Tech-savvy customers are driving the property sector to be digital-first in their strategy, and in doing so, customers are more tech-empowered to make the right decisions in real estate investment.
The most profound influence that has driven this transformation comes from none other than the customer.
Today’s millennials, who have information at their fingertip, have underlined the need for a new business model that the property sector cannot ignore.
Dubai’s property tech real estate marketplace - Hod.co - directly connects property owners with buyers and tenants.
“Today, we are witnessing an amazing convergence of digital technology in the real estate sector. The property market is indeed at the intersection of several tech forces that together will define the future of how the industry evolves,” Cecilia Reinaldo, CEO of Hod.co, said.
Moreover, she said the digitisation of the real estate market has its roots in the evolution of big data and advanced data analytics that enable property companies to gain unprecedented insights on customer behaviour and aspirations.
Forces of digital change
Companies that have chosen to leverage this data and innovate are the ones that are making headway in property sales, irrespective of market challenges, she added.
However, she said that the forces of digital change, such as FinTech — powered by financial start-ups — Smart Cities, Smart Contracts driven by blockchain technology, ConTech — construction start-ups — and PropTechs — property start-ups — are driving fast-paced change that has underpinned the need for not just developers but every stakeholder to adapt, change, and evolve.
Simultaneously, she said the practical application of blockchain technology, reflected in the Dubai Blockchain Strategy that is embraced by Dubai Land Department as it moves to ‘smart contracts,’ which reduces the time for completing transactions, as well as advances driven by artificial intelligence, such as real estate robots, have opened up new opportunities for property sector stakeholders to enhance their engagement with customers.
According to the National Association of Realtors Research Group’s Real Estate in a Digital Age Report, 99% of millennials search online websites for property purchases, with only 56% visiting an open house, and nearly as many found their house on a mobile device.
Photos and online information about properties were more important to millennials, and nearly half of them reported that virtual tours are important in decision-making.
New ways to invest
Cecilia said that millennials are also exploring new ways to invest, such as through crowdfunding, and seeking ways to avoid interactions through middlemen.
Furthermore, she said that new FinTech platforms are offering options to invest in funds that enable investors to make a single investment and immediately own a diverse portfolio of real estate assets.
Property companies also using digital tools such as chatbots and the adoption of virtual reality and augmented reality to take potential customers through 3D tours.
In this changing market dynamics, she said that it is important for real estate agencies to adapt to the new models.
“They will need to focus on creating real value for customers, especially as peer-to-peer marketing takes the upper hand with only the buyer/seller or tenant/landlord transacting money as technology increasingly eliminates any third-party in the transaction,” she said.
Technology will continue to evolve, and customer expectations will keep changing as tools and resources get smarter, she said and added that the real challenge for the real estate industry is how quickly businesses can adapt and change with time and leverage applications for the benefit of the consumer experience.