solution for optimizing our resources and Co-living is one of the fruitful outcomes of the same. Along with that, property management apps and automation have caught the attention of the young generation to affordable real estate.
3. Track and Analyse your Real Estate Growth
Every business generates tons of data and to extract such data into meaningful analysis and predict growth requires technologies like Big Data, Artificial Intelligence, and the Internet of Things (IOT).
The same is the case with Real Estate. The dynamicity of the real estate sector is vast and in analyzing such vastness, the technology is providing the much-needed aid to predict property valuations and future cash flows.
Most market-linked investment options like Stock Market and Mutual Funds offer real-time tracking of asset prices and also offer complex information in easy-to-understand analytics for common investors.
To equip real estate with the same feature, proptech companies are building smart applications with the help of programmed Artificial Intelligence and Modeling to make thoughtful insights through filtering data.
4. Secure Real Estate Transactions through Virtual Mode
Real Estate Transactions are heavy-weight transactions and thus people fear engaging in virtual buying and selling of real estate assets.
But to put a different point of view, real estate can be transacted just as we trade stocks and cryptocurrencies virtually. Yes, the technologies used to back other investing options can be used to restructure the way real estate works.
Blockchain technology, which has become the talk of the town with cryptocurrencies, can be used in real estate to make the whole process of buying and selling properties secure, transparent, and immutable.
Through Blockchain, one can enter into a Smart Contract which is validated by all the stakeholders in the real estate transactions.
The connecting of blocks through a unique ‘hash’ code makes it nearly difficult to hack the chain and distort any data. Thus, transactions are safe and thus eliminates any legal complications.
Along with that, the Software As A Service (SAAS) platforms developed by PropTech start-ups allow for smoother and secure digital payments which can be integrated with blockchain technology to store the transaction details.
This will ensure more trusted real estate transactions and aid investors to not limit the capabilities of the real estate sector.
5. Fractional Ownership through Tokenization
Real Estate properties are traded as single assets and hence are low on liquidity. Many young investors are discouraged by blocking a heavy amount in a single asset.
With the modernization of technologies and real estate ideas, the fractional ownership concept has become increasingly popular in India. Assetmonk is one of the pioneering real estate investment companies providing fractional ownership options in real estate through expected IRR in the range of 14 to 21% per annum.
To enhance the concept of fractional ownership, blockchain technology can aid in the tokenization of the big properties.
The digital tokenization of real estate assets breaks down the ownership of the property into smaller shares which can be traded on an exchange through your mobile devices just like how we trade stocks.
This tokenization breaks down the initial investment which enables small-scale investors to taste success in the real estate sector.
6. Machine-Aided Real Estate Construction
The labor-intensive construction industry in real estate has accounted for increased costs and high prices.
The use of modern-day technologies like Additive Manufacturing 3D Printing in constructions will become a unique solution to slow real estate developments.
The Additive Manufacturing 3D printing technology makes real-life objects by using layering of materials through computer-controlled processes.
This relatively recent technology is expected to scale up the real estate projects at a faster pace and lowest cost. Thus, the outbound result of it will be affordable homes to all.
The 3D printing technology is currently in trial phases wherein one of the big construction firms in India has made successful testing attempts by building a two-story building in almost 106 hours.
With more upgrades and brainstorming, 3D Printing construction would eventually disrupt the traditional practices of real estate developments and ensure uniformity and durability in projects.
Technology is rapidly changing its forms and is surely going to revolutionize the real estate sectors in different aspects as discussed. The stakeholders involved like investors, dealers, builders, buyers, and so on will be the key beneficiaries of the advancements with economic, time and safety efficiencies.
It’s time that we acknowledge the above happenings and take the right step in the direction of Real Estate Investments to reap the benefits of the upgrading sector.
Investors need to keep a tab on the developments and grab the opportunities as soon as they can. The Real Estate sector is at its best time for investment in 2021 with the lowest leverage rates as well as tax aid from the Government.
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