In an article on Property Week, a real estate magazine, Angelica Donati discussed the future of the real estate sector and the impact that digital transformation will have on it.
The article is based on a 2017 research paper, published by the RICS (Royal Institute of Chartered Surveyors) and co-authored by Angelica Donati and Saurabh Saxena, with whom she co-founded proptech startup Houzen.
The focus of analysis is proptech, a term that stems from the words “property” and “technology”, similar to the way the word “fintech” was coined. The proptech sector has had a steady growth in recent years – in 2017, Forbes and CB Insights estimated a 36% increase in investment into proptech from 2016.
The proptech industry – says Angelica Donati in the article – is in the first phase of a “Gartner hype cycle”. On one hand, investment into the sector is growing. On the other, initial investors bet significant sums on many startups, expecting most to fail. When these failures start to materialize, there is a loss of trust in the entire space.
Proptech’s future challenge will be that of using big data in a broader and more systematic manner. In the real estate space in general, and the residential sector in particular, data is fragmented and access to it is limited (as most data is privately held).
However, those technologies that will allow a true digital transformation of the real estate sector require large quantities of data inputs in order to deliver significant results.
Angelica Donati believes that IA (intelligence augmentation) will be the one to watch in terms of deep technologies for proptech. Whilst artificial intelligence (AI) aims to replace humans for specific tasks, IA uses machine learning capabilities to provide workers with tools that spare them the more mundane tasks and improve their overall productivity, with significant time savings.
This is what makes IA the more interesting technology for the real estate industry which is, and will certainly remain, a very people centric sector.
The article ends with a forecast of the proptech related factors that will most radically influence the real estate sector. These are generational changes (that will bring on a growth of urban centres and the creation of hyperlocal micro-communities) and the technological paradigm shift that will cause the spread of new ways of living and working.