Lecture
Real-estate technology (also known as proptech, PropTech, prop-tech, and also as real-estate technology) refers to the application of information technology and the platform economy in the real-estate industry. Real-estate technology overlaps with financial technology, including such applications as online payments and booking systems.
Real-estate technology includes any application of digital technology or the platform economy in the real-estate industry. Examples of real-estate technology include property management using digital dashboards, «smart home» technologies, research and analytics, technology-enabled listing services/brokerages, mobile applications, residential and commercial lending, 3D modeling for online portals, automation, real-estate crowdfunding projects, shared-space management, as well as organizing, analyzing and extracting key data from bulky lease documents.
According to economist Richard Reed, the real-estate industry has historically taken a conservative approach to technology and adopts new technologies more slowly than other industries.
The development of residential real-estate technology spans a number of target areas, but is generally aimed at reducing the obstacles to buying, selling or renting property. Areas of focus include home search, home sale, purchase financing, closing a real-estate transaction (including appraisal, title, and escrow, as well as title insurance), property management, loan management, and mortgage-lending software. Many companies working in real-estate technology have seen a sharp rise in demand for these solutions, as the COVID-19 pandemic knocked management companies out of their usual mode of operation.
The history of real-estate technology's development is often divided into three stages. These stages broadly correspond to the periods 1980 to 2000, 2000 to 2008, and 2008 to the present.
In the 1980s, as personal computers became more widespread, digital technologies began to be adopted in the real-estate sector. Spreadsheets and accounting software, such as Microsoft Excel, began to be used by real-estate companies soon after they appeared. Advances in investment analysis also allowed real-estate investors to more accurately assess the value of commercial property, using larger databases of information.
The second stage began when real-estate technology was first oriented toward consumers during the dot-com bubble. At a time when most listings for sale and residential property were placed in print media and real-estate agencies, companies began focusing on moving listings into digital media. Since 2008, the widespread adoption of high-speed internet has allowed real-estate companies to move most of their data and services online. Real-estate databases such as Zillow are an example of moving information such as geographic data, property valuation, and real-estate advice online.
The development of digital technologies in the 21st century led to the formation of the sharing economy, in which applications such as ride-sharing platforms became commonplace. This also extended to real estate, as sites such as Airbnb and WeWork allowed property owners to rent out their property for part of the year.
COVID-19 accelerated the adoption of information technology in real estate. The pandemic spurred the growth of e-commerce and led to the closure of many traditional retail stores, which affected commercial real estate. Blockchain technology has also been used to track property ownership for land-registration purposes and to resolve potential title disputes.
After the pandemic, real-estate technology has increasingly been shaped by broader social issues, such as urban planning and applications in the public sector. An example of this is the United Kingdom, where the government established a «real-estate technology innovation fund». Under the banner of «real-estate technology», funds were initially invested in solutions involving citizen participation. More recent developments include applications in land valuation.
In the 2010s, numerous real-estate technology startups were founded, addressing such aspects of the real-estate market as design and construction, listings, and transactions. These startups received support in the form of seed funding and investment from various sources, in particular from venture capital funds.
In 2015, investment in real-estate technology grew, reaching more than 1.7 billion dollars across more than 190 deals. This represents an increase of 50% over the previous year and 821% over 2011. Deal activity also increased, reaching 378% of the total volume for 2011 and 12% over the previous year. [a more reliable source is needed] In 2017, the volume of this investment apparently grew further, reaching 8.5 billion pounds sterling. In the first six months of 2019, 12.9 billion dollars of venture capital was invested in real-estate technology startups, exceeding the 12.7 billion dollars invested in 2017.
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