The property industry has a new buzzword – PropTech. And this is a good thing: in any dynamic environment, buzzwords make sure that market players deal with the topics involved.
Current important questions in our industry are: Has the digitalization wave also hit the property industry? Is the industry prepared for the digital age? Is the property industry being changed from within – or are external factors causing the changes?
What exactly is this “PropTech”?
At the spearhead of the movement are the PropTech startups. Since 2014, there has been a rapid development in the foundation of PropTech companies in the property industry. But what exactly is this “PropTech”?
These are “Property Technology” companies that, thanks to technological developments, optimize (sub) processes or business models as well as establish new business models. The majority of PropTech business models seen today in Germany focus mainly on pricing and transparency advantages for the accommodation service market. PropTech symbolizes a lot more. PropTech is a movement exemplifying a change of perspective in the form of user-centering going far beyond the application of (information) technology.
The basic question is: how can an established company approach this rapid development and benefit from it? When the waves hit, is it up to one person – the often quoted Chief Technology Officer (CTO) – to have the vision, to lead the team and at the same time take the helm? Good luck! A CTO and an isolated IT department are not going to make the digital transformation happen.
Welcome to the future!
Social Media, Mobile and Cloud Computing are already the standard in other industries. Our industry must also take this subject seriously. Stepping into the digital age requires new impulses, a hunger for innovation and courage to take business risks. Furthermore, communication and cooperation are the foundations for innovation and the driver for creativity.
The complex processes involved in a property and its value ultimately offer huge potential driving efficiency and automation. Technological advances are proceeding exponentially, the availability of ever-increasing processor power is expanding and new technology is being launched at ever-decreasing intervals. The aspiring generation, brought up in the age of rapid change and increasingly dependent on digital technology, place new demands on established companies.
It will be interesting to see if property industry players are open to innovation, or if they are able to develop a digital strategy hazarding the connected investing risks. The change from an investment-intensive industry to an information-intensive industry is already underway.
The true revolution has not even started.
Overview: PropTech Startups
- There are around 110 PropTech startups in Germany today.
- These can be subdivided into the categories Property Brokerage, Temporary Renting, Real Estate Agent Brokerage, 3D/VR/AR, Property Crowdfunding, Smartbuilding (IoT) und Additional Services.
- PropTech startups amassed the record sum of 1.82 billion Dollars worldwide in the first half of 2016.
The subject “Digitalization in the property industry” is also being dealt with at the EXPO REAL – further articles on this will be available shortly!