The impact of proptech on real estate industry growth

Abstract

The real estate industry is currently undergoing a digital transformation that not only changes its nature in terms of the markets and work environments, but is also influencing its growth. What are the main trends and concerns related to this transformation? To what extent is the real estate industry already prepared for this? This paper reviews the situation in terms of the emergence of a phenomenon known as PropTech. PropTech is characterized by the massive implementation of emerging technology such as home matching tools, drones, virtual reality, building information modelling (BIM), data analytics tools, artificial intelligence (AI), Internet of Things (IoT) and blockchain, smart contracts, crowdfunding in the real estate sector, fintechs related to real estate, smart cities, regions, smart homes and shared economy. This survey of changes in the real estate industry due to PropTech covers four areas: (1) PropTech applications in the real estate industry; (2) implications of PropTech for real estate market transparency; (3) how PropTech could give a region or a company a competitive advantage; and (4) concerns on the wider implications of these changes on a labour market and education. In a plausible scenario, changing the real estate technologies could change system dynamics and improve real estate market transparency. Moreover, it can be asserted that, in a broader sense, PropTech is beneficial for territorial competition and territorial growth strategies. And lastly, under different institutional arrangements, PropTech can affect the changing structure of the real estate market, the demand for hi-tech, new skills as well as emerging policy challenges for the real estate industry.

Proptech: A qualitative analysis of online real estate brokerage agencies in Spain

“…For Saull et al (2020), it is a movement that promotes a change in mentality within the sector and its consumers. Siniak et al (2020) define proptech as the massive implementation of emergent technology in the real estate sector.…”

“…Proptech 2.0 began in the 2000s, when technology emerged in the traditional real estate sector, creating process efficiencies through automation, scale and uniformity (Baum, 2017;Baum et al 2020). Data analysis and the beginning of virtual reality offered better and more specialized services (Siniak et al, 2020), in addition to optimizing consumer experiences, inspiring new agents and other more consolidated ones to invest in their development (Blair Equity Research, 2015).…”

“…It was in this stage when new companies were founded, focused on the buying and selling of property online (Baum et al 2020;Siniak et al, 2020;Baum, 2017), such as Idealista and Fotocasa in Spain (González, 2017), Rightmove in the United Kingdom and peer-to-peer platforms like Airbnb and Homeaway (Hernández et al, 2021). This phase is associated with important and revolutionary innovation and a significant increase in investments.…”

“…The last decade has witnessed significant technological innovations and an important proliferation of new commercial models in the sector (Shaw, 2018;Barwick & Wong, 2019;Clayton et al, 2019;Siniak, Kauko, Shavrov & Marina, 2020). The use of new digital and computer technologies is gradually spreading in a real estate sector marked by its weak capacity to innovate and by its relative slowness to adopt innovative technologies (Kassner, Cajias & Zhu, 2022;Fields, 2019).…”

Awareness and Usage of Mobile Technology in Real Estate Practice in Developing Countries: The Case of Ikeja, Lagos State, Nigeria

“…Available studies have shown that efforts were concentrated on many aspects of this issue. These included the relevance and application of ICT in estate surveying and valuation (Chiedu, 2010;Ibisola et al, 2015); factors influencing the use of ICT (Adeyemo et al, 2015;); impact of information technology on real estate income (Jud et al, 2002); application of GIS in estate management (Olaniyi et al, 2006); technology /digital disruption in real estate industry (Deloitte, 2015;Lizam, 2019;Reding et al, 2014) and PropTech evolution (Aihie, 2019;Baum, 2017;Baum et al, 2020;Olufunso, 2019;Siniak et al, 2020;Tagliaro et al, 2021). However, studies on awareness and usage of mobile technology have been limited.…”