Proptech is one of those buzzy portmanteaus that has edged its way into common vernacular – and one we’re proud to apply to our business. Similar to fintech, meditech or edtech, it’s about as straightforward as the name suggests: it’s the technological evolution of the property industry to meet the changing nature of how users experience real estate.
As Australia’s largest asset class – worth upwards of an astounding $7.8 trillion – it’s no wonder such an influx of tech-focused businesses like ours has infiltrated the real estate market. The current line-up of Australia’s more than 270 proptech companies is vast and diverse, encompassing everything from property listing aggregators and agile project management software to sophisticated AI ventures. To maintain an edge in this highly competitive area, we’ve established numerous verticals across several technologies to establish ourselves as a multidisciplinary proptech company.
Despite the legion of enterprises, proptech is still relatively young. It’s only in the last five to ten years that it’s really taken off in Australia; between 2013 and 2020, the community grew by 428 percent. And while not every venture is a start-up, the majority certainly are: the core philosophy of proptech is to disrupt the perennially conventional industry.
What is proptech?
The way that users – be it renters, owners, real estate agents, property managers or builders – interact with property is shifting. The preference for digital consumption and the increasing need for streamlined, user-focused tools means businesses need to rethink how they interact with these users and evolve with changing patterns of behaviour. That’s where proptech comes in; it’s designed to transform old processes and functions across buying, selling, renting, property management and construction.
Proptech is highly varied, spanning a number of technologies. The most obvious is the digitisation of property listings. As well, there are innovations designed to enhance the role of real estate professionals, such as construction project management and cost estimation tools, rental negotiation platforms intended to facilitate mediations between owners and renters, and virtual home tour software armed with 3D cameras. There’s also an influx of proptech companies focused on big data and machine learning innovations that can support and even improve existing processes, along with digital design to enrich user experience – technologies we’re keenly embracing to get ahead of the curve.
Why real estate?
Something we’ve long recognised – and a fact that is widely echoed – is that the real estate industry deserves a shake-up. It’s one that’s steeped in tradition and, next to other fields, has been comparatively slow in adopting new technologies. A 2016 report by McKinsey found that the real estate sector was spending less than 1 percent of revenue on innovation, while the automotive industry was spending 3.5 percent and aerospace 4.5 percent.
Today, there’s so much opportunity for technology to revolutionise the way the property industry works.
Technology provides expanded reach
Several digital tools – such as property listing aggregators and virtual tour software – make it easier for real estate companies to reach a wider audience, expanding the pool of potential buyers, sellers and renters. For prospective vendees, it means they can review properties remotely; there’s less need to be on the ground. This is something we’re keenly aware of and acting on, given the fact that many of our clients are overseas or interstate.
It can save time and energy
Numerous tasks in real estate consume a lot of time and energy. With the emergence of automation and the digitisation of several key components of purchasing, selling, renting and property management processes, real estate professionals can remove many of the more menial tasks and instead focus on the human aspects of their job, like client experience. Certain innovations – such as property and construction management platforms – also make it easier for real estate professionals to juggle multiple clients or projects.
It creates a better, more transparent experience
The core purpose of proptech is to optimise certain procedures and create a better, more efficient experience for all stakeholders. Naturally, the ease of using digital tools and the focus on concepts like UX means a more user-friendly way of dealing with situations like settlement, mortgage brokerage and property management. Through advancements like chatbot technology and property maintenance software, there’s an obvious improvement in communication and interaction between owners, renters and property managers.
Plus, the fact that information and operations become digitised means it’s easier to retain and refer to records. Processes inherently become more transparent, creating a straightforward and accountable experience for all stakeholders and an active role for consumers. Effectively, it has the power to potentially make traditional real estate procedures more democratic.
It offers greater accuracy and insight
Big data offers the opportunity to collate and analyse colossal volumes of information. With such breadth and depth, it makes sense that buying and selling decisions can be better informed. Additionally, machine learning and other artificial intelligence tools focused on tasks like construction cost estimates, property appraisals and projections can improve the accuracy of human estimations. (It’s worth noting, though, that we don’t see the advent of big data and AI/machine learning as a means to replace the role of real estate professionals. At Milk Chocolate, we’re developing mechanisms to instead complement our team’s work.)
Moving forward, Australia’s proptech landscape will only continue to evolve and grow. No doubt, an increasingly advanced array of technologies will eventuate to truly bring the real estate industry into the future – and we’re thrilled to help lead the charge.
Get in touch to find out how we can help you with your property journey.
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