How Digitization is Shattering Real Estate Traditions
The real estate sector, for long, relied on the traditional model of working; channel partners and homebuyers met in person to visit property options and buy homes. However, the past three years have seen the model shift from ‘real-life' to ‘real-time’. This shift to technology-driven real estate was the industry’s response to the challenges brought on by the pandemic. Now, there’s no looking back and the sector is quickly adapting to PropTech across commercial and residential transactions. PropTech has been a lifesaver for the real estate industry and has helped it stay afloat amidst the global crisis.
The New Normal
Today, the search for a new property starts on the internet. Homebuyers visit various portals and websites to discover property options that meet their preferences. This shift in user mindset has begun to transform the real estate industry moving forward. According to research, 50 percent of the inventory sold in the housing segment in 2019-20 was online. This can be considered a huge move for the real estate segment, as the switch from offline to online buying of property signals a significant change in consumer behavior.
PropTech helps both buyers and sellers access information and consult online. Online catalogues, video/virtual tours of the property and online transactions are some of the PropTech offerings that the industry is already adopting. Signing purchase agreements and making payments online is the new normal.
Real estate agents arrange augmented reality journeys of property options that allow potential homebuyers to virtually visit and interact with properties that they cannot visit physically. Even for people looking to rent their properties, letting interested rent-seekers walk virtually around the house and look at things for themselves is very convenient.
Impact on the Real Estate Sector
The real estate sector is primed for disruption and big data will be the catalyst. Companies are compiling and collecting data on buying and selling trends in a specific area, as well as traffic and demographic data and consumer survey results. They analyze and collate this data to provide insights on pricing, home-value trends and potential value in specific neighborhoods. Big data in the next five years will be a game-changer for the industry, where developers and real estate consultants will target consumers based on their income bracket, lifestyle patterns, tastes, and several other parameters.
Investments in research and development have also progressed to the point where 'real-time' virtual reality tours and 'real-life' physical trips will be indistinguishable. This will result in a significant drop in client fees as well as organizational improvements for real estate professionals.
The real estate market has been steadily getting digital and virtual. Digital real estate transactions have increased by 20 percent post-COVID-19 and are only expected to rise further. The various leaders in the sector are already leveraging technologies, such as artificial intelligence, augmented reality, big data, IoT and smart contracts to meet the evolving customer needs and to differentiate themselves from the pack. However, it’s not too late for the remaining players to implement a digital transformation roadmap.
Right now, the digitization initiatives are being implemented only in select metro cities. But the proliferation of mobile devices and affordable internet access makes it easier for the industry to provide digital services to the rest of the country. A massive opportunity is up for grabs and it’s anyone’s game right now.
To sum up, developers and real estate agents must bring their digital services to smaller cities. This will encourage the housing ecosystem in these cities to keep pace with the evolving needs of their residents. Furthermore, the government must double down on the reforms it has pushed in the last three years to expedite project completion. There is an urgent need for the government to infuse funds to push digitization into the sector for its long-term impact and recovery.