The emergence of innovations such as artificial intelligence, augmented reality and the Internet of Things is changing the way we do business, and it has caught up with the real estate industry.
We are seeing the development of technologies relevant to specific industries. For example, financial industries are using fintech to build trust with clients and at the same time increase efficiency. The real estate industry is not only the oldest but the biggest of our business entities, and today, technology is about to disrupt it.
There’s a word for this kind of real estate technology. It’s called “proptech,” a technology developed specifically for the property market. Proptech brings together multiple different facets of the industry from planning and construction to the sale of a property.
Proptech platforms allow Realtors to remotely show presentation slides, but this is just one small part of what can be done with this technology. The platform also includes online services that transfer digitized documents to the cloud (which can then be digitally signed) and allow access to regulations pertaining to a particular property.
How proptech works
Devin Tu is the founder and CEO of MapYourProperty in Toronto, Canada. Tu’s company makes use of a digital tool that gives real estate developers a digital interface to access layers of important information about a property, including zoning bylaws and nearby proposals.
To show how the proptech app works, Tu described how it served one client. “We had a client looking at a site in North York that they thought was ideal. But then, they used our tool, which scanned 25 different regulations and checked developments in the area in real time,” said Tu. “It turns out they had missed a key floodplain regulation.”
Tu went on to say the client almost got stuck with a $10 million piece of property he would not have been able to develop. The area remains a parking lot today.
Regarding the developing trend of proptech, Tu notes that the recent growth of the property industry has come about because of necessity. There’s a shortage of land and competition is increasing, forcing realtors and clients to make quick decisions.
Property industry plays catch-up
Frank Magliocco, a partner at PwC Canada who specializes in the housing market, told Mortgage Broker News that the real estate industry has been historically slow to embrace new technology.
“I think what you’re going to see now is a fairly significant ramp up in embracing that technology once it becomes more mainstream,” said Magliocco. “It’ll be increasingly important to remain and be competitive in the marketplace. Once you see these technologies prove out, you’ll see more and more adoption.”
It looks like Canada is going to end up as one of the next major regions for property technology innovation. Besides MapYourProperty, several large Canadian organizations have made announcements of their move into the PropTech space, including Toronto-based Colliers International and Brookfield.