The real estate sector is facing a series of challenges in Asian countries. Investors struggle with inefficient processes and outdated protocols in the real estate sector, even in mature Asian economies. However, recent developments and wider adoption of proptech (short for Property Technology) are due to save the sector and eliminate the challenges faced by investors and real estate property owners.
With a wider technology and smartphone penetration in the Asian countries, the developments in the sector are mainly carried out from the region – thanks to a growing number of proptech unicorn start-ups.
Mature economies in the area already have high rates of technology adoption and, thus, an easier time in integrating and advancing in a new and intricate sector. Singapore, Japan and Hong Kong already pride themselves on higher transparency rates and streamlined processes, thanks to proptech. However, to grasp how proptech is aiding further development in the industry, we have to first analyse the concept and how the Asian market is adapting to it.
Proptech – What Is It?
Although it’s certain that this new technology will help the real estate industry and investors in their investments, a single, unanimous definition cannot be attributed to the concept. A wider-shared opinion of the concept’s definition is the following: the digital transformation of the real estate sector, with regards to both the investors and consumers and incorporates changes of mentality, movements and transactions that involve cities and properties.
Although the concept can be seen as vague, the entire real estate sector in those geographic areas with high adoption rates of this particular technology is transformed to its core. Both the commercial and construction aspect of the sector is transformed, and the smart city seems to play a huge role in the process.
In this context, entrepreneurs, investors and tech start-ups are eager to improve and perfect this technology, especially in the economically-developed Asian countries. Below are some main change-drivers in the region all investors should be fully aware of, to keep up with the latest developments.
VR and Blockchain fuel the change
Virtual property viewings, smart listings, these both change the way the real estate sector in Asia is meeting consumer needs and demands in a fast and advanced fashion. Real estate listing platforms have changed the way they present information and properties to make them more attractive and boost their added-value service efforts through technology.
Using VR technology, real estate investors and realtors can showcase some of the best features of their properties. Virtual property tours are due to add to the user experience. Clients no longer have to waste time and resources to physically view a property, thanks to VR. Investors, sellers and landlords are now provided with more opportunities.
Another technology that is due to contribute to a smoother transition to proptech is blockchain. Today, blockchain has become synonymous to cryptocurrencies, but the term holds more potential than this. Today, thanks to blockchain technology, we enjoy smart contracts, money exchange, property, shares and any valuable exchange transparent and safe.
Besides, these technologies can be easily implemented in property and city construction as well, especially in affluent eastern economies. According to Dorian Barak, “while “smart city” is often treated as a buzzword in Western markets, in Asia the term serves as a blueprint for projects as far afield as the futuristic planned city of Neom in Saudi Arabia and the Smart Nation urban planning programme in Singapore. For proptech, this provides an unparalleled entry point to grow on the back of Asia’s accelerating and tech-friendly construction boom.”
The fast-growing markets in Asia and the Gulf as well, are rapidly implementing and embracing similar technologies, since these are due to answer to some of the most severe challenges of the region.
Deeper digitalization of existing proptech
Currently, those proptech start-ups in Asia Pacific countries tend to focus on vertical leasing and brokerage. However, these marketplace start-ups seem to mature at a fast pace. Growing from property search start-ups to brokerage and rental management, these start-ups reinterpret their approach by including sales, marketing, CRM and cooperation tools into their platforms.
The growth of smart cities
Smart cities are being built all over the world, but the Asia Pacific is leading the game, together with cities in the Gulf. Instead of trying to solve the challenges of the industry by using traditional tools, proptech unicorns are coming to meet investors’ and developers’ needs through advanced pieces of technology designed to boost transparency and aid smart-decision making processes.
Smart cities need smart property development and management tools and the emerging proptech start-ups are able to meet these needs with accuracy. These start-ups and their products facilitate the data-driven nature and implementation of new types of cities. New technologies use extensive data collection and analysis, as well as interconnected ecosystems to create the perfect type of city that meets the needs of both investors, constructors and, why not, consumers.
A change in consumer behaviour
A main change driver in the Asia Pacific is the Millennial density found in the region. Approximately 60% of the global Millennial population of the world lives in Asia. Since this generation is using technology to get all their information, it has become natural for them to use it in the research process when searching a home or a rental. While there are certainly more developed and advanced countries in the world in terms of proptech use and adoption, the region here holds a huge growth potential thanks to the big Millennial ratio present here. To come in their needs and adapt to their purchase and research behaviour, investors, constructors and realtors have to keep up with this generation’s keen use of technology and their insatiable need to for accurate information, on the go.
Proptech is a sector with immense potential in emerging markets. The Asia Pacific and Gulf countries hold an impressive innovation and advancement potential, thanks to a growing number of tech start-ups, eager to concentrate their activity on this niche.
Disclaimer: This content does not necessarily represent the views of IWB.