Property technology (also known as by the portmanteaus proptech, PropTech, prop-tech and also known as real estate technology) is used to refer to the application of

information technology Information technology (IT) is a set of related fields within information and communications technology (ICT), that encompass computer systems, software, programming languages, data processing, data and information processing, and storage. Inf ...

and platform economics to the real estate industry. Property technology overlaps with

financial technology Financial technology (abbreviated as fintech) refers to the application of innovative technologies to products and services in the financial industry. This broad term encompasses a wide array of technological advancements in financial services, ...

, including uses like

online payment An e-commerce payment system (or an electronic payment system) facilitates the acceptance of electronic payment for offline transfer, also known as a subcomponent of electronic data interchange (EDI), e-commerce payment systems have become increa ...

and booking systems.

Overview

Property technology encompasses any application of digital technology or platform economics in the real estate industry. Some examples of property technology include

property management Property management is the operation, control, maintenance, and oversight of real estate and physical property. This can include residential, commercial, and land real estate. Management indicates the need for real estate to be cared for and mon ...

using digital dashboards,

smart home ''SMart'' was a British CBBC television programme based on art, which began in 1994 and ended in 2009. The programme was recorded at BBC Television Centre in London. Previously it had been recorded in Studio A at Pebble Mill Studios in Birming ...

technology, research and analytics, listing services/tech-enabled brokerages, mobile applications, residential and commercial lending, 3D-modeling for online portals, automation, crowdfunding real estate projects, shared spaces management, as well as organizing, analyzing, and extracting key data from lengthy rental documents. According to economist Richard Reed, the real estate industry has historically been conservative in its approach to technology, and is slower to adopt new technologies than other industries. Advances in the residential side of real estate technology encompass some target areas, but generally aim to reduce friction in the purchase, sale, or rental of a property. Areas of focus include finding a home, selling a home, financing a purchase, closing on a property (including valuation,

title A title is one or more words used before or after a person's name, in certain contexts. It may signify their generation, official position, military rank, professional or academic qualification, or nobility. In some languages, titles may be ins ...

escrow An escrow is a contractual arrangement in which a third party (the stakeholder or escrow agent) receives and disburses money or property for the primary transacting parties, with the disbursement dependent on conditions agreed to by the transact ...

, and

title insurance Title insurance is a form of indemnity insurance, predominantly found in the United States and Canada, that insures against financial loss from defects in title to real property and from the invalidity or unenforceability of mortgage loans. Unlik ...

), managing a property, managing loans, and mortgage lending software. Many proptech companies have seen a spike in demand for these solutions as the COVID-19 pandemic has jolted management companies from their "business as usual" routine.

History of real estate technology

The history of property technology is often divided into three stages of development. These stages broadly correspond to the period from 1980 to 2000, from 2000 to 2008, and from 2008 to the present. Digital technology began to be adopted by the real estate industry during the 1980s, when personal computing became more common. Spreadsheet and accounting software like

Microsoft Excel Microsoft Excel is a spreadsheet editor developed by Microsoft for Microsoft Windows, Windows, macOS, Android (operating system), Android, iOS and iPadOS. It features calculation or computation capabilities, graphing tools, pivot tables, and a ...

began to be used by real estate companies when they were first introduced. Advancements in the area of

investment analysis In finance, valuation is the process of determining the value of a (potential) investment, asset, or security. Generally, there are three approaches taken, namely discounted cashflow valuation, relative valuation, and contingent claim valuatio ...

also allowed real estate investors to more accurately assess the value of commercial real estate using larger databases of information. The second stage began as real estate technology first targeted consumers during the

dot-com bubble The dot-com bubble (or dot-com boom) was a stock market bubble that ballooned during the late-1990s and peaked on Friday, March 10, 2000. This period of market growth coincided with the widespread adoption of the World Wide Web and the Interne ...

