If someone asks you a question you can’t answer, do you immediately ask Google or Siri to find the facts? Technology has become an invisible and integral part of our everyday lives. With on-demand access to virtually anything in the palm of our hands, it is almost as if technology is becoming a sixth sense. Virtual, augmented and mixed reality have pushed technology into a fourth wave, following on from the advances of personal computers, the Internet and mobile.
This is not just a personal issue – it is also reflected in industry; with ongoing changes to organisational culture and the birth of FinTech, ConTech, LegalTech and of course PropTech. But whilst slick buzzwords will always be around, is the real estate industry reaching an end of its honeymoon period with PropTech? The consensus amongst much of the Real Estate industry is that we are coming to peak PropTech. The market seems saturated with ‘solutions’ to problems we weren’t sure that we had, and gimmicks that promise to aid automation, but are facing very low adoption. We are going from “What is Proptech?” to “Why use Proptech?”.
A recent PropTech survey conducted by Trident and the RICS found that 95% of property firms want to adopt PropTech, but only 59% of them have actually done so, possibly suggesting that there is too much around for the appetite. The main reasons for its avoidance also support this argument, including a lack of clarity on the benefits, a deficiency of knowledge and training, and cost. This discrepancy between best intention and reality was also found in our recent survey on client portals, with one respondent citing a 93% difference between clients with portal capabilities and those actually using them.
There appears to also be little correlation between the number of times blockchain gets mentioned at PropTech events and the number of people who actually know what it means, which further suggests that PropTech is just a fad.
Are we looking at this the wrong way? Are we being, dare I say it, too binary?
Lots of small problems have been solved so far by PropTech, but there’s still plenty of room for a major industry breakthrough. Much of the conversation around the changing role of the Chartered Surveyor focuses on future state and how it’s ‘due’ to be affected, but, as yet, there is little evidence of it actually being changed. How can expectations be of future progression if we’re at the peak?
Valuations and investment appraisals are already starting to become automated through tools using machine learning and algorithms, such as Dashflow. Efficiency gains are beginning to be seen by many Landlords who are now using VTS to help manage their asset and leasing data. We’ve also seen the rise of online agency portals such as Hubble; a driving force behind a trend that is seeing traditional commercial property agents quickly becoming obsolete, particularly given the growing number of SMEs and subsequent shorter commercial leases.
The relatively low adoption rates of PropTech tools is more of an indicator that people amongst the industry need to catch up with technical capability, as opposed to being evidence that we’ve reached the peak. Until the industry as a whole is able to accept and utilise these advances to their full potential, bigger inefficiencies will remain unsolved.
If technology is beginning to defeat humans in the battle for Real Estate and property professionals can’t quite keep up, then surely PropTech will need to act as the peacemaker. With smart buildings like the Edge in Amsterdam, point-cloud technology for sites and blockchain being used for Land Registry data, it is evident that the fourth wave has had a disruptive impact on the Real Estate sector. Yet, we still have a long way to go before technology can start to feel like a sixth sense amongst property professionals.