What comes after Fintech? Real Estate Tech: Investment up 50% on the previous year
While the revolutionary impact of technology on the finance industry (fintech) is well-known, technology is also in the process of changing the shape of the real estate business.
“Real estate tech” is an expression that has been increasingly heard in recent years. It is identical to fintech, in its emphasis on technology as the basis for the real estate business.
According to US research and data services group, CB Insights, investment in real estate tech was $1.7 billion last year, up 50% on the previous year. If growth continues to be this strong and vigorous, real estate tech is set to be a revolutionary sensation that matches fintech itself.
Real estate moves from analogue to digital
Real estate is universally renowned a being a highly “analogue” business. Although each country has its own rules and regulations, the real estate industry still has a stubborn “hands on” approach to the way it does business.
You could describe many of the property owners in the real estate business as technophobes. Showing someone round a property or negotiating a sale or lease – these processes require human effort and input, so the world of real estate still seems far removed from technology.
However, as times change, a new wave of reform is coming through, at least in the American property rental market. With stress over mortgages and the younger generation’s lack of interest in home ownership on the rise in the US in recent years, the number of people renting is forecast to increase by 4.2 million over the next 10 years.
Along with this, there has been an increased desire evident amongst consumers and property owners for a more efficient and effective way for buying and selling property. Real estate businesses like Zillow and Rent.com have developed online search and look-up capabilities for properties, while a succession of new cloud-based online real estate transaction businesses are continually appearing. As well as widening the market for property owners looking to sell, these significantly increase the number of properties that consumers looking to buy can browse through.
There are signs that the demand for using technology is now starting to shift from the individual level to the corporate level. As this shift takes place, however, the biggest benefit is that ultimately there is no change to the actual consumer.