Why the Rise of PropTech is good News for India's Real Estate Sector
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The global real estate industry has undergone a tectonic shift in the last decade. India’s real estate industry, too, is experiencing the effects of this global disruption. As per the BEF January 2019 report, by 2030, the real estate sector in India is expected to have a market value of USD 1 trillion. And, it will contribute to 13per cent of the country’s total GDP by 2025.
A multitude of factors like rapid urbanization, rising disposable income and an increase in the number of dual-income families is driving this growth, but it is the technology that has played a pivotal role. Adoption of advanced technologies such as artificial intelligence and machine learning has opened a whole new realm of opportunities for real estate players. Amidst this digital transformation, the term ‘PropTech’ is being thrown around a lot. In fact, it has become a buzzword of sorts in the real estate industry.
What is PropTech?
As defined by Matt Wong from CB Insights, PropTech is a “set of cross-industry technologies changing the way we research, rent, buy and manage property”. PropTech is used to manage large-scale operations and eliminate the challenges caused by distance, thus allowing real estate companies to simultaneously handle multiple projects in different locations. Full-stack PropTech, therefore, is a combination of technology and complex on-ground operations.
Although the rise of PropTech can be traced back to the 1980s, the term has caught the attention of realtors quite recently. Globally, $10.3 billion capital has been deployed in PropTech between 2016 and 2018. The PropTech segment in India, whereas, has seen an investment of $242 million in the same time period. PropTech in India has grown exponentially in the last 5 years, initially with online listings and brokerages then with co-working spaces. Today, co-living spaces and branded accommodations are driving the large-scale adoption of PropTech.
What Does PropTech Mean for Real Estate Professionals?
From mom-and-pop property owners and local builders to deep-pocked real estate investment firms, PropTech has ushered in a new period for businesses operating in the real estate space. Real estate players have started to rely heavily on new technologies like artificial intelligence, IoT, blockchain and virtual reality. Not only in terms of property construction, but also in terms of simplifying the entire property selling process.
Virtual tour of properties, for instance, is a major technology trend that saves one the hassle of dealing with pesky customers. Similarly, AI-based chatbots have enabled real estate companies to offer round-the-clock assistance to customers. Smart-building tech is another area of PropTech that is causing disruptions in the real estate sector.
How Should Real Estate Professionals Embrace This Change? Dissecting the DNA of Real estate
The past decade has seen widespread adoption of everything digital, and the real estate industry is on the cusp of a major transformation. Dealing with these changes requires real estate professionals to have a deep understanding of the industry. Whether by keeping up with the latest trends or making necessary changes to address operational challenges, industry players have no option but to welcome the PropTech era. Moreover, it’s also necessary for them to get on board all the stakeholders involved in the process.
How is PropTech Affecting India’s Co-living Industry?
In the last couple of years, the number of co-living space providers in the country has skyrocketed. Catering primarily to students and young working professionals, the majority of these companies combine technology with ground operations to offer an end-to-end housing experience. From the point of listing the properties to finalizing of the contract, prominent players in the industry have successfully harnessed the power of technology. And, co-living companies are utilizing technology to not only gain new customers but also to retain their existing ones. Take, the case of cashless payments, for example.
Millennials and Gen Z are more comfortable with digital payment systems. Keeping this in mind, co-living property owners allow tenants to pay their rents through net banking, digital wallets and mobile apps. When it comes to safety and security, modern co-living facilities come equipped with a robust network of tech-enabled safety features that include 24x7 CCTV surveillance, video door monitoring, smart locks, facial recognition-based key management, smart alarms, and more.
The co-living sector boasts of being one of the early adopters of technological innovations such as artificial intelligence, machine learning, chatbots etc. As it’s evident by the mushrooming of co-living spaces in India, PropTech has significantly contributed to the industry’s rapid growth.