The writing on the wall at this stage is clear - any kind of real estate recovery is likely to happen only on the back of tech innovation.
While the jury may still be out on how long the impact of the Covid-19 pandemic on the real estate sector will last, or how severe it would be or whether there would be a ‘new normal’, one thing that has emerged without a shadow of doubt, is the need to digitise physical processes. In a world where the Coronavirus is here to stay and social distancing norms will become a way of life, processes that reduce the need for in person face-to-face communication will invariably find favour. This is where Proptech comes into the picture.
Opportunity for Proptech companies in the Covid-19 crisis
To be clear, the emergence and importance of Proptech isn’t an entirely new trend in the market. The government’s Smart Cities mission was the first major fillip for the adoption of technology, to create better and more efficient cities. Over the past one year, blockchain technology has shown promise to revolutionise property transactions, IoT has transformed the way we live at home, virtual and augmented reality have made home search easier and 3d printing has given us hope that we can build homes in a matter of days at a fraction of normal construction costs. It is, however, in the current economic scenario, where almost every expert has predicted negative global GDP growth in 2020 and where housing sales and launches have dropped significantly, that Proptech has once again come under the spotlight. With customer site visits being practically non-existent, construction activity having come to a virtual standstill due to the lockdowns and issues with the availability of raw materials, especially from countries like China, it seems as if the solution lies in the adoption of smart technology.
In this changed landscape of consumer and sectoral needs, lies the real opportunity for Proptech companies. In the absence of site visits, the trend is shifting towards webinars, digital walk-throughs and virtual reality tours. We are likely to see technologies like gesture and face recognition based building controls, platforms that reduce the need for human contact in real estate transactions through digitising paperwork, technology that enables social distancing on construction sites, integrated solutions platforms that enable online sale of properties, tech platforms for aggregating demand for construction raw materials etc., to gain momentum. I firmly believe that the acceptability of digital solutions is likely to go beyond just online searches and discovery, and move into the realm of final deal closure, and remain important even beyond the sale. Keeping track of construction progress, property and facility management for those already staying in ready properties, etc., will become de rigeur, digitally.
Accordingly, there will be a surge in demand for online home booking platforms and 3d visualisation products. Like many product categories, where we see the launch of a new product first on a digital platform and subsequently in offline mode, it is expected that real estate will see some tech-savvy firms, particularly the reputed names, adopt a similar strategy in the coming months.
The future belongs to PropTech
The writing on the wall at this stage is clear – any kind of real estate recovery is likely to happen only on the back of tech innovation. Coping with new consumer behaviour and changed market requirements post lockdown will necessitate the increased use of technology by our real estate firms. I would, however, like to point out that at this juncture, Proptech companies would do well to strategise so as to find the balance between immediate revenue needs and long-term opportunity. There’s no denying that the next few months will be tough for the real estate sector and it will be survival of the innovative.
(By Dhruv Agarwala, Group CEO, Housing.com/ Makaan.com/ PropTiger.com)