PropTech start-ups creating a buzz around. What will we see shortly? – The Times of India Blog

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Varun Mohan, Founder & CEO, Definite.
The digital transformation of the real estate sector has proved to be immensely fruitful. Pre pandemic the digital advancement in the real estate sector was slow going. However, the onset of the pandemic has steered an accelerated digital transformation in the sector giving rise to prop-tech start-ups and emerging as real game-changers in the industry. The benefits of using automated property technologies are overwhelming. Consumers and real estate professionals will be at a distinct disadvantage if they choose not to use these valuable tools.
Technology has permeated into every business sector it is omnipresent no business can thrive without technology in the present time. The real estate sector too is changing with the changing time and advancing technology.  PropTech is a rather amorphous term that is formed from the word’s property and technology. It encompasses the various solutions that are involved in the growth of commercial real estate software. According to recent stats – PropTech fundraising records an all-time high in 2021 with $9.5 Bn from investors and venture capitalists in the mid of November. This figure breaks the record of $9 Bn fundraising in 2019. Technology has been increasingly becoming an attractive asset for landlords, potential real estate investors, and tenants looking for an efficient and secure opportunity in the Commercial Real Estate segment (CRE). This presents a lucrative opportunity for PropTech investors to witness high returns on their investment.
PropTech Start-ups on a Boom in the Real Estate Industry
PropTech is booming and it is here to disrupt the real estate space by changing the way we look at property investments. There are a huge number of PropTech start-ups in India that are playing a crucial role in infusing technology into the sector’s everyday operations. As a result, these start-ups are changing the way people look at property investments, especially in the CRE segment. For instance, there are technology-backed proptech platforms that are hosting multiple activities such as property listing, management and portfolio diversification to benefit the real estate investors or buyers without having to step into the hassles of managing their assets. These platforms add value and spur growth in the industry.
While the industry is identifying the potential of technology, the government is also coming up with various initiatives to drive PropTech’s adoption in the sector. The government’s flagship campaigns such as Digital India, Smart Cities concept, etc. are accelerating the holistic use of technology in real estate.
Furthermore, the PropTech startups are embedding technology in a way that makes the real estate sector more resilient. When the COVID-19 pandemic hit the real estate sector harder in 2020, propTech platforms helped it move on the trajectory of rapid recovery. For instance, prop-tech platforms helped buyers with the search and discovery of properties from the comfort of their homes and enabled virtual walkthroughs. In addition, the newly evolved prop-tech platforms leveraged the potential of drones, new technologies – Artificial Intelligence, Big Data, and Cloud to revolutionize the sector.
The Major PropTech Trends We Will See Shortly
Fractional ownership has evolved dramatically over the years and become an emerging trend in CRE. The concept is gaining popularity in India as it reduces the financial burden on a single investor or new age investors in CRE. In simple terms, the concept of Fractional Ownership works by dividing the cost of a premium commercial property into multiple fractions and provides accessibility and affordability to people to participate in a real estate investment opportunity at a fraction of cost.
Traditionally, only a bunch of wealthy investors used to invest in A-grade commercial property. However, fractional ownership has made it easier for young Indians to come together and purchase an asset, enjoy the yield and capital gains at the time of exit and sell their fractions, whenever required. This trend is projected to revolutionize the way people make investments in CRE in 2022.
AI and Cloud-based technologies are optimizing the process of asset identification and selection. Integration of these technologies is gradually outpacing the conventional ways of purchasing and managing an asset. The best example of this is the use of predictive analytics in determining the true value of a property and evaluating the occurrence of relevant events such as income distribution in the vicinity, changes in market trends, etc.
Apart from this, the increased adoption of cloud technologies has created a boon for real estate investors as they can access information about a property from anywhere. According to the facts – 80 percent of top PropTech companies are adopting some form of cloud technology in three different models – Software as a Service (SaaS), Platform as a Service (PaaS), and Infrastructure as a Service (IaaS). Besides taking the real estate sector online, the adoption of cloud technology in the real estate sector lowers the dependency on manual work, saving a significant amount of energy.
High-Tech Devices in the Real Estate Industry
The innovative use of technology in real estate has been incorporating drones into showcasing and selling homes. Here are some of the advantages that drones offer real estate agents and those buying and selling homes:
Virtual property tours were already creating ripples in the real estate sector. With movement restrictions imposed to contain the spread of COVID-19, the technology witnessed an uptick in its adoption by PropTech and prominent real estate companies. Potential buyers can visit the property virtually and decide without stepping out of their homes. Virtual property tours provide a more realistic reflection of the property interiors that can help in understanding whether the property matches the buyer’s imagination or not.
Blockchain technology can be used to verify encrypted transactions and ensure that no tampering impacts financial records. It will prove useful in fractional property investment and allow landlords to sell portions of their stake in a given holding.
The technology will also enable important documents such as property titles to be stored securely. As with other market sectors, the surface has only been scratched as far as the potential in using the blockchain for other cases in the real estate industry.
What’s coming next?
PropTech is one of the young industries that is expected to grow dramatically in the upcoming years. As the world population is predicted to double by 2050, the demand for real estate will also increase dramatically. Traditionally, the real estate sector in India was unorganized. However, the emergence of prop-tech start-ups disrupted the industry making it more approachable, affordable, and transparent for potential buyers or investors. The technological advancements adopted by PropTech players are predicted to create a digitally driven sector and sustain its place in the longer run. We will see companies inclined towards making decisions based on the data that Proptech provides them with. Companies will be able to scale at a much faster rate and the tradition that is currently associated with the Real-Estate sector will start to disappear or will be replaced with innovative ideas backed by technology.
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Views expressed above are the author’s own.
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