Digital bricks: top technologies revolutionising the property sector

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Digital bricks: top technologies revolutionising the property sector

Startups are transforming the real estate industry, dismantling existing systems and, through the use of new technology, reimagining new ones. We round up the top tech trends disrupting the sector – and the PropTech firms behind them

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New technology has shaken up almost every major industry from retail to finance and healthcare to transport. It has been surprisingly slow, however, to disrupt real estate, which is traditionally a relationship-driven, bricks and mortar-based business. Property technology (PropTech) firms have historically focussed on improving existing systems, such as speeding up transactions and cutting costs, rather than replacing them. But that’s changing. A new generation of PropTechs are reshaping how properties are bought, sold and managed, and, in doing so, are creating new on- and offline communities as they expand the property ladder. Here, we reveal the top trends in real estate technology, and some of the pioneering companies behind them.

1 Augmented and virtual reality

Both augmented reality, which adds digital elements to images via smartphones and other devices, and the more immersive virtual reality are clever ways of raising the stakes in property marketing. According to Goldman Sachs, by 2025 the global VR market will be worth $80bn, of which real estate will account for $2.6bn. With high-quality imaging playing a crucial role in property marketing, and remote investors comprising a growing slice of the property market, startups are racing to offer 360-degree virtual tours to hook prospective buyers. Realvision is a US-based startup that sells marketing tools, including 3D virtual tours, to estate agents. The company completed a $1.3m seed-funding round in 2017, led by Dundee Venture Capital. Rooomy is another example. More consumer-centric, this iPad app allows you to virtually decorate a room by converting 2D images into a 3D space.



2 Crowdfunding

Like Uber did for transport, the sharing economy is revolutionising the property market by enabling more people to own a slice of real estate. Crowdfunding enables fractional ownership by linking prospective buyers with suitable investments and providing a digital platform for deals to take place. Dubai-based SmartCrowd allows investors to purchase a stake in a rental property for as little as $1,300. They ‘co-own’ the asset with scores of other people and split the rent from it. They may choose to sell their stake later and use the proceeds to invest in something else listed on the platform, or use the accumulated returns to buy a property on their own. Last year, SmartCrowd raised $600,000 in seed funding from Shorooq Investments, Abaxx Technologies, 500 Startups and other individual investors.​




3 Blockchain

The implications of blockchain in real estate are huge. Blockchain is an electronic transaction-processing and -archiving system that records information in a secure network. It is the underlying software behind cryptocurrencies such as bitcoin, but it can also be used to record conventional deals such as real estate sales, reducing the risk of fraud and speeding up sometimes-arduous processes. Founded in 2015, US-based Propy, works to facilitate blockchain-based real estate purchases. Clients can search for and buy properties using bitcoins, with the transaction logged through blockchain. In 2017, Propy raised $15m in an initial coin offering (the digital version of an IPO). Another US start-up, RealBlocks, uses blockchain to administer fractional real estate deals. In January, it closed a $3.1m seed round led by Science Inc, with Morgan Creek Digital, Zelkova Ventures, Ulu Ventures and Cross Culture Ventures.





4 AI and smart trading

Artificial intelligence (AI), the use of accumulated data to mimic human thought processes, is one of most disruptive technologies today. Businesses can use AI to spot patterns and trends, and grow their revenues. Industries including real estate are developing data and AI models to fill gaps in demand. One example is US startup Knock, which enables customers to ‘trade in’ their home. Founded in 2015, Knock aims to support people who need to buy and sell property fast – possibly due to an unexpected change in job. Its algorithm provides an instant trade-in price quote for a customer’s home. It then identifies potential new properties of the same value, and helps the user switch even before putting their own home on the market. It then markets the old home for sale, with the funds transferred to the customer’s new mortgage. In 2017, Knock raised $10m in a Series A funding round led by Madrona Venture Group, and this year it closed a $400 million equity and debt financing round led by Foundry Group, with Corazon Capital, WTI, FJ Labs, and Company Ventures. Another US startup, Opendoor, deploys an algorithm to facilitate tech-driven ‘flipping’ by homebuyers, investing in a property, adding value then quickly reselling. Through an app, buyers can browse homes, schedule a tour and make an offer all in one place. Last year, Opendoor raised $800m from Softbank’s Vision Fund, and a further $300m this year, valuing the company at $3.8bn. Finally, UK-based start-up AskPorter uses AI to provide a virtual assistant service to agents and landlords to automate tasks such as chasing rent. It raised £1.5m ($1.8m) of seed funding in August. Investors include Google, Plug and Play, Venture University, Pi Labs, WISAG FM and Henley Investments.



5 3D printing

For years, 3D printing was used for real estate tasks such as creating architecture models or generating building parts. Now, it is possible to manufacture entire homes through 3D printing, and experts predict the rise of 3D-printed cities in the near future. Given the escalating costs of traditional construction, 3D printing presents significant commercial opportunities. The technology speeds up the building process, and deploys advanced analytics to create safer, and more environmentally sustainable properties. In 2017, Russian startup ApisCor – which has offices in Moscow and San Francisco – claimed a breakthrough: it produced a 100-square metre 3D-printed home in just 24 hours, at a cost of $10,000. Last January, the company secured $6m from Russian venture capital fund Rusnano Sistema Sica.


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Topics

  • Technology
  • Real Estate
  • Innovation