Technology and its Impact on the Real Estate Industry
Technology and its impact on the real estate industry
The real estate tech sector is slowly being redefined by ever-changing market conditions and shifts in consumer behaviors. As Peter Williams, CEO Deloitte Digital, said “Real estate agents will not be replaced by technology but by agents with technology”. The real estate industry will not be replaced by a single technological solution, but rather the changes in the industry will be enabled by technology and the leaders will be those that embrace it. The solution will not be found in the acquisition of hardware but in the adoption of innovative solutions that will largely be software solutions, applications and platforms.
The Kenyan real estate industry continues to expand as investor appetite grows alongside the customer base. While this is happening, change is inevitable for any real estate company that wants to remain competitive. The shift towards real estate technology cannot be ignored anymore. As the industry evolves, individual companies will fight to become undisputed leaders by offering solutions such as renewable energy and smart homes that are beyond real estate products and services, in order to have a tight grip on customer loyalty. As technology and innovation continue to shape the real estate industry, emerging real estate tech
companies are creating an opportunity to become leaders in the new digital real estate ecosystem. Some of the key areas to focus on for Kenyan real estate tech companies are highlighted below:
Big Data: From driving business decisions to creating better consumer experiences, big data can have a lot of influence on your business. Many real estate businesses collect a lot of data that sit in silo repositories without any analytics being done to pick out industry trends or behaviors of their consumers. Real estate companies wanting to target the right clients need to know who they are, when they want to buy, where they are, and how they can reach them in the most effective manner. Harnessing big data is an invaluable tool in targeting the right buyers and an important element in refining the real estate process. Real estate companies like Bowery, Enertiv, Coldwell Banker amongst others are
harnessing the power of big data to be able to target their clients with the right products and position their products in the most effective manner.
Machine Learning and Artificial Intelligence: Artificial Intelligence (AI) and Machine Learning is the art of computers teaching themselves on how to improve the way they perform their tasks based on previous experience or through pattern recognition. Such systems are in use by real estate investors to effectively control expenses, manage risks and gain higher returns using algorithms that are designed to predict and factor in individual investor concerns. Real estate search analytics is improving the way prospective buyers are matched with desirable properties, amplifying the broker’s labor.
Some of the AI tools in use include chatbots to automate answering of frequently asked questions, investor analytics that sets income and growth goals and monitors through an intelligent robot as well as loan default predictors that are able to access risk and focus on profitable investments only.
The Internet of Things: The Internet of Things (IoT) is a key component of home automation and smart homes. This involves automating the ability to control items around the house from curtains to electricity with a hand-held device or voice command. Smart home technology has started changing the way home-owners view property. It is becoming a game changer for real estate developers in Kenya. Instead of selling a shell for a house, developers are enticing buyers with internet ready homes. It is also anticipated that there will come a point when real estate agents use IoT for home searches. The practice of consumers going online and pecking their way to their perfect home will be replaced with voice-driven applications embedded on phones, that are able to automatically answer any questions they have.
Building Technology: With the increased demand for low-cost housing with less impact on the environment, real estate developers in Kenya are left with no choice but to consider innovative ways of building houses. The areas of focus include using prefab building material and modular construction where a building is constructed offsite and then assembled onsite. In 2014 Winsun, a company based in China pioneered a 3D printed house. Compared with the traditional construction methods, they were able to save up on 80% of the construction costs and 60% on labour. This are just a few of the innovative ideas that real estate companies are exploring globally in order to reduce cost.
Augmented and Virtual Reality: Virtual Reality (VR) enables customers to tour predevelopment or ready house units from anywhere in the world. Real estate developers, hoteliers and other businesses are using the technology to give their prospective clients a feel of the product virtually. Using real-time technology and devices, like the Samsung Gear VR Virtual Reality headset, real estate developers can show off the progress of the houses under development as well as completed units. Companies like BlackRhino VR in Kenya are commercializing the potential that VR holds in selling property developments both off-the-plan and finished. Through the power of virtual reality, they allow prospective buyers to walk through and experience the space even before construction has started.
Real Estate Operations Automation: To remain competitive, real estate companies have to look out for better ways to increase efficiency, differentiate and position their products and services as they build customer loyalty. With a robust back-office operation, the company can have visibility of a customer life-cycle from the time they were prospects till when they become landlords or tenants. Automating your customer relationship management, portfolio management and facilities management, the companies are able to address challenges such as cost efficiency and communication between different stakeholders.
Real Estate on Demand: This is a concept where potential buyers are able to access and extract value from their products and services instantly. Consumers are notoriously impatient and expect instant gratification hence demand instant delivery for the goods and services they use. Companies like Amazon, Google, Jumia and Kilimall have already invested in same-day delivery, that is already revolutionizing the supply and distribution networks. In Real Estate, startup companies such as Naked Apartments, AgentPair, and CurbСall are setting the pace. With their technology, they are able to connect potential buyers who want to prospect a home, with nearby real estate agents who are ready to take a new lead.
As real estate tech evolves, it’s certain that the industry is headed for a revolution. Real estate tech companies won’t necessarily disrupt the industry but will disrupt those companies that refuse to embrace the change. Investing in technology as a real estate company is a key differentiator moving forward and that’s the reason Cytonn Technologies keenly looks at using technology to differentiate the various offerings by Cytonn Investments amongst them
Here are the ways in which one can embrace technology:
1. Automate your back-office operations. This will enable you to collect data about your clients. There are simple customer relationship management and property
management tools that you can subscribe too and start using immediately.
2. As you collect more data, invest in business analytics that will pick out trends in your consumer behaviour. This in return enables you to target the client with the right products and services and reduce marketing efforts to the wrong market segment.
3. Invest in technologies that make it easier for your potential investors to make
decisions about which of your properties to invest in e.g. Real Estate Simulators as
well as those that differentiate your properties from the traditional four-wall houses e.g. Smart Home solutions.
The writer is the Business Manager for Cytonn Technologies