Real Estate Digital Transformation in 2024: Techs & Applications

No company is safe from digital disruption, and the real estate business is no exception. Real estate has been a late adopter of digitization compared to other industries such as banking, retail, and healthcare. However, there are numerous applications such as virtual tours, automated transactions, and personalized services where digital technologies enhance the home buying experience while improving operational efficiency for real estate agents.

What does digital transformation mean for the real estate industry?

Digital transformation is the shift that appears within the real estate industry due to the implementation of digital technologies. With the adoption of digital technologies, real estate players such as developers, brokers, agents, investors, or managers embrace skills and culture change to meet evolving customer demands

Why is digital transformation is important in real estate?

To remain competitive in increased competition, real estate companies should explore new structuring options, improve operational performance and optimize portfolios to get maximum ROI. According to the 2019 KPMG Proptech survey, real estate companies are increasingly adopting digital technologies. 58% of respondents have a digital strategy in place, up from 52% in 2018 and 2017. The reasons why digital transformation is necessary for real estate businesses are:

• Change in customer behavior and expectations: The way people search for property is changing. They prefer mobile or web searches rather than hiring real estate brokers. And customers increasingly initiate contact with brokers online. Therefore, the absence of a strong online presence means losing the chance to connect with interested buyers and sellers.
• Change in technology: With the implementation of digital technologies such as automation, companies can improve their operational efficiencies.

What are the key digital transformation trends/technologies in real estate?

The increasing number of PropTech companies are offering products & services in the following areas:

Artificial Intelligence

Automation

With RPA technology, businesses can automate several manual tasks such as property inspection, digital marketing, invoice processing, and customer service.

Big Data/Analytics

Real estate is an industry that collects large data sets regarding property, owners, companies, renters, agents. Data analytics solutions can help real estate businesses understand customer segments and predict customer behavior. CRM tools are widely used by real estate businesses either to outreach potential customers or to collect data of customers for making predictions about the market conditions, property buying, investment perspectives, or price.

Process mining

Businesses must understand their processes before implementing digital transformation regardless of whether they work with a consultant company or not. Process mining is a digital transformation enabler technology that helps business analysts and leaders discover and visualize their businesses to identify areas for automation and improvement.

Augmented Reality (AR)/Virtual Reality (VR)

AR technology can be used to see what a property would look like through virtual tours. For example, a Singapore-based property search platform, PropertyGuru, launched its first mobile showroom where they provide VR goggles to view condos and flats so that they can improve customers’ engagement.

Building Information Modelling (BIM)

Building Information Modeling (BIM) is an intelligent 3D model-based process that gives architecture, engineering, and construction (AEC) professionals the insight and tools to more efficiently plan, design, construct and manage buildings and infrastructure.

Drones

Real estate agents, brokers, and commercial realtors can use drones to capture aerial imagery of properties. Drones can be used in real estate for:

• marketing purposes
• inspecting all corners of the property, including hard to reach areas like the roof, and crawl space areas, etc.
• mapping the property for commercial tenants who would like to inspect a building before leasing
• inspecting constructions

Smart Contracts

Smart contracts are blockchain application that records the conditions of contracts as computer code. When all conditions are met, the contract is activated and asset exchange happens. For the real estate sector, smart contracts mean bank verifications and middlemen are no longer required.  The real estate industry involves large transactions, therefore smart contracts are an advantageous technology that enhances the speed of transactions, protects against fraud, and reduces cost.

Apps that facilitate property search

The key to digital transformation is being where your customers are. Due to the increasing interest in mobile applications, real estate businesses should consider developing mobile apps to reach out to new customers. With mobile app platforms, buyers and property owners can have access to all the information necessary about the property.

IoT

The internet of things is a technology that uses the internet of interrelated computing devices that are embedded in our daily objects. Predictive maintenance, energy efficiency, and convenient lifestyle are some of the benefits the real estate sector will derive from the IoT. Smart home devices with integrated sensors are another application of IoT that increases the value of properties.

What are digital transformation examples from real estate companies?

OJO Labs is a PropTech company that helps businesses transform the home buying and selling experience with AI and machine learning technology. It delivers personalized property recommendations and guides home buyers and sellers along their journey. They optimize property searches based on consumer behavior and engagement.

Zumper offers renters the ability to find, apply for and then book an apartment. They can also digitally pay their rent to the property owner. It also helps small landlords and multifamily properties find tenants, market properties, and collect rent.

Homesnap is the real estate industry’s national search portal that provides users the relevant information about a house including price and interior photos with some properties after the user takes a snapshot of the house.

Apartment Ocean is the conversational artificial intelligence platform for customer service in real estate. Apartment Ocean helps property management firms to increase customer handling efficiency and lower the cost of customer service. AI assistant handles the time-consuming and essential customer service tasks for multifamily companies, such as answering frequently asked questions, recommending apartment listings, and scheduling apartment tours.

The Guarantors is a fintech company that offers innovative insurance and financial solutions for the real estate ecosystem. The platform is designed for owners to optimize rent returns for their property. They achieve this by evaluating risks in a data-driven way for potential residents such as students, international workers, and others who would traditionally have a harder time getting approved for an apartment. Similarly, they help businesses reduce their security deposit and unlock working capital by leveraging other financial instruments.

Further Reading

For more on digital transformation

• Digital Transformation: In-Depth Guide for Executives
• Digital Transformation Consulting
• 6 reasons for digital transformation (Dx) project failure
• 30+ digital transformation case studies
• Digital transformation for banking
• Digital transformation for retail
• Digital transformation for healthcare

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Sources:

Medium