Over the last few years, the tech boom has instigated massive change across most major industries, from the explosion of mobile-based business, to the increasing viability of self-driving cars. Despite being viewed as one of the more traditional, more long-standing sectors, real estate has not been left out by the tech boom, and has in recent years seen some fundamentally game-changing technologies making real headway in the industry – it is no accident that investment in property tech companies increased from $300 million in 2012 to $1.5 billion in 2015. How these technologies will affect real estate is likely to be no less than revolutionary.
Traditionally speaking, real estate has long been a local endeavour – if you were buying or investing, you had to be at least familiar with your target area, usually with physical access to it, otherwise you’d have had no idea what you were investing in. This is no longer the case. Online investment platforms now allow you to browse and invest in properties in countries on the other side of the world, while also providing any information you might need on the local market and regulations. This global version of the real estate industry is only likely to gather more and more traction – the EY Global Market Outlook 2016 identifies both innovation and transcontinental reach as two of the major trends currently affecting the real estate industry, especially considering the amount of money now available from emerging countries.
An all-online basis means that it is easier than ever before to enter the real estate market, meaning that the industry’s consumer base is probably going to expand rapidly over the next few years. Non-professional investors used to feel excluded from the property sector by its bureaucracy and extensive ladder of middle-men, opting instead to turn to investment funds and REITs; but the space for these intermediaries is slowly getting smaller, and the direct online version of investment - facilitated by platforms that offer services like Real Estate Crowdfunding - is becoming more and more popular. While the developed world’s contribution to the real estate market declined after the financial crisis, the emerging markets’ contribution increased, reaching a peak in 2011 – this demonstrates the new role that investors from countries such as Brazil are starting to play in the global property market. Technological advances in the industry will only further that trend.
As mentioned above, bureaucracy and paperwork used to plague the real estate sector. With all-encompassing services being offered by platforms, even the transactional portion of a property deal can be done online, requiring minimal input from financial institutions. This means that real estate investment is fast becoming something you can do in an afternoon, as opposed to a process that’s drawn out over several months.
Like most industries, mobile technology has had an enormous impact on real estate. Along with new platforms that can be used on the go, the majority of property brokerages have mobile versions of their sites, and some are even developing their own specialised apps to compete with emerging start-ups. Forbes magazine recently pointed out that platforms such as Zillow are fundamentally changing the way in which people buy property, allowing for easy access to market information and purchase options straight from the user’s mobile device. What this will do to the industry is potentially make it markedly less formal; that is, instead of having to go to a real estate agent or fund manager to buy or invest in a property, you will be able to do it on your phone, regardless of where you are.
June 21, 2017
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