The transition towards digitization and automation of the real estate sector is clearing the road for expansion, with digital technology providing the perfect tool for a massive shift within the industry.
Ironically, the challenges presented by the Covid-19 pandemic in the past 20 months have led to a significant growth of the real estate industry, incorporating technology into various sectors and disciplines.
“As with any industry, property managers realize that the best way to deal with the challenges of the pandemic is to digitize and automate their processes with technology,” said Eds Encarnacion, president and chief technology officer of homegrown property technology (proptech) firm Inventi.
“What we’re trying to do in the Philippines is already a standard in the most mature real estate markets in the US, Europe, Singapore and Hong Kong. The market is already moving in this direction; it’s just a matter of time before digital property management also becomes standard in the Philippines and other developing markets.”
John Corpus, executive director for Transactions and Advisory Services at KMC Savills, described proptech as “a catch-all term, encompassing a range of technologies and software platforms that are used in real estate, be it commercial, residential and even industrial.”
“It was coined from the ‘property’ and ‘technology’ and can be defined as the use of integrating technology in real estate transactions and activities involving landlords, property owners and tenants,” Corpus said.
It is a business using technology to disrupt and improve the way customers buy, rent, design, sell, manage and construct their real estate properties.
In the Philippine context, proptech allows businesses, companies and organizations to utilize technology to maximize efficiency and boost investment growth. The use of digital technology in the property sector is seen to bridge the gaps in the real estate industry, including the “limited movement for site inspections, meetings and negotiations due to restrictions because it supports the use of a virtual platform and digital marketing to continue business operations.”
In addition, PropTech opens endless possibilities for real estate practitioners as they can reach out to a more considerable number of digitally connected citizens.
One of the biggest ironies of the Covid-19 pandemic is that while it restricted movements in business, the acceleration of digital technology adoption provided an almost endless opportunity for the sector. Thanks to proptech, the industry’s reach increased, with the pandemic enhancing marketing opportunities.
The technology opens doors for virtual and even 3D tours or virtual open houses and walkthroughs for buyers and sellers from the opposite sides of the globe. Online consultations has also made it possible to property appraisals and valuation within minutes. But more importantly, deals are closed with documents signed through contactless platforms using e-sign channels that eliminated the necessity for physical transactions and meetings.
Even with the strict lockdown measures, digital technology has made it possible to enable companies to continue conducting business and use their virtual assets to leverage for a seamless transition in the post-pandemic era.
Indeed, research by Forbes shows proptech platforms have allowed landlords to generate higher revenues through efficient operations and improved business targets.
“Many office spaces also adapt to the new normal by enhancing the experience and prioritizing the safety of their occupiers. Landlords utilize technology to protect their tenants from the threats of the virus by upgrading to contactless and touchless features in the workplace. The majority are transitioning to create contactless (or at least low touch) office experiences as it becomes the new standard for the health and security of their employees,” Corpus continued.
Indeed, digitization of the real estate industry created new uses and changed the landscape for current players. A majority of 90 percent of real estate marketing is initially done on the Internet. Recent and existing players have to adapt to market development, adopt emerging processes and embrace new technologies while reviewing their offers and real estate business model.