Don’t panic if you don’t know what prop tech is. You’re not by yourself. Prop tech, a relatively recent term coined after the internet revolution, simply refers to technologies used in the real estate industry.
With the advancement of technology, it is not surprising that the real estate market has undergone metamorphosis as a result of massive transformation brought on by modern technology and numerous digital offerings that have transformed the way people live and operate.
And, as the pandemic upends industries, pushing them to go all-in on digital, it’s only normal that the real estate market, too, would look to digital technologies to help it remain alive in a pandemic hurricane.
According to a Deloitte survey, the commercial real estate (CRE) market, which primarily exists at the intersection of physical real estate space and its customers, appears to be on the verge of a digital revolution. Tenants and end-users alike are eager to do more in the physical space. They are particularly interested in creative and personalized technology-enabled experiences.
Already, property developers around the world are turning to technologies to arrange video and 3D viewings, use special HEPA filters with UV lighting, touchless entry and automatic sanitization steps, and use Automated Valuation Models to ensure occupant protection in houses.
In reality, amid the pandemic, the PropTech industry in India attracted $551 million in investment, according to a recent survey. Sixty percent of Indians claim they are likely to use internet tools to research home-buying or renting alternatives.
The Elara Group’s survey, PropTech: The Future of Real Estate in India, also reported that $2.4 billion has been invested in India’s PropTech industry through 225 deals; the share of investments in the commercial sector has risen to 62% in 2020 from 25% in 2015.
The study credits the segment’s rise to a rapidly rising middle class, accelerated urbanization, technological penetration, a growing internet user base of over 500 million, a youthful millennial base, and an increasingly consolidating real estate canvas.
It is expected that the Indian real estate market will reach $1 trillion by 2030. And, with the use of technology such as augmented reality, drones, big data, and artificial intelligence in home transactions, the prop tech market is expected to expand in the near future.
According to the survey, although a large portion of the brokerage market is still done offline, online searches account for more than half of all real estate purchasing decisions.
According to a pan-India survey, 60% of participants are willing to use digital channels to explore options to purchase or rent houses, and 37% are willing to close the deal entirely online after only one site visit.
As many as 47% of respondents state they will be willing to do so following several site visits. In comparison to the national average, approximately half of respondents in Mumbai and Chennai are willing to buy/rent completely online or after only one site visit.
Although respondents aged 25-35 are more open to making sales digitally, those aged 45 and up are more interested in using digital tools to research opportunities and will be able to close the deal online only after several site visits.
As technology advances, and with the penetration of data technology and 5G, it is reasonable to expect that prop tech as a sector can only continue to grow after the pandemic.