While the real estate sector saw fragments of digitization over the last decade, it is the pandemic that effortlessly wove it into the sector. The use of technology has grown by leaps over the last two years in the sector, penetrating various aspects. This also comes at a time when technology is a major driver of India’s economy. With the country’s vision of a USD1 trillion digital economy over the next five years, the real estate sector will reap immense benefits from large-scale digitization.
Something that was considered ‘good to have’ pre-pandemic is now becoming a requisite. There is no denying that stakeholders in the sector need to embrace technology to remain relevant. It is not just online marketplaces anymore, but technology is now penetrating to all aspects of the real estate sector. Developers, property owners and office occupiers are also pushing boundaries to incorporate technology across the spectrum.
The Rise of PropTech
‘PropTech’ has become a popular catchphrase in recent years. It encompasses technology of all kinds to re-imagine the core processes and business models of real estate. The goal of PropTech is to make owning, leasing and managing real estate more efficient through digital transformation.
So far, PropTech in India has been largely limited to residential marketplaces and a few entities dealing in commercial real estate, while largely focusing on listing residential and commercial properties. However, with technology infiltration, stakeholders across the real estate spectrum are now reimagining existing processes and norms, with technology paving the way for the buildings of the future.
PropTech is expected to grow significantly over the next few years led by ease of transactions, transparency and advanced technology. The technological advancements adopted by PropTech players are predicted to create a digitally driven sector and sustain its pace in the longer run.
Technology in Construction Management
The construction process is largely fragmented due to the multiple stages during a project lifecycle. While the adoption of technology by developers has been low, developers have been more open to integrate technology at various stages of construction, over the last two years. Overall, this is improving the quality of construction, reducing the time taken for construction and elevating efficiency of construction technologies.
Smart construction materials such as smart concrete, memory steel, nano materials, self healing concrete, concrete canvas, electrochromic materials have evolved with technology over the years. These materials can achieve a controlled, predictable, variation in one or more of their properties as a direct response to the change in the environment. Construction using such materials, involves higher cost as compared to traditional methods, however it reduces operational cost significantly.
Technology in Property Marketing
Technology is playing a pivotal role in the residential segment, by facilitating owning/renting property starting from the initial screening to closing a deal, in a seamless manner. The emergence of technology-driven platforms is making the residential sector more transparent, and approachable for homebuyers and sellers alike. Technological intervention can provide a one stop solution for landlords, tenants, investors, brokers for selling/buying of residential properties.
The Way Forward for Real Estate Sector
The benefits from technology have been wide ranging as seen in global markets from achieving greater efficiency and incurring lower operational costs to building climate-conscious buildings. Full-scale digitization can help the construction sector generate cost savings of about 12%-20% annually, as per the World Economic Forum. Research states that technology-led green buildings can lead to operational cost savings of up to 37%. Stakeholders in the sector need to look beyond. The focus must shift from ‘Can the initial investment in technology lead to enhanced returns?’ to ‘How can technology create value to the business?’
Overall, technology is now primed to revolutionize all facets of the real estate sector. With ESG (Environment, Social and Governance) being at the centre stage for various stakeholders, new technology tools are emerging that provides companies with critical insights to streamline the ESG targets. In the next few years, technology will upturn the Indian real estate business, bringing in efficiencies and creating a more transparent sector.
For more information read the full report on, “Real Estate 3.0: Technology-led Growth”.