Jerry has just been promoted at work. He now holds a Senior Managerial position. The perks are good, and as an added bonus he is now entitled to a sizable housing loan. He ponders over his plans for the future as leaves work that day, elated over his prospects and resolving to start house-hunting as soon as possible. His family have lived far too long cooped up in an apartment that was too small for their needs. That night he does some online research into houses that are for sale in a particular area.
The next morning, Jerry is surprised to find an e-flyer in his email inbox with a personalised message. It is from a real-estate agent who has already earmarked a few properties he might be interested in. The polite query asks if he would like to see any of these properties this weekend. Jerry is surprised. How did this person know that he was on the lookout for a new home in this particular area and in this particular budget?
The answer is simple: Artificial Intelligence.
This is just one of the familiar ways new tech is taking the world of real estate by storm. AI is now able to use algorithms based on one’s online search history, be it on the web or social media, and then target that customer’s specific need with a specific solution. Sometimes, robots (or sometimes, chatbots) are available to answer customer questions that help them to resolve their doubts and bring them closer to completing the deal. AI will be able to carry out these tasks by analysing customer needs, engaging in historical data analysis, projecting real estate market trends worldwide, determining pricing and on the whole, boosting the customer’s purchasing experience.
Let’s take this further…
Why stop here? Why not indulge your customer so well that you bring the whole house-hunting experience right into their own living room? This is now possible with Immersive Technologies that provide a 3D experience of the house one wishes to purchase through virtual reality. If real estate companies are looking ahead at how much market share they can garner through new technologies, Virtual Reality (VR) and Augmented Reality (AR) is certainly where the money lies. This process will further save money and time for both potential buyers and the real-estate agents. Construction companies will also be able to use 3D models of projects that are still in the pipeline and share them with customers through AR and VR. According to Goldman Sachs, the value of AR and VR markets should reach nearly $80 billion by 2023 with the real estate industry biting into a large slice of it. Forbes adds that, “The global metaverse real estate market alone was valued at $821.9 million in 2021, with a projected increase to $5.95 billion by 2028.”
Complementing this is Property Management Software which affords both buyers, renters and sellers of real estate to engage in easy communication by discussing lease agreements, maintenance issues, and even process applications, in addition to delivering timely information about houses and buildings that are on the property market, while also identifying buyer trends and so forth.
Bringing it home
As the next step, imagine that you are the new owner of a home. Ideally, you would like value for money and comfort is paramount in this. A new technology called Building Management Systems (BMS) will help with this. It regulates temperature, air-conditioning, the lighting, security systems and so on. With the advent of smartphones, smart tv’s and various smart devices, why not also move into the era of smart homes? From the perspective of building owners and building managements, this technology will also be extremely useful in keeping tabs on when maintenance work is due, and also helping identify potential problems before they become too challenging.
Other tools such as Internet of Things (IoT) and AI too, are encompassed in this smart technology that keeps homeowners comfortable and safe. These facilitate the use of electronic home appliances through voice commands and keeping homeowners safe in case of an emergency by securing doors, turning on lights and sounding alarms.
Blockchain technology which is a secure database of information that enables the tracking of transactions within a certain business network is also used in the real estate industry. According to Investopedia, blockchain presents new ways of dealing in real estate and facilitates online marketplaces. For instance, by introducing tokens in the trading process, transactions within the industry become like the stock market where buying and selling can be done online. This also removes what many people consider a troublesome middleman in the process- the real estate broker. It is expected that blockchain platforms will also enable listings, fees payments and legal paperwork shortly.
There are a host of other benefits that make blockchain technology a significant part of the future of real estate such as providing a decentralized system for transactions and data, much like the cryptocurrency network. This will carry greater transparency and security in addition to being more cost-effective.
Game on for investors!
New technology in the real estate industry will also see existing fractional ownership trends increasing in efficiency as PropTech platforms facilitate part investments in various properties. Therefore, investors who do not wield large amounts of capital and would like to invest small sums in various real estate assets will now be able to do so easily.
Data analysis through AI is another area that will build on huge potential, as through this real estate agents will possess the opportunity to gain knowledge of properties that are on the market, instantaneously. This access to information should also see better forecasts of property prices, while also giving rise to efficient problem solving and decision making without human involvement. An article on ‘Emerging real estate technology trends to shape the industry in 2023’ by Stratoflow observes that, “Quantum computing AI is a developing concept that will surely gain momentum in 2023. Projections estimate that the global quantum computing industry will be worth $1,765 million by 2026, up from $470 million in 2021.”
Decisions, decisions, decisions
Emerging technology will undoubtedly make things more transparent, efficient and easier for stakeholders in the industry. It will also increase the options available to investors, buyers and sellers, thereby leading to more decisions having to be made. However, with the tools available at hand and those that are becoming available in the near future, it is certainly tipped to be an exciting time for the real estate industry.
(Anouk De Silva)