Digitalization: Transforming the real estate industry
An exploration of the real estate industry and the technologies that’s revolutionizing how we design, construct and use the built world.
Digitalization has transformed every industry. Emerging technologies and a growing understanding of the tangible benefits they can deliver have found a foothold in almost every aspect of the industry, from tools to help planners and developers build more efficiently to apps and platforms that help agents sell more easily.
But what are the technologies affecting this change and how are they being harnessed to create real benefits for different sectors of the real estate industry? And more importantly, what will be the outcome of this digitalization progress for the world around us and the lives we live?
In this article
Jump to a topic
- Improved customer experience
- Big Data
- Building Information Modelling (BIM)
- Real estate digitization
- The future of the real estate developer profession
- What technologies and which trends are enabling the digital revolution?
What is digitalization in real estate?
To begin, digitalization (or digital transformation) is the shift of “analog” processes to digital ones.
More precisely, the adoption of digital technologies like 3D virtual tours, Digital Twins, blockchain, smart contracts, alternative payments, chatbots and NTF applications.
These digital technologies allow real estate companies to improve their operational efficiency, customer satisfaction, property operations, revenue streams, and open the real estate industry to new levels of transparency and democracy, which will allow them to foster growth like never before. For that to happen though, we need to look towards digitalization through digitization.
“Digital transformation is creating fundamental change across every facet of the real estate industry.”
Gartner defines digitalization as “the use of digital technologies to change a business model and provide new revenue and value-producing opportunities”. Despite – or perhaps because of – the size of the real estate industry globally, its transition from analog to digital has lagged behind other industries like finance, widely referred to as FinTech. But PropTech, as the digitalization of real estate is now known, is starting to garner headlines, especially with the growing realization that without it, the industry is missing out on big profits.
The top 5 key trends in the digital age of real estate
Every year we hear many opinions and theories about the future of the real estate industry; some of them are justified, and some turn out to be just assumptions.
But what are the key real estate trends we expect in the future? Let’s find out in detail!
Improved customer experience
First and foremost is an improved customer experience. Digitization of real estate assets and services is making technology more accessible and easy to use, leading the way for digital-first PropTech companies and startups to lead this integration into everyday use. These companies act as change agents for bigger, established companies looking to improve their customer experience through technology and create more sustainable and efficient smart buildings.
With smart technologies like IoT sensors, building automation, and predictive maintenance, property managers can optimize energy usage, reduce costs, and enhance the comfort and safety of occupants. Real estate technology is revolutionizing how customers and professionals interact with each other and the way buildings are designed, built, and managed. From online property searches and virtual tours to smart building technologies and digital communication with property managers, technology is driving innovation in the industry and improving the customer experience.
Easy-to-use interfaces are vital because of the sheer volume and range of data that’s now available, but putting that data to good use is just as important if it’s to have value. Big Data is what drives innovation, and connecting multiple real time data sets into a coherent and usable context that delivers value for all types of customer is a significant challenge, but one that’s already being met.
“The volume of data now available, often in real time, is truly mind boggling.”
The volume of data now available, often in real time, is truly mind boggling: environmental, transport, points of interest, amenities, property, cadastral, legal, planning, demographics, satellite, mapping… the list is almost endless. Giving it a powerful visual and spatial context that turns it from information into the kind of insight that can deliver tangible, real world value is the next step. And compelling use cases for developers, investors, realtors, property managers and more are already starting to gain traction.
Building Information Modelling (BIM)
Building Information Modeling (BIM) is smart 3D modeling that offers real estate and property developers, architects, engineers, and construction professionals the tools and insights to better plan and build property infrastructure, enhancing collaboration, efficiency, and accuracy while saving time. By incorporating real estate analytics into BIM, developers and architects can make data-driven decisions that improve the design and functionality of buildings. This technology allows for the measurement and analysis of data related to real estate assets and services, providing valuable insights to inform decision-making and optimize property performance
The use of drones is a game changer for real estate companies and construction professionals, as well as engineers and architects, who could now bypass hiring expensive traditional aerial photographing services (helicopters or airplanes for example). Real estate properties can be viewed via high quality, landscape views and 3D models at a fraction of the time and cost. Importantly, drones have the additional advantage of easily flying over hard-to-reach areas (roof, attic, crawl spaces etc).
Real estate digitalization
The final major trend that’s coming to fruition is the appetite for digitalization itself. A great deal of the data we need access to drive digital transformation, is held in localized networks and computer systems or, even worse, on paper files in dusty basements of far-flung buildings. The continued desire to not only digitize this data but then embrace open standards and APIs that means it can be digitalized, shared and cross referenced across products, platforms, organizations and countries is the final bottle neck before unleashing the next wave of innovation.
How will digitalization affect the future of the real estate developer profession?
Real estate developers and data analysts currently spend a lot of time and effort gathering and analyzing spatial and property data from different sources. Additionally, software developers are getting through a lot today while trying to build a spatial application.
Spatial applications use all sorts of spatial data together from different sources, integrating ultra-accurate 3D data and Digital Twins, to make them cohesive and easy to use.
