Propped by Tech

The buzzword for the real estate industry now is property technology, or proptech in short – with the various players trying hard to keep abreast on what advances it may bring.

20 Jul 2017

Propped by tech
The buzzword for the real estate industry now is property technology, or proptech in short – with the various players trying hard to keep abreast on what advances it may bring.

I must admit, I still write cheques but at the same time opt to pay for my groceries using my smart watch. My view on proptech remains similar to that of fintech. But definitely, both industries are marching ahead whether we are prepared for it or not.

By definition from the RICS, proptech refers to all aspects of innovation and how it impacts the built environment. This includes software, hardware, materials or manufacturing. So technically, the first wave should have taken place in the mid-80s where data met computing power and was adopted for research, analytics and performance management. With that, my first interaction with proptech would be the use of software solutions Argus in my early part of career in the early 2000’s. A quick search also mentioned to me that Argus was established in the mid and late 80’s.

Today, some may argue that proptech is so much more advanced in terms of technology and applications. There are many facets of technology which may include Artificial Intelligence, Virtual Reality, Crowdfunding, logarithm computations and of course the Internet of Things. Proptech now includes a myriad of virtual services including online brokerage services, enabling customers to make real estate decisions, virtual tours and providing interactive smart houses. Proptech startups are also set to transform the real estate sector especially given venture capital injections: It has been reported that Singapore based proptech startups have captured around 6% of the capital’s venture capital funding. The government’s support and a set of initiatives supported by SGInnovate will boost startups to grow and further expand to neighboring countries in South East Asia.

Being gainfully employed in the real estate industry, there are many conundrums posed to me with regards to whether proptech are deemed to be more disruptive or productive.

Generally, property search engines online and on apps are one of the most commonly used property technology in the industry. Brokers are able to widen their reach via the world wide web but at the same time there is a threat of undercutting the brokers when sellers and buyers decide to bypass them. I must also admit that I bought my home 6 years ago via assistance from this portal.

Singapore based PropertyGuru is one of the more successful real estate portals with operations and affiliates in Singapore, Thailand, Malaysia, Vietnam and Indonesia. PropertyGuru has also recently launched its first mobile showroom where users are able to walk through potential apartment listings via virtual reality gadgets.

Virtual reality is definitely becoming an avenue for most real estate players to adopt in marketing. Capitaland has launched an immersive VR simulation studio as part of its Funan show suite. This allowed visitors to explore and visualize the interior of Funan mall in 3D, when it opens in 2019. Lendlease has also utilized 3D modelling platform to aid the visualization of Paya Lebar Quarters in its construction phase for planning and executive purposes. There are plans to use VR to manage its facilities when precinct fully opens in 2019.

The advancement of technology is no doubt inexorable and is targeted to improve productivity in every industry. The real estate industry is definitely not spared. However, my view is that while property technology should be adopted to improve processes and thus efficiency, there remains elements of the real estate industry that cannot be replaced by any form of technology – the bond formed from interpersonal relationships as well as the adaptability of information provision. This means that a good and knowledgeable broker from a reputable real estate consultancy will remain favoured.

To cap my thoughts, an episode of Shark Tank comes to mind. In this episode, a pitch for funding for a web based real estate software named Revestor was made to the potential investor or “sharks”. Revestor, a patent-pending real estate search engine based in San Diego, is targeted at homebuyers and investors and aims to provide searches for the best homes for sale by the highest potential returns.

One of the potential investors in the panel was Barbara Corcoran, a guest business speaker at various real estate events and business consultant via her consulting and television production business. Barbara stated in the show that she had purchased many foreclosed properties in her area since she knows that market. Barbara said that there were vital pieces of information that go into her decisions that were impossible for Revestor to address. To her, brokers value-add by the provision of non-quantitative information that logarithms and artificial intelligence cannot provide.

At the end of the day, sound decisions still require sound advice. While I may finally do away with my cheque book one day, I insist that I will still be engaging in discussions with humans.

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