. At a time when most sales and residential listings were on print media and real estate offices, companies began to focus on moving listings onto the digital media. From 2008 onwards, the widespread availability of high speed internet meant that real estate companies could move more of their data and services online. Real estate databases such as

Zillow Zillow Group, Inc., or simply Zillow, is an American tech real-estate marketplace company that was founded in 2006 by co-executive chairmen Rich Barton and Lloyd Frink, former Microsoft executives and founders of Microsoft spin-off Expedia; Spen ...

are an example of information such as geographic data, property valuation and real estate advice being moved online. This has been successful, with companies like

(US), Rightmove (UK)
PriceHubble
(CH) and Aurum PropTech (India) being in the top listed companies in their respective markets. The rise of digital technology during the 21st century has led to the development of a

sharing economy The sharing economy is a socio-economic system whereby consumers share in the creation, production, distribution, trade and consumption of goods, and services. These systems take a variety of forms, often leveraging information technology and the ...

, where applications such as ridesharing platforms became common. This also extended to real estate, as websites such as

Airbnb Airbnb, Inc. ( , an abbreviation of its original name, "Air Bed and Breakfast") is an American company operating an online marketplace for short-and-long-term homestays, experiences and services in various countries and regions. It acts as a ...

and

WeWork WeWork Inc., headquartered in New York City, is a provider of coworking spaces, including physical and virtual shared spaces, in approximately 600 buildings in 125 cities. WeWork was founded in 2010 by Adam Neumann and Miguel McKelvey. Ove ...

made it possible for property owners to rent out their property for part of the year. The

COVID-19 Coronavirus disease 2019 (COVID-19) is a contagious disease caused by the coronavirus SARS-CoV-2. In January 2020, the disease spread worldwide, resulting in the COVID-19 pandemic. The symptoms of COVID‑19 can vary but often include fever ...

accelerated the adoption of information technology in the real estate industry. The pandemic helped to drive

e-commerce E-commerce (electronic commerce) refers to commercial activities including the electronic buying or selling products and services which are conducted on online platforms or over the Internet. E-commerce draws on technologies such as mobile co ...

and resulted in the closure of many traditional

retail Retail is the sale of goods and services to consumers, in contrast to wholesaling, which is the sale to business or institutional customers. A retailer purchases goods in large quantities from manufacturers, directly or through a wholes ...

stores, which has impacted the

commercial real estate Commercial property, also called commercial real estate, investment property or income property, is real estate (buildings or land) intended to generate a profit, either from capital gains or rental income. Commercial property includes office bu ...

industry.

Blockchain The blockchain is a distributed ledger with growing lists of Record (computer science), records (''blocks'') that are securely linked together via Cryptographic hash function, cryptographic hashes. Each block contains a cryptographic hash of th ...

technology has also been used to track property for the purposes of

land registration Land registration is any of various systems by which matters concerning ownership, Possession (law), possession, or other rights in Real estate, land are formally recorded (usually with a government agency or department) to provide evidence of ti ...

and resolve potential ownership disputes. Post pandemic, proptech is increasingly influenced by wider societal concerns, such as town planning, and public sector applications. An example of this can be seen in the UK, where the government started a 'proptech innovation fund'. Under the banner of 'proptech' this saw initially investment in citizen involvement solutions. More recent developments see applications in land assessment.

Investment in real estate technology

During the 2010s, numerous property technology startups were created, dealing with aspects of real estate such as design and construction, listings, and transactions. These startups have been supported by seed funding and investment from a range of sources, particularly venture capital funds. In 2015, investment into property technology grew, with more than $1.7 billion in funding being invested across over 190 deals. This represented a 50% increase year-over-year and a 821% increase in funding compared to 2011. Deal activity also increased, growing 378% with respect to 2011's total, and 12% year-over-year. This investment appeared to increase further in 2017 to £8.5 billion. In the first six months of 2019, $12.9 billion of venture capital funding was invested into real-estate technology startups, which surpassed the $12.7 billion of investments in 2017.

References

{{Reflist Real estate industry Financial technology