The real estate sector has always enjoyed strong confidence. Pakistani people have always considered land to be a safe investment, be it residential or commercial. The sector, in its recent years, has also seen a positive influx of foreign investments, but despite such a positive sentiment, why is it that the potential of real estate has not been explored, and a stagnant phase with no significant peak has been the prevalent trend?
The lack of transactional transparency and security and little to no integration of technology have played a major part in discouraging the investors. This is where the current buzzword in real estate, “PropTech”, comes in.
PropTech – What is it?
PropTech is used to describe the wave of tech innovations that aim to disrupt the outdated real estate market. PropTech is the digital transformation in the property industry. It integrates technology and the shift in the mindset of the consumer. The attitudes, movement and transactions of the consumers involving buildings and cities combined with technology are what PropTech is.
It is also used to define startups offering technologically innovative products or novel business models for the real estate market. PropTech real estate has been the necessity to realize the potential of the sector and we have seen similar integrations of technology in other industries and the revolution it brought about.
The Question PropTech Asks
The necessity to streamline processes and facilitate participants in the various stages of investment in real estate is the foundation of PropTech. PropTech is being termed the evolution of real estate. The technology relies on its utility to the user and PropTech is so far proving to be beneficial.
PropTech spans across a spectrum of scale, ranging from home appliances to crowd-funding real estate projects. The integration of virtual reality and software systems that report repairs are an example of the horizons the real estate market is yet to explore.
VR (Virtual Reality) and AR (Augmented Reality) are being augmented to provide a virtual walk-through experience, and that is just the tip of it. The innovation in the field is relatively nascent due to PropTech gaining traction in recent years, and the applications of such technologies can be far and wide.
PropTech can be broadly divided into three major market segments:
In recent years, smart home appliances have gained fame with their brand names. Alexa and Google Nest are some examples of brands that have been fairly popular. These appliances fall under the umbrella of PropTech.
Digital platforms that monitor, manage or operate specific property assets are a branch of PropTech. These appliances have significantly improved various areas, such as reducing electricity bills and monitoring repairs. All such digital home assistants fall under IoT, the Internet of Things.
IoT is labeled as one of the most promising innovations in the real estate space. IoT is a collective network of things that includes people as well. The sensors in the appliances glue together the set of relations of people and things. This brings about the integration of AI, which enhances the living experience through apps.
With the globalization and accessibility of technology, a significant peak in interest has been observed in smart home appliances in Pakistan. Startups for the production of local smart home appliances is adding to the ‘smart home Pakistan’ brand.
Smart Real Estate
Smart Real Estate is defined as the technology that facilitates the processes involved with sharing or renting real estate assets such as land, offices, storage and apartments. The online aggregation of real estate has been a game-changer in strengthening the PropTech wave.
This, however, wasn’t possible without the digitization of land records, and verification of property and agents. The growth in data processing and storage has ushered real estate portals to greater heights.
Real Estate Fintech
With the notoriety of bitcoin, blockchain has roused a fair amount of curiosity. Blockchain is a part of fintech which brings us to the question, what is fintech?
Fintech refers to the integration of technology into offerings by financial services companies in order to improve their use and delivery to consumers. Applications that enable the selling and buying of real estate assets have reduced the concerns of lengthy paperwork and security of the purchase. The potential to transform the current real estate industry is crowned to Blockchain technology at the moment.
Blockchain will effectively counter the frauds and counterfeiting involved, inspiring confidence in the investors. Blockchain is a shared, distributed and unalterable ledger for recording any type of transaction. The inclusion of blockchain will lower the necessity of third parties.
This ‘Fintech PropTech’ fusion is what the experts are basing their anticipation of a real estate revolution on. This will further enhance the transactions made in the real estate sector by making them simpler and reducing red-tapism, which makes Fintech Pakistan an absolute necessity.
Pakistan and PropTech
PropTech, when talked about in the perspective of Pakistan, is a nascent concept. The integration of technology into the real estate sector is the need of the hour, but the concept is incubating and evolving day by day. The ordinary citizens of Pakistan are mired with confusion and insecurity in real estate transactions. The longevity of real estate investment is a popular belief among the people of Pakistan, but the lack of clarity, confusing processes and regulations do not inspire new investors, creating a monopoly. The lack of clear information on the property and false valuations by fraudulent agents, owners and developers have frightened the local people from investing in property. The solution to these issues are PropTech companies.
PropTech companies, despite being nascent, are making steady progress. Smart portals like Graana.com have utilized ‘big data’ to provide end-users with a comprehensive real estate system. Verifications of the listings, drone land surveying to provide realistic three-dimensional views remotely and providing a comparative cost of property and its future value, customers’ trends, and market inclinations are services that utilize PropTech.
Virtual and augmented reality are also being incorporated by some. Although the implementation at this point is quite limited as a vast majority is not educated on the subject. Prominent names like Artec, which have pioneered the integration of AR and VR, have been positively received, which is evident from the reception received on the work they did for Florence Galleria.
Pakistan, with its limited exposure to PropTech, is lagging in capitalizing from the potential of this market. The investor of this age is tech-oriented and there is a necessity to evolve and grow with the current global market trends. Pakistan can benefit greatly from incorporating PropTech and the market, currently valued by FBR at a rough $700 billion, can be tapped into.
The focus, however, has shifted in the right direction. Successful start-ups like Graana and Artec can serve as models to increase the focus on technology-inclusive real estate. The recent years have seen healthy progress in PropTech in Pakistan and it is set to soar and grow exponentially in the coming few years.