From virtual reality (VR) and drones on development sites to blockchain for mortgage valuations, this is how some of the property industry’s leading technologists see the path of PropTech in 2017.
Wider adoption of virtual reality in design, construction, sales and letting
The use of VR in property is already a $1 billion industry globally, and Goldman Sachs estimates that it is set to treble by 2020. One widely publicised use in 2016 was in sales and marketing in the prime London market, where investors often live thousands of miles away from the properties they want to view.
On the development site VR is the next phase of Building Information Modelling (BIM), which enables development teams to enhance the way they use geometric (computer-aided design) representations for a more immersive experience through detailed renderings, practical animations and, more recently, virtual reality walkthroughs.
“I’m optimistic that 2017 will be the year where we start to see just how powerful augmented reality can be; not just as a marketing gimmick, but as a means of delivering faster and more accurate data,” said Savannah de Savary, founder Industry Hub.
From a VC investor’s perspective the emergence of VR headsets, interactive hand controllers and movement sensors set to revolutionise how designers, contractors and end users experience the construction process is appealing.
“There are a number of promising companies already active in the virtual reality space. I hope in 2017, with the dropping cost of headsets, we will start seeing a wider adoption of VR in the construction, property design, sales and letting industries,” said Eyal Malinger, investment director, PropTech lead, Beringea.
Use of blockchain to become increasingly prevalent in the property industry
2016 also saw widespread commentary on how BlockChain could change the property industry, with Bank of China and HSBC announcing they’d be among a group of lenders aiming to launch mortgage services in Hong Kong using blockchain. Causing a buzz this year, it was top of the PropTech predictions list for many.
“I think we will see a lot more blockchain startups in PropTech. Blockchain will be the technology with many experiments in 2017 and a possible breakthrough in 2018,” said Wouter Truffino, co-founder Holland PropTech.
Sharing his views on another potential investment hotspot in 2017 Malinger, Beringea’s PropTech lead said:
“Blockchain and property, often referred to as a match made in heaven, has been showing promise for a while, and I’m hopeful that this year we will start seeing some real traction beyond early pilots.”
Drones to disrupt construction and conveyancing
With VR and drones entering the construction process, 2017 could be a big year for construction tech:
“2016 has been such a busy year but I expect it to be even bigger in 2017. I also expect to see a lot more of a push in two core areas; Conveyancing and Construction. Much disruption is needed here and they are both huge subsectors of the property market which we desperately need to improve. Expect some interesting and perhaps controversial innovations” said James Dearsley, PropTech communicator and founder of The Digital Marketing Bureau
One of those may well involve drones. The potential uses for drones in construction are many and include drones scanning sites for condition surveys, dilapidations surveys, defects appraisals of roof areas and more.
“The mapping power of drones; especially for surveying and interactive construction management will be one to watch closely,” said de Savary of Industry Hub.
Technology will move from fringe to mainstream
At the recent Estates Gazette PropTech Summit Juliette Morgan coined the term ‘PropTech indigestion’ as a natural by-product of a changing market. And many see 2017 as a potential turning point for the role and relevance of technology in the property industry.
Whilst technology has been impacting property for many years it’s clear 2016 saw it rise up the agenda. For Dan Hughes, RICS News director & PropTech lead, 2017 could be the year where companies without technology on their agenda start to slip behind.
“Whether large technology companies, small startups or Governments there is increasing awareness and thinking about how technology will fundamentally change property in the coming years. In 2017, this will continue with technology slowly becoming seen as part of the sector, rather than something new and I think that we will see some of the companies that have been working in this area over the last few years start to really move away from those that have not.”
For Eddie Holmes, producer of the PropTech Podcast and founder of PropTech Consult, “The pace of innovation is likely to increase. Emergent technologies such as blockchain, artificial intelligence and augmented reality are yet to truly make their marks but, when they do, the effects will be transformative. The property industry will be unrecognisable in 10 years’ time.”
But that’s not to say 2017 will be a year of radical change. . .
“PropTech, in it’s current form, is still in it’s early days and I think 2017 will be the year where the good ideas of yesterday transition into good businesses of tomorrow. It’s taken longer than people had anticipated for the market to adopt to new technologies, but there is now evidence that change is slowly being embraced.
2017 won’t be the year when PropTech fundamentally changes the sector, rather, it will be the year where it moves from the fringe into the mainstream,” said Michael Marciano MRICS, Founder & CEO, Shared Property Data
To sum up 2016 and looking forward to 2017 Hughes tempered expectations of transformative change with the wise words of Bill Gates:
“We always overestimate the change that will occur in the next two years and underestimate the change that will occur in the next ten. Don’t let yourself be lulled into inaction.”
Looking to the next ten years, Eddie Holmes puts our expectations in perspective: “Whether it is financing, managing or selling properties, the traditional industries are unlikely to ever be the same again.”