There are not many sectors that have been as badly disrupted by the COVID-19 crisis as property. Large retail spaces like shopping malls have suffered. The demand for office space, a hugely lucrative niche, has been devastated by the take up of remote working. Large grocery superstores are being repurposed as eCommerce fulfilment centers. The pace of change in the property sector has accelerated more quickly than anyone could have foreseen due to the pandemic.
But the adoption of technology and innovation by the property sector is not new and could offer some respite to a troubled industry. Part 1 of our deep dive takes a look at proptech, the trends that are driving it and how B2B and B2C businesses involved in property can use technology to adapt to the “new normal”.
What is proptech?
Proptech (property technology) is a term used to describe the digital transformation of the property sector. It’s a catch-all term that describes the adoption of new technology and practices in the real-estate industry.
But it’s also a cultural change. It’s reductive to think of Proptech as just a general trend towards digitisation. The cultural change required to move away from the old way of doing things is just as important as the technology.
Information, transactions and visibility for all
Innovation in proptech is often tied to innovations in fintech. Specifically around lending, payments, money transfer/remittance and even equity crowdfunding.
These fintech innovations can provide consumers and businesses much more visibility on transactions and a greater ability to manage them in real time.
This increased level of granular information is particularly relevant with the evolution of Smart Real Estate and the Shared Economy.
Smart Real Estate describes tech based platforms that aid in the operation and management of property assets. These platforms can provide information about a building or an entire urban center.
The Shared Economy describes tech platforms which aid in the actual use of real estate property assets. Good examples would be something like WeWork (before it exploded) and AirBnB.
Tech platforms in both of these areas rely on information. Serving better information helps customers and businesses to make quicker decisions. Digital transformation in finance has provided a wealth of information to the property sector to speed up purchasing processes.
But as anyone who has tried to buy a house or apartment knows, it’s not a quick process. The legacy apparatus of property purchasing is still very much in play.
Proptech needs to utilise the new structures available from fintech to make purchases/renting quicker for both individuals and businesses. There is no technical reason why this cannot be the case. It comes down to culture.
Property businesses need to push for change. While that is very difficult during the COVID crisis, this also means that both B2B and B2C buyers are far less likely to put up with lengthy delays. Which presents a real opportunity for change.
Actions you can take:
- Property businesses need to use enhanced information available to speed up purchasing
- Property businesses need to apply pressure to other organizations in the property chain to change their practices
- All types of consumers now expect a self service approach. Property firms need to use their new access to information to work towards this
MAQE can help your business build bridging systems to integrate data from an almost limitless number of sources. Talk to us via [email protected] to find out more!
Blockchain
Blockchain is spoken about, quite feverishly, in just about every sector you can name. And unlike some of those sectors, property is one where it could be incredibly useful.
But what is blockchain?
Blockchain is a form of distributed ledger technology. This is radically different to a centralized database.
Here are some basic characteristics of a blockchain:
- There is no centralized version of the database or ledger. Everyone on the network has an identical copy
- There is no “trusted” authority. Any updates or changes to the ledger is by the agreement of everyone on the network
- Communication (or data transfer) is not through a centralized exchange. It is purely peer-to-peer. One user to another
- Blockchain is extremely secure. If one copy gets hacked or destroyed all the other identical copies on the network remain intact
- Anything can be stored, as long as the information is in digital form
So where can it be used in property? Well the answer lies in the previous section. It could radically speed up purchases.
Buying property with blockchain technology used as a framework should, in theory, be much quicker. Required legal compliance with the purchase should be quicker. And, for example, surveyors could immediately sign the chain when they complete their work. Blockchain has the potential to totally disrupt property purchasing.
Combined with the added information that all consumers have now, through the adoption of fintech, a property blockchain could finally bring property into the eCommerce age. Approvals could take minutes rather than weeks.
Actions you can take:
- Investigate blockchain technology for your property business
- Integrate new fintech information into your existing processes
Smarter buildings and processes
In Thailand there are many property groups that own large condominium complexes. Especially in Bangkok.
At the moment paying bills at many of these buildings is still a manual process. Maintenance charges are sent out with paper bills, as are water charges. Even with current technology there is no reason why these buildings cannot be smarter.
Organizations that own a large number of buildings could build smart building networks. They could easily monitor water and electrical usage to encourage more sustainable practices by their tenants and owners.
Integrating their data into dashboards should be an achievable innovation for many of these companies. The information from this could also be fed via API to external platforms that help to sell or rent out these units. They could also use this information to help people pay via their banking app of choice, rather than wait for a paper bill.
MAQE has a lot of experience building APIs and management information dashboards for businesses. Get in touch with us via [email protected] to see how you can make your buildings smarter.
Actions you can take:
- Assess the information you already have and how it can be fully digitized
- Talk to banks and financial service providers to make payments easier for tenants and owners
How MAQE can help
MAQE are commerce experts. We specialize in integrating digital technology to help businesses work smarter. Get in touch with us via [email protected] to see how we can help you not only digitally transform your property business, but help the cultural transition towards digital practices.
Read part 2 now where we take a look at the commercial property market in depth, the effect of the pandemic and how property companies can use technology to help navigate the new normal.