Blueground seeks to explain how the ongoing pandemic has fueled Proptech disruption as more real estate and property companies adopt technology to stay afloat in these unprecedented times. Read on to find out why the proptech industry is gaining when others are struggling.
For quite a long time, the property industry lagged behind as other industries such as fintech quickly exploited technology. This slow growth cannot be attributed to disinterest from technology companies to venture into the property market. Technology companies have been at the heart of property from around the same time fintech began to take root.
However, rigidity from players in the property industry to adopt change has seen it fall behind when it comes to technology integration. The surge of vacation rentals revitalised by Airbnb, has driven more tech-dependence. There has been further acceleration thanks to an unwelcome visitor – the Covid-19 pandemic.
Continue reading for more insights on how Covid-19 is accelerating the adoption of technology in the property market. But first…
What is PropTech?
PropTech refers to technology-centric companies or services whose purpose is to facilitate the operation of property related businesses. These companies offer a wide variety of services from identification of opportunities, planning, financing, leasing or selling, and valuation to general management.
A good example is Blueground, a real estate tech company that provides furnished apartments in many cities in the world.
PropTech disruption: How Covid-19 is fueling real estate industry growth
While the Covid-19 pandemic has altered life as we know it, it has become a blessing in disguise for tech companies in the property market. The ban on physical interactions by most governments could not have come at a better time for the PropTech industry.
Service providers and clients have had to find alternative ways of doing business. For the property industry, this has meant breaking old age traditions and adopting modern methods of doing business. The effects of Covid-19 on the growth of PropTech cannot be downplayed.
The following are a few reasons why the PropTech industry is rapidly growing at a time when many businesses are folding up.
To curb the spread of Covid-19 in workplaces, most companies have been forced to have their employees work from home.
In some countries, governments have made work-from-home a mandatory directive for all non-essential workers. This forced companies and service providers to find new ways of staying afloat.
While PropTech ventures have been around since 2002, their role has been a supporting one. The work-from-home policy has seen an increase in the number of PropTech start-ups. Moreover, it has fueled rapid growth in existing ones as real estate companies seek to remain relevant in the new environment.
Similarly, clients looking to buy, lease, or rent have been forced to turn to online searches for answers.
In a snowball effect, these minute behavioural changes are becoming the accepted way of living. More people are finding it easy and convenient to engage with property companies from the comfort of their homes.
Even in a post-Covid era, PropTech is still expected to be at the forefront of property management, thanks to the convenience it has brought to the industry.
Traditionally, the real estate industry has been heavily reliant on physical meet-ups and lots of travel. This was no longer an option when travel restrictions were put up between countries and within countries. As such, it meant that practices such as land prospecting, house hunting, financing, valuation, selling and buying of houses, and general property management moved to the virtual world.
As the world slowly returns to normalcy, PropTech companies continue to ride this wave and do not show signs of letting up any time soon.
Social distancing regulations
More people are embracing the idea of a world with limited social interactions. Practices such as open houses and site visits are becoming rare or are being phased out altogether.
In their place, futuristic advances such as virtual reality and augmented reality are taking the world by storm. PropTech companies have taken full advantage of these technologies by offering their clients a convenient way to scout for properties.
Expect even more Proptech disruptions post-pandemic
The property market has been slow in adopting technology. It has taken a pandemic to spur the growth of PropTech companies. Measures taken by governments and businesses to stem the spread of Covid-19 have been a much-needed shot in the arm for PropTech business.
Even as the pandemic loosens its hold on people’s livelihoods, these companies continue to thrive as they benefit from the changes to the way the world works brought about by the pandemic.
The environment has handed PropTech start-ups a lifeline as they have become the go-to for consumers and investors alike. Furthermore, the future looks even brighter for the PropTech industry as more people fully embrace this new way of life.
As the world slowly returns to normalcy, PropTech will clearly continue being the modus operandi in the real estate sector.
Blueground is a real estate proptech company that offers fully-furnished and beautifully equipped apartments under flexible leases. With 4500+ properties spread across 15 cities worldwide, we are a leader in the real estate space. Whether you are a business executive looking for a short-term rental or a travel medical professional seeking a move-in ready apartment near leading hospitals, we have you covered. Contact us today for a free consultation.