Technology comes in many forms, from advanced CCTV and access control systems to complex trend analysis helping to inform investment decisions.
Its potential is vast, yet making sense of both the scale and speed of transformation across the industry can seem daunting.
Momentarily, let’s look past the term ‘proptech’. It is a great focal point for investment and a catalyst for early tech adoption, but is not a new market as it still moves within the same sectors, same clients and their budgets.
An interesting comparison to property is the advertising industry, which has been through significant digital transformation since the early noughties. After all, both property and advertising are ultimately about transactions of ‘space’.
Digital advertising and data are now the primary drivers of all advertising growth. As an industry that has seen its overall value rocket, advertising has changed significantly due to the incredible exchange of information enabled by tech.
Ever wondered how digital banner ads on your mobile are so quick to target you? That’s ad exchanges working at less than 50 milliseconds per transaction. It has all happened organically as industry players have allowed data to propagate across multiple partnerships; there is no singular central repository of market data. Ultimately it’s the commercial dynamic that has driven this need for tech transformation, as it will for property.
Tech adoption makes every area of the property industry more measurable - and this is where its value lies. Digital transformation brings data mining (the ‘new oil’), accessibility, timeliness and transference of information to the operational forefront.
This scales efficiency within the industry to new heights as analysts can appraise far more deeply than before, from investment trends through to building design and people movement. Surveyors and negotiators hugely benefit as the property industry has always had ‘appraisals’ at its core.
The property service lines broadly split into consultancy, such as valuation, management and lease advisory, and transactional, such as sales and lettings. The progression of tech and data strengthens each team within these areas.
Tech has historically been in the background for most in the industry as they asset-manage and sweat the investment. However, we are now seeing it become more prominent through data-driven portals, predictive market intelligence and digital marketing. The industry will hugely benefit by speeding up adoption by all parties - and those businesses that do will begin to outperform their rivals.
It’s fine to use a machine, but who is going to set its goals and monitor and interpret it?
Much like advertising, property is a people-driven industry and will remain so. Digital and data transformation is about assisting humans - it is not a wholesale replacement.
Changes in staff members’ roles will be driven by tech replacing their ‘formulaic’ functions but not those that still require relationships such as strategy and appraisal, where tech would either be too challenging or too costly. Moreover, it is fine to use a machine, but who is going to set its goals and monitor and interpret it?
The property industry has the same reasons for driving adoption of tech as the advertising industry had. Us humans should take comfort in that the ad industry has seen significant growth, not reduction, of employee headcount with a 31% increase over the past seven years (IPA statistics, 2017). So if the comparison holds true, the property industry will flourish with tech adoption, but it is not tech that will transform the industry - ultimately it’s the people, their skill sets and the roles they play.