Property technology is set to rapidly change the industry this year. AI and Blockchain are helping to disrupt nearly every industry and, finally, virtual reality might have found somewhere it can be really useful. From automated property maintenance to virtual model architecture, here is how innovations in technology are changing the property markets.
(Side note: excludes disruptive business models such as Nested, the company that promises to sell your house within 90 days.)
Virtual Reality as a Property Technology
1. Virtual viewings
Virtual viewings are being used by a number of estate agent firms already to maximise the number of properties a client can view and to overcome the barrier for viewing properties from a distance.
Foxtons started showing clients around virtually in their Islington office in 2016, using a programmed Samsung fitted into a VR headset to display a virtual version of an apartment in Fulham Reach.
Strutt and Parker are working increasingly with occupiers, renters, investors, and buyers that live in other cities or countries and have overcome the distance problem primarily by creating 3D model walkthroughs that they embed in their online brochures. They are making the move into VR, using 360-degree image capturing to ‘take a client’s experience to the next level’.
2. Virtual architecture
Virtual Reality technology may also soon change the way properties are designed. The future for architects holds building 3D models from within their VR headset, allowing them to spot structural issues ahead of time and to get a sense of how a new build will feel inside before making significant progress. Further to this, in the luxury and commercial property markets, it is likely that architects will begin to design and build a virtual prototype, allowing them to get feedback and further tailor the final build to a clients liking.
AI as a Property Technology
Property management companies are increasingly using AI-powered chatbots to engage potential tenants and create additional sales.
Vera ChatBot from Truss allows tenants to connect with a virtual assistant throughout the office search process. Vera gathers requirements and, using machine learning, provides tenants with simple information and a list of office spaces that are supposedly most suited to their needs.
Another bot, Aisa Holmes by Structurely, is an AI-driven sales bot that ‘engages and qualifies your leads through messaging around the clock’. Providing a fast estate agent-free response to property-sellers questions is sure to improve sales.
2. Automated property maintenance
Property technology is also improving the property maintenance side of property ownership. Zenplace uses AI technology to give advanced notice of potential property issues and offer potential solutions. For example, the Zenplace tech can give advanced warning that heaters, water pipes or electricity systems are nearing the end of their life, and offer solutions to mitigate any issues before they happen. Not only does this reduce the cost for the property manager, but it provides a better rental experience for the tenants.
Blockchain as a Property Technology
Blockchain is the hottest technology at the moment. A virtually incorruptible digital ledger, Blockchain can be programmed to record any kind of transactions. The transactions made using the Blockchain are reconciled continuously in a decentralised database, meaning that any records are completely public, verifiable and very difficult to hack.
1. Smart Contracts
One of the potential ways that Blockchain may transform the property industry is with smart contracts.
Smart contracts are written in code and form part of a Decentralised Autonomous Organisation. Once a transaction is agreed, it is sent to a public ledger that operates on a peer-to-peer, open-sourced basis via multiple computers known as nodes. Each transaction within the network is characterised by a unique digital ID “block” after all information related to transferring the title, deed and associated contract(s) is validated. Once this process is complete, the data “blocks” are permanently placed onto the “chain” and the transaction is complete.
This kind of smart contract and immutable ledger can hold all deeds, mortgage information, property/land records and other data on a permanent digital record, and as a transaction is completed all transfers of ownership would be instant and perpetual.
One example comes from the HM Land Registry (who control the registration of land ownership in the UK). The body set out its vision for transforming the registry digitally by creating a simple, open approach to data. Using Blockchain technology, property could change hands instantaneously using a publicly available database.
Check out how Blockchain streamlines the property transaction process in the below infographic from PS Investors.
2. Tokenised ownership
Tokenised ownership could be the future of property ownership. Here is how it works:
Based on Blockchain technology, a seller of a commercial property verifies and lists his asset for sale. An SPV (Special Purpose Vehicle – i.e. a corporation set up for this specific purpose) is set up to solely own the property. The property is then split up into parts (for example, chunks of 1m squared) and then a token is allocated to each part. Individuals and investors from all over the world can then buy as many tokens as they want of the asset giving them fractional ownership. Once the entire property is sold, the tokens can begin trading on a secondary market at an exchange such as ATLANT, each of the owners receiving proportionate profit from rental income.
This is all made possible by Blockchain which guarantees the strong contracts and ownership guarantees of the virtual ledger.
So there we have it. A huge number of ways that technology is transforming the property industry. Have we missed any? Please let us know in a comment below.