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What is PropTech, and How is it Changing the Property Industry?

Short for Property Technology, and sometimes interchanged with CRETech (Commercial Real Estate Technology), PropTech refers to technology that supports the property industry. PropTech is now revolutionising the way industry professionals conduct business and grow relationships with their clients. 

PropTech may refer to:

  • Software, such as desktop and mobile applications 
  • Hardware, such as beacons and sensors
  • Physical materials and manufacturing, such as digital fabrication of building materials. 

“PropTech is exploding with new technologies – software-as-a-service tools, tenant experience portals, data and analytics platforms, drone applications, IoT solutions, energy solutions, mobility solutions, augmented & virtual reality, machine learning & artificial intelligence, material science – the list goes on and on and on. Some offer a better way of doing what is done today, others open up entirely new value propositions and business models.”

Julian Kezelman – Program Manager, RealTechX 
(Five Burning Questions for PropTech in 2019

Key Challenges in the PropTech Space

Uptake of technology in the property industry has been slow to build momentum. Digitising the property industry is more difficult that digitising information-based industries, such as finance (FinTech), due to the fact that the property industry is dealing with large buildings and equipment.

Another key challenge for PropTech is getting one of the world’s most established industries, the Property Industry, on board with one of the world’s most disruptive industries, the Tech Industry.

“Construction industry professionals are dynamic individuals who like teamwork and problem solving… The real problem needing review is how to get construction personnel to use technology, how can the benefits to them be better communicated, and how does it improve their satisfaction – rather than potentially replace their role?

James Redwood – Director, Crossover Solutions
(Will Property Industry Leaders Adopt Digital Systems?)

The market is growing, and industry leaders are starting to see the value of PropTech

By 2030, the global construction market is predicted to be worth $17.5 trillion USD, an increase of 85%. Investment in the market is also growing: in 2011, $186 million USD was invested globally; in 2016, 2.67 billion USD was invested. In 2017, global venture investments in PropTech amounted to over $12billion USD.

The KPMG Global PropTech Report in 2018, which surveyed 270 real-estate decision makers across 30 countries found that:

  • 73% of companies  see digital and technology innovation as an opportunity
  • 93% of people agree with the statement “Traditional real estate organizations need to engage with PropTech companies in order to adapt to the changing global environment”

“It has taken time, but the industry is really beginning to recognise the fundamental role PropTech can play, and is playing, on so many areas of the real estate industry, from planning to asset performance and data mining.”

Oli Farago – CEO, Coyote
(KPMG Global PropTech Survey 2018)

In Australia, revenue from the property industry represents 8.1% of the GDP, and employs 8.9% of the workforce. The industry is going to look very different in the next ten years, thanks to innovations and investment in the sector, but it’s not necessarily going to mean job losses in favour of automation – rather, it’s about utilisting technology to help people work smarter, not harder, using tech tools for intelligent decision making and repeatable processes. 

Is PropTech Disrupting the Property Industry, or Providing Opportunities for Collaboration?

Partnering with emerging PropTech startups, along with growing internal tech capabilities, will see companies in the property industry go from strength to strength, as PropTech continues to develop and solve current problems.

PropTech, and emerging PropTech companies, can be seen as a compliment to the existing industry, not a competitor. When partnered with investment by big business, newer tech-focused business can help to solve problems faster and with less risk.

(The Property Industry is) impacting millions of people’s lives every day. Whilst this industry is one of the last to adopt technology…. it’s only a matter of time, as long as we continue to be persistent and focussed on improving how property is delivered.

Rachel Kidwell – CEO, TCPinpoint
(Takeaways from Oracle Construction Technology Summit)

In July 2019, TCPinpoint helped launch PropTechSA and StartBUILD in South Australia.

PropTech SA is a collective of South Australian-based growth companies accelerating new and innovative ideas in the property and construction industry. To learn more about the companies innovating the industry in SA, and to join the growing community, visit the PropTechSA website.