Real estate is the largest asset class in the world (Wouda et al. 2019).
The worldwide value is approximately USD 227 Trillion and it is one of the last industries to embrace information systems and technological efficiency (Baum 2017). Residential property is overwhelming the largest subclass of real estate with an approximate value of USD 168 trillion, making up the majority of the overall market. The second-largest resource class in real estate is Commercial property, which totaled USD 33 trillion.
PropTech is short for Property Technology and describes all things related to the digital transformation related to the real estate sector. PropTech provides an opportunity for business visionaries to digitally transform the inefficient and archaic systems that exist in real estate today (Feth and Gruneberg 2018).
PropTech will improve customer relationship management, reporting, system controls, information systems, integration, and all operational activities and processes, ranging from construction management, management of the property, and management of realty agencies, agents, and financial transactions.
PropTech will move forward from the inputs of a wide variety of talent, and Feth and Gruneberg display the interconnections between the various overlaps and subsections of PropTech as below in Figure 1.
North America and Europe have well developed real estate markets, however, developing economies such as India may embrace PropTech more rapidly out of necessity, land transactions are forecasted for continued rapid growth throughout the coming decade.
Rhomberg (2019) believes the real estate industry to moving rapidly and that if you are in PropTech and care about copyright you do not believe you are fast enough and say, “Copyright is for losers” and if we want to improve we must change the way we think.
If Rhombery is correct, PropTech improves investment returns on the world’s largest asset class in the not so distant future.
References:
Baum, A., 2017. PropTech 3.0: the future of the real estate.
Feth, M., and Gruneberg, H., 2018. Proptech-The Real Estate Industry in Transition. Available at SSRN 3134378.
Rhomberg, H., 2019. New Models of Construction & Real Estate. Real PropTech Available at https://www.coincenter.org/education/advanced-topics/multi-sig/ (Accessed 28 July 2020)
Wouda, H.P. and Opdenakker, R., 2019. Blockchain technology in commercial real estate transactions. Journal of Property Investment & Finance.