What does PropTech mean?
The term PropTech, Property, and Technology, has grown significantly in terms of Google search volumes. Since 2016, the phenomenon seems to explode worldwide, with peaks in popularity in Singapore, in the United Kingdom, in Switzerland.
Protects are high-tech startups that exploit the opportunities offered by digital, artificial intelligence, and big data to create innovative products or new models to conquer the real estate market.
The difference between the companies listed above and the proptechs is that for the former, technology is a nice accessory, but their activity remains fundamentally analogous; for the latter, technology is the basis of business.
No wonder then that Proptech is the concept behind the revolution that is turning the real estate industry upside down around the world.
Selling a house: why rely on a PropTech?
The sale of a house has many variables that must be taken into account. The valuation of the property alone, at the base of the entire process, is carried out by taking into consideration a very large number of objective factors, but which cannot be precisely measured without resorting to modern technologies.
An online real estate valuation algorithm (such as the one developed by Homstate) is able to cross in real-time data on demand, supply, valuation of properties with characteristics similar to that to be valued in the area of interest with a margin of minimal error – and that is further refined over time.
Before the advent of proptechs, traditional agencies based their assessments and decisions only on analog processes and experience data – with an even significant margin of error.
A proptech instead exploits digital processes and makes decisions supported by big data and algorithms in order to offer the customer a more transparent, more performing and more advantageous service.
The proptech companies also make use of digital native property management systems: this simplifies the interaction between intermediary and customer, guaranteeing a certain freedom for the former and a good level of control for the latter.
Leasing: if PropTech also reinvents renting the rental
Proptechs are also making a difference in the renting sector, bringing together supply and demand with speed and precision unknown until a few years ago.
AirBnb is the most striking example of how the birth of a single proptech can change the cards on the table.
On the other hand, the data confirm the growth in the demand for leases compared to that of the sale of properties: this phenomenon is to be attributed to the repercussion of the crisis that has upset the real estate sector in the past decade and to the change in consumer habits.
If before the house was in fact a good to invest in – in Italy above all the brick has always been a form of saving – the last generations tend to favor the use of the property over the property, therefore the lease over the purchase: Millennials and Generation Z undoubtedly prefer sharing.
Proptech: technology at the service of the real estate sector
For some years now the real estate sector has undergone an important evolution due in particular to a process of digitization and technological innovation. This transformation is often referred to with the term “Proptech”, which derives precisely from the merger between “property” and “technology”.
Although the definitions attributed to it over time are different, almost all experts agree that all the technological innovations developed and implemented in the real estate sector, but not only, are attributable to the Proptech concept. The term Proptech also refers to the industry itself, the business sector contaminated by this wave of innovation.
The aim of this new phenomenon is to improve the real estate sector under various aspects, optimizing the processes and properties themselves, moving in a digital and innovative environment, in order to obtain greater efficiency.
According to the report “Innovative technologies, tools and services for Real Estate” published by the Proptech Monitor established by the Politecnico di Milano, there are three main areas of interest for Proptech:
- Smart Real Estate, which facilitates operations and management of real estate assets at different scales, using high-tech platforms and systems,
- the Shared Economy, which defines the property considering how is used, such as sharing a house or workspace,
- Real Estate Fintech, which includes activities such as brokerage, crowdfunding, investments, and auctions.
In addition to those listed, there is also another category, generally included more in the construction sector than in the real estate sector. This is Contech, mainly aimed at the design and construction phases of buildings supported by the use of technology.
Real estate and the digital turning point
Traditionally, real estate has always been a very slow sector to evolve and to follow new paths. The last forty years, however, have marked a break with this attitude, mainly thanks to the strong technological development that has changed almost all sectors of the economy.
At first, the approach was to use computers and information systems to manage property data more efficiently. Over time, the uses have been more and more numerous and different from each other until, more recently, we talk about online real estate crowdfunding platforms and blockchain technology applied to real estate transactions. It is now a must to talk about “digital real estate”, since most of the activities related to the sector are now carried out online, from trading to financial investments.
This rapid evolution of the real estate sector has raised many concerns in terms of regulation, given that until now real estate has always followed a well-framed regulatory framework. All the new realities that revolve around the concept of Proptech have led the legislators to move towards the definition of new laws suitable for including and implementing these innovations. However, if for some technologies, such as blockchain, some discussions are still underway, for others there is already a dedicated discipline. In Italy, crowdfunding platforms, which allow capital raising and investment in real estate projects, already have their own specific regulations and can therefore offer greater protection to investors.
Homepal, pioneer of Italian Proptech
Thanks to the advanced use of technology and big data, Homepal offers its private users a series of solutions to manage digitally the sale, purchase, or rental of properties in total safety, full awareness, and with great savings compared to the costs of traditional agencies.
Homepal is led by a group of managers with important complementary experiences in the company and in consulting: Andrea Lacalamita, Founder and President, an expert in marketing and strategic planning, with a background in the banking sector, such as Mediolanum and Unicredit; Monica Regazzi, CEO, finance and business strategy consulting expert, former partner of BCG – Boston Consulting Group; Fabio Marra, Founder, and Chief Commercial Officer, customer service and CRM expert in the telecommunications sector, in particular in H3G.