The last couple of years, technology has been revolutionizing different markets such as the financial market or the insurance market. However, one market that has been growing really fast is the Real Estate market. This lead us to the term Proptech, also known as Real estate technology, which refers to the use of digital technology in order to innovate and simplify the way of selling, searching and financing in the Real Estate industry. Essentially, Proptech wants to solve property needs.
The size of Real Estate technology has been growing strongly during the last couple of years. A round 75.2 billion dollars has been invested in the real state technology and in just the first three quarters of 2019 alone, 24.6 billion has been invested (EY, 2019)
As we mentioned before, Proptech can innovate the industry in different ways, with some of them being the following:
Virtual Reality
The use of virtual reality allows customers to simplify the experience of buying due to the use of virtual tours of the properties for sale from the comfort of their homes, saving them time and money. This virtual tour shows costumers a 360° view of the property and gives them the opportunity to feel, walk and see every detail of the property as if it were inside. Moreover, this also allows real estate agents to reach more clients in less time
Flexible Workspace
The demand of space to work for new startups has become an increasingly need, therefore different proptechs innovate in the way of offering flexible workspace. Let's take for example WeWork, one of the most important real estate companies that provide flexible shared workspace around 32 countries with over 848 locations, mainly offered to new startups looking for a place that adapts to its needs. In order to adapt to the needs of these startups, Proptechs like WeWork, use technology tools such as big data in order to collect and analyze data in order to get insights for flex space operators to design smarter and more efficient workspaces. Another tool used is IOT, which allows a better manage of a shared office space.
Real Estate Crowdfunding
Crowdfunding refers to the method of raising money coming from a large number of people, typically via the internet, in order to make a project. Regarding Real Estate Crowdfunding, it refers to the method of raising money to finance the construction of properties by connecting investors and construction companies. This type of Crowdfunding is also known as equity Crowdfunding, in which the investor becomes a shareholder. One example is the Spanish Real Estate Crowdfunding company Housers, in which you can invest starting from 50 euros, in the construction of a property and gain interests, everything through internet. This helps construction companies to find a better platform of finance compared to the banks.
Proptech is constantly changing the real estate industry, helping and simplifying the different types of process that we can find. In Peru, we have already seen the growing of use of flexible or co-working places. Nevertheless, the use of virtual reality is still yet to come, as well as the new platforms that help finance real state. Over the next couple of years, the use of these alternatives will surely start to come and increase making real estate a more efficient market
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