Technology is provoking change across every industry. With the emergence of innovations such as artificial intelligence (AI), augmented reality (AR) and the Internet of Things (IoT), the way we interact with the world around us will soon never be the same again. We are moving forward constantly by driving efficiency and looking for convenience.
The development of innovations for use in specific sectors is increasing. In the financial services industry we are seeing the deployment of FinTech to build trust with clients while creating efficiencies, and terms such as MarTech, InsurTech and PropTech become commonplace as technology is developed to bring value to individual industries and drive digital transformation.
What is PropTech?
PropTech is the development of technology to be implemented specifically in the property market. PropTech incorporates multiple different facets of the industry from planning and construction to the sale of property.
In most cases, PropTech is seen as the use of technology to overcome problems and inefficiencies to move the industry forward. Innovations are being realised such as intelligent warehouse management, drones in unsafe building sites and interactive mirrors to enhance shopping experiences.
How is PropTech being used in real estate?
Digital platforms are powerful forces for disruption. In a recent report, Britain’s largest estate agent Countrywide gave support to online property portal Rummage4Property. Expected to launch in the UK next year, Rummage4Property is set to compete with RightMove and Zoopla, the main players in the property portal space.
Countrywide and another 30 real estate groups and London-listed housebuilders are giving their backing to the new venture due to its competitive pricing. Rummage4Property will charge just £100 a month in comparison to RightMove's £1000 while also linking fees to house price inflation rather than just increasing the fees every year.
Back when RightMove first launched in 2000, it was considered a disruptor to the real estate industry. Leveraging the increasing reliance that people had on the Internet, it changed the process of how we searched for a property and has grown to be a stalwart player in the market.
The emergence of businesses like Rummage4Property illustrates how we are now beginning to see the disruptors being disrupted. With estate agents currently experiencing a difficult time with a slower housing market and online competition, it is interesting to see the industry give backing to a business like Rummage4Property. RightMove currently dominates the market giving estate agents no choice but to list properties on their online portal. Rummage4Property provides an opportunity to change the market and make it easier for costs to be saved where they are needed.
How will PropTech affect business?
PropTech is being developed to specifically take the problems the industry faces and solve them. All businesses involved in the real estate sector such as landlords, investors and developers need to consider how digital transformation offers opportunities to advance while also paying attention to how disruption could affect them and their operations. If the prospects that PropTech offer are ignored it could be that businesses find themselves falling behind as their competitors strive to be ahead of the curve.
Those operating in the industry should start thinking about the issues that their business currently faces and how technology could be implemented to overcome them. There may be data that is currently unavailable that could be used to inform future strategies. A company could have a focus on customer service and AI could be implemented to create valued experiences.
While PropTech offers opportunities, businesses should also remain aware of the implications that new innovations can bring. IP, cyber security and financial regulations are just some of the areas where it may be necessary to ensure that legislation is being adhered to and that the appropriate legal advice has been received.
Using PropTech in the real estate industry
When implementing PropTech, it is important to consider both the opportunities and the issues that it may pose to business. Gowling WLG's PropTech team is on-hand to advise companies on their journey as they consider the advantages for their operations.
Our Insights and Resources are recommended for businesses in the property market wanting to keep on top of PropTech developments. We will update you regularly with information from our legal experts in our real estate and tech teams, as well as other sectors and services you may be interested in.