Digital transformation is the shift that appears within the real estate industry due to the implementation of digital technologies. With the adoption of digital technologies, real estate players such as developers, brokers, agents, investors, or managers embrace skills and culture change to meet evolving customer demands. Real Estate is an industry that historically has mainly talked within itself from top to down. At the top of the tree always stood the Capital Markets. As no finance means no development. No company is safe from digital disruption, and the real estate business is no exception. Real estate has been a late adopter of digitization compared to other industries such as banking, retail, and healthcare. However, there are numerous applications such as virtual tours, automated transactions, and personalized services where digital technologies enhance the home buying experience while improving operational efficiency for real estate agents.
I believe that any industry can greatly benefit from a digital transformation. Since last year, digitalization of the real estate industry is expected to accelerate, as Covid-19 forces a digital transformation upon any industry, even the more conservative sectors that have been resisting it so far. In comparison to other industries such as banking, retail, and healthcare, real estate has been a rather late adopter of digitalization. However, there are quite a few instances where digital technology enhances the house-buying experience while boosting operational efficiency for real estate brokers.
Why is digital transformation is important in real estate?
According to the 2019 KPMG Proptech survey, real estate companies are rapidly adopting digital technologies. 58% of respondents have a digital strategy in place, up from 52% in 2018 and 2017. I would like to mention the reasons why digital transformation is necessary for real estate businesses are:
- Change in customer behavior and expectations: The way people search for property is changing. They prefer mobile or web searches rather than hiring real estate brokers. And customers increasingly initiate contact with brokers online. Therefore, the absence of a strong online presence means losing the chance to connect with interested buyers and sellers.
- Technology change: With the improvement of digital technologies such as automation, companies can improve their operational efficiencies.
The key to digital transformation trends/technologies in real estate?
- Augmented Reality (AR)/Virtual Reality (VR)
- Building Information Modelling (BIM)
- Apps that facilitate property search
- Smart Contracts
- Artificial Intelligence
The real estate industry in India accounts for 11.6 percent of the GDP and is expected to reach a market size of USD 1 trillion by 2030. The growth of this sector is well attributed to the rise in the corporate environment and the incessant demand for office space as well as urban and semi-urban accommodations. Like every other sector, real estate and the construction industry suffered a significant obstacle due to the pandemic and subsequent lockdown. As no site visits were possible, real estate developers & property brokers had to look for other viable options that would help them navigate through these unprecedented times. The swift adoption of digital technologies aided the developers to launch new projects and market their properties with a great deal of success. If we look at the positives, the pandemic played a crucial role in expediting the pace of digital acquisition in the real estate and construction industry. Moving forward, this transition will go a long way in revolutionizing the sale of properties in our country.
How would people out there get a clue that you have a business? A website can work out as the best marketing tool, which can be cost-effective and efficient. Only 51 percent of small businesses come up with their websites, although 97 percent of the customers look out for services online; a major gap to bridge. Technology is the key here. Digitalising has a twofold benefit for real estate developers. First, it allows them to tackle short-term challenges posed by the crisis and all that comes with it, and second, it increases their overall operational efficiency to help tackle future challenges.