The use of technology to solve challenges has become common-place, even in the real estate sector. In Asia, Proptech (property technology) is on the rise and many startups are now focusing solely on these technologies. They have begun to outpace their counterparts in the west, with 179 of them raising around US$4.8 billion in funding since 2013. This represents about 60 percent of proptech investment worldwide.
So what does this mean for Asia?
This article is dedicated to answering this question. These are the ways that proptech will accelerate growth in Asia.
The rise of Blockchain, VR and more
With so many proptech startups coming into the market, companies have begun offering value-added services by using new technologies, to make their platforms more attractive. One such technology is VR, which allows the home-buyer the ability to view a number of different properties all in one location. This saves time for clients, agents and landlords alike.
Another example is Blockchain, which is often linked with cryptocurrencies. However, blockchain holds potential beyond cryptocurrencies like bitcoin and litecoin. Blockchain has the ability to make “smart contracts” which can help you exchange and transfer money, property, shares, and anything else of value in a transparent way while reducing human involvement.
Digitization of existing proptech
Presently, most proptech startups in the Asia-Pacific region serve as a channel for brokers, property owners and buyers, the most common being list and search type startups like iProperty or PropertyGuru.
However, as these marketplaces grow, they will most likely expand into processes that support other avenues such as sales, marketing, and customer relationship management (CRM) tools.
With the advent of Smart houses, the next step to take is towards Smart Cities. Initiatives for smart cities are already being implemented worldwide and the Asia-Pacific is in the forefront of this trend. These cities embrace change and turn to non-traditional options as they seek to solve issues arising from rapid urbanization. Smart cities would prompt the development of smart-property development and management. Proptech companies that specialize in fields such as IoT (put link to internet of things article) and big data will take the lead in helping real estate players evolve their operating models.
More startups and companies interested in Proptech
More funds have been directed towards the development of Proptech in recent years, with real estate players realizing how much potential proptech holds. And so these same players have begun helping its growth via corporate venture capital.
Many established companies have begun to involve themselves with startups as they realize their usefulness in keeping up with proptech developments.
An example of this is when Singapore’s leading property developer CapitaLand announced that it was setting up a US$81 million Proptech startup fund. Another example is Australia’s Esho Ventures’ US$850 million fund, which focuses on the landlord-tenant relationship, construction technology, and the impact of millennial lifestyles on the real estate market.
Proptech may be more established in the west; even so, the ASEAN region holds much more promise in terms of innovation and adoption for the near future. With the proptech market growing every day in Asia it is not impossible to consider that this region will soon become the proptech hub for the world.