How PropTech and digitalisation are changing the European real estate sector – during the coronavirus pandemic and beyond
Market-specific digital solutions are on the rise in a wide variety of economic sectors - for a good reason. They not only create new dimensions for customer interaction, but they also optimise the use of resources and data processing on the provider side. This digital transformation also takes place in the real estate sector.
The real estate market has long been viewed as a traditional and analogue sector that relies on direct customer contact. However, particularly over the past two years, a wide variety of start-ups have entered the European markets, providing new digital access to the full range of phases involved in real estate transactions and management.
The consequences of this shift to digital platforms are potentially far-reaching. “PropTech can change the way consumers and companies think and behave over the long term, especially by integrating innovative technologies in new business models,” explains Sachio Hirosawa, Managing Director for PriceHubble Japan. In this case, the term “PropTech” includes a wide variety of digital solutions.
What is PropTech?
PropTech, or property technology, refers to the development of digital offerings for the entire real estate life cycle. The PropTech overview provided by BUILTWORLD and PwC European PropTech Map 2020, for example, has the following five categories:
- Invest & Finance / Research & Valuate
- Building Operations
- Asset Management
- Smart City Solutions
From online tours with virtual reality to building information modelling (BIM), PropTech can be integrated in and used to optimise a wide variety of real estate investment and utilisation phases. In addition to established companies, as business partners, the beneficiaries are the end consumers themselves.
PropTech can be included in a network of existing tech solutions, particularly FinTechs in the financial sector, LegalTechs for preparing and managing contracts and ConTechs, found in the construction industry. The focus here is often complementary or even overlapping.
“The greatest overlap is with the FinTech sector, because it has such a close relationship to real estate,” explains Sachio Hirosawa. “It’s also an open secret that the FinTech industry is several years ahead of the real estate market. This is especially interesting for investors, because it can be used to better understand and predict developments in the PropTech space.”