By: Nicole Parmar
In 2016 alone, real estate tech startups saw an investment of $1.8 billion, which was a whopping 85% increase from the previous year. Not only this, the number of real estate fintech startups across the globe went from 246 in 2008 to 1,372 by 2017. Looking at the unstoppable innovation wave in the past decade, it comes as no surprise that this trend will disrupt the fundamental way real estate business is done.
Blockchain: promoting real estate transactions
Similar to a distributed ledger, the blockchain eliminates the necessity for an intermediary or a ‘middleman’ to process, authorize or verify transactions. All your transaction records are enclosed in ‘blocks’ that are added to the chain using a cryptographic signature. All members marked on the distributed ledger are allowed to go through these blocks. As this particular infrastructure offers a valid and audible archive of all information stored on a specific dataset.
In the context of real estate, this allows buyers and sellers to easily monitor the transactions associated with the assets involved.
Startups like Averspace and Fundplaces are already using blockchain to store digital contracts and invest in real estate projects, encouraging the buyers/tenants to interact directly with the homeowner without signing a physical agreement.
Blockchain promises transparency and security by creating permanent and unchangeable transaction records, so that instead of a central authority, all the parties involved have visibility, greater security and most importantly, no single point of failure. Adopting blockchain is expected to facilitate a higher volume of standardized transactions, however, bigger and more complicated deals require human interaction and mediation.
Augmented reality: presentation and customization
As a branch of virtual reality, AR creates experiences using computer-generated (CG) content, real-world content or a mix of both to help users encounter the real world without physically being in it.
Real estate-related companies like Ikea and Wayfair superimpose a CG representation of their products, allowing buyers to visualise the furnishing in their preferred location. Floored, a tool designed by brokers and developers, is used very often to provide the fit-out of an unfinished property, enabling them to, compare, arrange and configure the virtual tours.
Committing to real estate, whether it’s rental or purchase, is an extremely important and time-consuming process. Instead of the current approach of linking to landing pages or physical viewings, these applications greatly help in increasing client engagement and visualizing a variety of configurations.
Artificial intelligence: extracting data insights:
In the technology realm, data is wealth and Artificial Intelligence (AI) remains the key to manage this wealth wisely. With the increase in data, computing power and the availability of algorithms, AI can now unlock helpful insights. In the real estate industry, macroeconomic data, property features and transaction data can be utilized to limit the this data and the current valuation.
In other words, algorithms tend to process the appropriate data sets, build a relationship between them, and project that particular relationship onto new query metrics, in order to find the unknown. A great example of an application that fits this criterion is Zillow that offers a “Zestimate” or a property valuation and an estimation of property value trends. With these upcoming features, users have higher visibility and support in enabling a swift, data-driven, decision-making process.
A July 2016 survey found that 95% of people preferred online websites over real estate agents when looking for purchasable property. Reali, Purple Bricks, Zoocasa, and Propy are a few platforms that either connect buyers with the right property expert or allows them to browse through relevant listings, based on any specific requirements they have in mind.
When making property-related decisions, AI provides a cost-effective way to zero-in on customer choices based on the user’s requirements, financial circumstances and preferences, thereby giving considerable time and cost savings. With further AI curation, you no longer have to scroll through countless pages of listings, as the optimal options for both brokers and buyers will get curated by AI.
An age-old industry such as Real Estate is now seeing a set of incumbents that are determined to revolutionize the customer experience end to end. Leveraging the latest innovations and best practices from adjacent industries – these startups are poised to increase efficiencies, reduce human error (and costs), and improve accessibility to housing for everyone, it’s just a matter of time.