The truth is that there is so much spatial data out there. Nomoko is using cutting-edge technology to gather all that data, implement them to our platform and provide a holistic solution to the users. Digital Twins and ultra-segmented data are much easier to use by real estate professionals and developers.
In the future, you won’t have to be a GIS expert to work with and understand spatial data, as the world will be digitally transformed. Everyone, from property owners to potential buyers and real estate agents, will be able to access them digitally and get creative with them.
“The future of real estate is to be augmented by technology and digital products. From automating property management tasks, to data driven decisions and from furnishing your house virtually to AI based real estate funds – the real estate industry will go through the same transformational change as many industries before it.”
What technologies and which trends are enabling the digital revolution?
In order for the real estate industry to go digital, there are some significant technologies that need to come together and become widely accessible – these same technologies are driving the Fourth Industrial Revolution. The uptake of technology is growing apace and there are some key turning points that will vastly improve its impact on the industry.
AR & VR
Augmented Reality and Virtual Reality are reshaping how, where and when people can experience a property at all stages of the journey. From architects and planners designing and envisioning potential property developments to find the optimum solutions for whatever mandate they follow – profit, sustainability, efficiency, functionality, livability – to developers offering virtual tours inside and out of properties that aren’t yet built to secure investment and attract buyers. 3D modeling and mapping puts properties in context to bring developments to life.
Data analytics is transforming the real estate industry, allowing companies to unlock valuable insights into consumer behavior, trends, and opportunities. With the use of data sets and advanced machine learning algorithms, real estate businesses can create a data-driven approach to decision making and risk management. Real estate data management is becoming increasingly critical as the industry grapples with an ever-expanding volume of data.
By harnessing the power of big data, companies can gain a more complete picture of development opportunities and risks, from global trends to hyperlocal patterns. With earlier access to more opportunities, real estate companies can increase their project pipeline, offer better services, and boost profits.
Internet of Things (IOT)
The Internet of Things (IoT) is transforming the real estate industry by connecting millions of devices and locations to the internet, delivering real-time information and insights about what’s happening to them and around them. With the help of real estate IoT technology, businesses can automate procedures, reduce operational costs, and improve productivity while providing a more informed and cohesive user experience.
Sensors on devices can measure almost anything – location, position, motion, pressure, light, temperature, and flow – creating a clear picture of the industry. Long-term data analysis can establish patterns and forecast trends, making it valuable for risk management for property investors, energy management for building managers, and workspace optimization for businesses.
Among the technological advancements transforming the real estate industry, one that’s gaining traction is the concept of digital twins. Digital Twins are the realization of Big Data and IoT. A digital twin is a virtual replica of a physical asset, such as a building or a property. They connect and translate near limitless data points on real world objects like buildings into a common language that’s accessible virtually and in real time. The more data is added to a building’s Digital Twin, the more complete the view of the building across its entire lifecycle becomes and so the more value it offers.
This has the power to affect every stage of the real estate cycle – across planning, investment, construction and management. Planners can use contextual data to understand the impact developments can have on local environments. Property managers and investors can make more informed decisions, reduce costs, and improve sustainability
Designers and architects use Digital Twins and 3D visualizations to simulate and test complex developments to optimize designs and maximize cost efficiencies. Landlords track real-time data to understand how tenants use their buildings and so identify problems, deliver value added services, minimize maintenance downtime and reduce costs.
Nomoko has already built a Digital Twin solution for real estate, called Nomoko Platform. A search engine for real estate that helps investors and developers find and filter properties based on their criteria.
Blockchain is seeing fast adoption as a new way for buyers, sellers and investors to interact with each other the properties they’re interested in thanks to its inherent system of trust. By using Distributed Ledger Technology (DLT), it fosters trust through transparency that in term saves time, increases liquidity and reduces mediation and so, costs – for example with a blockchain-powered common database of property leases and purchases would give everyone the entire, accurate transaction lifecycle of every property, available all the time.
Through tokenization, blockchain creates an unprecedented level of security, keeping valuable data, insight, sensitive data and the transactions themselves safe.
“The future of real estate lies at the intersection of managed logistics and platform technologies that leverage artificial intelligence, data science, and mobile technology… The second phase of real estate tech are companies offering utilities or tools on top of the existing real estate process and industry – think eSignature, CRMs or transaction management platforms. Today, we are getting the first glimpses into Real Estate’s future.”
What is the future of digitization in real estate?
It’s clear that digitalization is already creating fundamental changes. But these changes goes beyond democratization, efficiencies and profitability – it is also creating a new era in sustainability, human-centered design and with these the prospect of a better future.
This shift towards sustainability is being complimented by a shift in focus away from the buildings themselves and towards the people who live and work in them. Historically, real estate companies have seldom prioritized the human outcome in a meaningful way with their developments but many now recognize that promoting long term welfare and a sense of community yields benefits not just for tenants but also for investors and society as a while.
Around the world PropTech tech startups and enterprises are leveraging technological advancements and access to unprecedented levels of data to create innovative tools and apps targeting different industry sectors and professionals.
Through the power of technology and digitalization, companies are putting sustainability and livability at the heart of their projects, and in doing so are creating a safer, healthier and more fulfilling future for us all. Discover the Nomoko Platform now to get a taste of the future of real estate industry!