Can ‘PropTech’ increase property returns in a Covid world?

‘There’s never been a more exciting time’: 3 key trends emerging from a PropTech webinar

Can proptech increase property returns and productivity in a Covid world? This was the question posed by The Property Foundation to three leading proptech experts in a well-attended webinar hosted by Professor Graham Squires of Massey University on 7 September 2021.

• Following the publication of a research paper funded and published by The Property Foundation and authored by Professor Graham Squires and Dr Teo Susnjak of Massey University - Machine Learning for Real Estate and Housing Markets - The Property Foundation debate featured the insights of a highly regarded panel of speakers comprising:
• Carmen Vicelich: CEO Founder and Global CEO at Valocity
• Greg Dickason: Managing Director at Lexis Nexis
• Professor Toby Walsh: Laureate Fellow & Scientia Professor of AI School of CSE, UNSW Sydney

Three key themes emerged from the session:

1. Technology is transforming the world of property

The rapid acceleration of digitisation and automation is shortening processes across the property sector. Aided and abetted by the Covid pandemic, everything is accelerating, with digital connectivity, robotic technology and machine learning enabling not only the great Work From Home debate but also:

• Reducing the carbon footprint of buildings, becoming smarter through data-driven AI – changing the nature of the buildings we are in
• Changing the construction process. As building sites are exposed to the elements, we won’t have robots on site any time soon, but we are automating more and more of the building process and building prefabricated units in more automated factories.
• Valuations technology is already tracking and automating valuations, and machine learning will soon be able to predict property prices
• Retail: Discovering that Amazon doesn’t quite get the same information from customers online, it is now building stores to create more serendipitous browsing and to gather more information about customer choices.
• More widely, self-driving cars will redefine our cities, but the secondary effects mean that the nature of commuting will change, as sitting in a car is wasted time. Many manufacturers are already looking at creating office spaces in cars, changing the way we look at real estate.
• Flight from the cities? Technology is enabling people to work in smaller, more rural communities, connected to their work and team while closer to families and nature. This appeals to the human psyche, and smart real estate investors are hooking into it.
• Proptech is becoming global – a recent Singapore demonstration of virtual reality is helping people to view and then buy properties in NZ. As we speak, people are buying properties without seeing them.

2. Could data help people get onto the housing ladder?

Perhaps the biggest trend that proptech is powering is what we’re doing with the data it is generating. Proptech enables us to create data we’ve never been able to see before, but it also enables us to do more with it. As Carmen Vicelich said, “there has never been a more exciting time for our space”.

Technology and cloud storage is now enabling property professionals to do so much more with data. The more we can measure, the greater the value we can extract, and the greater the opportunities we can create, so the quicker things will accelerate. Therefore, getting data in the right format and place is key. For example, realestate.com.au is becoming a data-driven platform that is helping to drive insights for users, such as comparing properties in great detail. These data-driven insights then flows into valuation models, bringing new transparency to house prices. Why shouldn’t a person be able to buy a tiny percentage of a property, the valuation of which can always be an immutable fact through technology?

And if technology enables a person to sell off a portion of their house and see how it is trading, they will have a much better view of what it is worth. This could lead to property becoming more a commodity like an equity share. We are seeing this now through buyers using algorithms to transact at pace, all because of digital contracts. In this way, secondary markets are enabling faster trading and new partnerships. As the demand for data drives smart meter usage and smart homes, smart meter operators are able to tell you if your fridge is about to break. This of course gives finance companies opportunities to help you buy a new one.

3. Also opening up transparency

Because proptech is giving us a greater view of all the data on a property than ever before - including geospatial location, hazard data, land perils, fire risks etc – automated valuation models such as Valocity are becoming more effective than ever before, and are giving buyers greater transparency than ever.

Ultimately, as standardized algorithmic valuations and trading become real, people making data-driven decisions will be more successful. This in turn will drive the future need to adopt more technology to make better decisions.

Ultimately…

Property is still the most valuable asset in the world. As people, we want better, faster, easier. This means we want data and we want things at the push of a button. Things are changing fast, and the gap between those adopting technology and those waiting for it is only widening. 
This is forcing the system to catch up. Ultimately, we should grasp the opportunity to adopt new technologies that are coming through. It is up to us to embrace proptech, innovate, and drive the transparency that provides real opportunities for us all.

We encourage you to read the full report by Professor Graham Squires and Dr Teo Susnjak, which can be found HERE under ‘The Property Foundation’s Commissioned Reports’