Trends are an ever-changing phenomena, whether it’s the fashion industry, music, business, technology, or real estate market. These shifts, however, may not always be positive for the respective genre. But in the case of real estate, things are looking up. As 2019 winds down and we head toward 2020, there is a strong movement toward real estate technology, known as PropTech.
Let’s take a look at PropTech and other fresh trends that are shaping the real estate industry.
1. Tech Companies Entering the Real Estate Sector
Global technological companies like Google, Apple, Facebook, and Amazon are redefining the way we work, shop, travel, relax and live. Recognizing the new opportunities, these companies are investing more in residential and commercial community development and housing construction.
Other tech companies are making their contribution in the software sector—Microsoft launched Azure Digital Twins and Airbnb their new initiative Backyard, while IBM is transforming the Port of Rotterdam and Siemens is creating their tech city near Berlin. All these developments are forcing the real estate sector to redefine and reinvent itself.
2. Increased Investment in PropTech
Recent research shows that the real estate sector has become more aware of the impact of modern technology, so it’s not surprising that there’s an increase in the number of PropTech solutions on the market.
For instance, in the European technology ecosystem, there’s been a record $23 billion in investments. The European software industry is growing much faster than the rest of its economy with London, Berlin, Paris, and Amsterdam as the leading and largest tech communities.
PropTech is wide ranging, including applications such as building information modeling (BIM), creative use of drone technology, big data, blockchain, and much more.
3. Green Is hot
Green is the hottest color of this year, so all the typically grey installations are making room for the green and plants. It’s been known for long how beneficial natural elements are and what a positive impact they can have on the overall well-being of people. From private residences to business offices, an abundance of natural light and plants play a crucial role as they help elevate moods, increase productivity, and improve living and working environments.
4. Alternative Forms of Housing
With the co-working concept advanced by WeWork proving to be efficient, the next logical step is co-living. With an ever-increasing number of people wanting to live in the city, there’s a rising discrepancy between available housing inventory and the fast-changing consumer preferences. As a result, 1 in 10 people live alone, the population is aging, healthcare costs are increasing, and the sharing economy is becoming very common.
All of these trends are opening up new opportunities for the development of alternative forms of housing such as co-living, which can additionally be supported by technology.
This trend is also encouraging many real estate companies to rethink their approach to serving clients in such circumstances. For example, the John Cook firm, Orange real estate agents in New South Wales, have been on the leading edge of embracing these recent changes in living arrangements.
5. New Technologies Are on the Rise
Technological developments do make our lives easier and cheaper, but what precedes it all is an investment into its research. So ultimately, it’s not about the technology per se, but more about the people involved and what they do with it. It all comes down to experimenting and learning.
The biggest trends on the market currently involve artificial intelligence (AI) and an increase in tools that allow the non-experts to take part in AI, virtual reality (VR) and the voice recognition technology. The latter has exploded on the market, where voice activated systems, voice-enabled devices, and voice-enabled virtual assistant systems are expected to be worth nearly $32 billion globally by 2025, according to Grand View Research.
In addition to this, according to the people behind the current master’s degree program in design for VR, experts are now anticipating that the impact of VR on our lives will soon be comparable to that of the Internet or smartphones. This development is offering hugely promising possibilities in architecture and construction.
6. Increasing Social Impact on Investment
For a very long time, real estate companies have centered their strategies on maximizing shareholders’ value but it’s become evident that this needs to be reconsidered. There is more pressure now on the shareholders to focus more of their attention on social issues such as climate change and economic disparity.
As a result, investors are increasingly shifting their focus on companies’ social and sustainability practices as it’s become clear that performance in these aspects can impact long-term social returns. Moreover, standards are being developed for which social, environmental, and governance issues have financial relevance to the real estate sector. As these trends develop, real estate companies have to reorient their strategies and bear in mind the overall social impact of their actions, both in the short and long term.
As the real estate environment is rapidly changing, leaders are paying more attention to vertical development and that requires innovation, creativity, imagination, radical changes in thought, and long-term vision. Maintaining the status quo isn’t viable so it’s necessary to reinvent the business and this means re-define, re-think, re-imagine and re-design.
This step is undoubtedly challenging as it takes a lot to break down the resistance, establish new leadership, reorganize, and venture into the unknown. This is where effective PropTech leadership kicks in as it can enable these processes by providing clearer vision and goals, making room for experiments, allowing people the freedom to think differently, and enabling them to communicate across borders.
The real estate sector is not immune to disruptive events, business cycles and economic recessions, but it does possess the ability to recognize the need for change and transformation. The key lies in investing more in talent, culture, as well as tech and ultimately making choices that concern the future and long-term development.
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