Property technology, or proptech, continues to shake up the commercial real estate industry in large part due to thousands of proptech entrepreneurs and startup companies’ efforts, Zain Ventures Founder and President Zain Jaffer recently wrote for Forbes. Proptech’s CRE industry disruption is expected to continue as the market, currently valued at $18.2 billion, could reach $86.5 billion by 2032.
Keep reading to see what Jaffer deems to be the proptech industry’s top four leading trends.
Automation is becoming the rule, not the exception
Automation that crafts enhanced efficiency is proptech’s heartbeat, according to Jaffer. Many of real estate professionals’ day-to-day activities have been automated through different real estate-based management software platforms and CRM. For example, real estate agents can use automation to perform ongoing tasks like marketing, property valuation and deal closing faster, giving them more time to focus on more critical parts of their business.
“All in all, the advancement of automation through proptech has been a win-win situation for everyone,” Jaffer said. “Therefore, my advice for new and experienced real estate professionals is to adopt tools that are relevant to their specific niche as soon as possible. Otherwise, they will be outperformed by competition too quickly.”
Virtual reality is a real estate game changer
Virtual reality’s (VR) increased presence in the real estate industry has changed the way business is done, according to Jaffer. The global VR market’s valuation was $27.96 billion in 2021 and is forecasted to reach $252.16 billion in 2028. The optimistic market forecast isn’t surprising — between virtual property showings, 3-D tours and virtual guides, real estate agents and landlords can optimize their marketing and lead-generation efforts. Meanwhile, developers can leverage architectural visualization to sell CRE properties while they’re still under construction.
Virtual real estate has become its own phenomenon and has emerged as its own investment strategy. Jaffer noted that it’s possible real estate agents and property managers find a spot in the virtual world as investors continue to acquire virtual land parcels and properties in the metaverse, a market that’s anticipated to reach a $824.53 billion valuation by 2030.
“As someone with stakes in the real estate industry, I recommend taking a look at virtual reality and keeping an eye on where it will take us in the next few years,” Jaffer said.
Big data, AI are becoming more powerful
Adopting proptech has been a growing trend in CRE, and within proptech, so has the adoption of artificial intelligence (AI) and big data. A number of proptech companies are looking to use these tools to analyze and collect volumes of data within seconds. This could be helpful to CRE investors who want to analyze a particular property or an entire market in a matter of moments. This type of analysis used to take months, Jaffer said. With big data and AI, the playing field is leveled a bit for smaller investors who typically couldn’t access the deals more experienced ones were able to due to their existing familiarity with the market.
“If you invest in real estate or plan to, do your research when considering using proptech tools to find the right match and make faster, more profitable investment decisions,” Jaffer wrote.
Fractional investing opening the door to new opportunities
Proptech’s emergence has also helped increase fractional property ownership, according to Jaffer. Like big data and AI, fractional ownership has made real estate investing available to just about anyone. Jaffer also noted that he believes it’s better for the industry and stakeholders involved if real estate property access was less limited. It’s why he’s invested in several companies that let everyone invest in real estate properties for as little as $50.
“Proptech has been through a wild ride over the last decade, and I expect the coming years to be no less exciting,” Jaffer wrote. “I am sure that I speak on behalf of many real estate professionals when I say that I am eagerly looking forward to seeing what the next big proptech trends will be.”