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11 Key Real Estate Technology Trends in 2023
Over the last 30 years, the real estate industry underwent a big wave of changes and innovations. Technology didn’t play a significant role in the industry initially. However, that has significantly changed over the last few years.
As a result, the global real estate industry is undergoing massive digital transformation. It is expected to reach $8.6T by 2026, making it one of the biggest markets in the world. Tech also majorly influenced the development as it allows to make smarter decisions and improve the experience for everyone — tenants, landlords, and investors.
In this article, we will share software development trends in real estate in 2023. Devox Software team works with front-end, back-end, and API integration solutions, so we always focus on detecting and knowing the trends. Staying on top of technology and real estate trends, we provide services that satisfy our customers’ needs and go ahead of our competitors.
Real Estate Market Overview in 2023
Innovative technologies continue transforming how we buy, sell, finance, and invest in real estate. Startups utilize these opportunities and focus on introducing new business models. The latter aim to disrupt the global industry even more and determine the future of real estate technology. According to Deloitte Insights, leaders can navigate the future of real estate in 2023 by keeping the focus on strategic execution, innovation, and talent.
New Business Models
A proptech company develops technology applied in the real estate industry to make managing, controlling, planning, trading, or using real estate more efficient. Such businesses rely on tech solutions to improve the real estate sector and make the processes more efficient. Therefore, when starting a proptech company, careful consideration and selection of a business model are a must.
In addition, real estate innovation technology companies create more and more models to satisfy their customers and keep up with the new and forward-minded generation.
- Open platforms: These platforms can develop innovative investment models for development and refurbishing projects, such as syndicates and rolling funds. They focus more on volume and the goal of finding anything anywhere.
- Curated (or segment) platforms: Such platforms are marketplaces for a more specific service or behavior where the customer expects a certain level of experience or characteristics. The revenue model focuses on commissions from both parties.
- Brokerage: Such a business model focuses on offering a personalized service. With the help of machine learning, they bring transparency to pricing/matchmaking or eliminate legal or financial barriers.
- Operator/Management Company: Companies lease long-term and design spaces to add more value to them. With the updated design, hospitality, technology, and brand, they can now offer flexible shorter-term rents at a margin.
Real Estate Tech Startups
As the financial value of the real estate industry and the potential for new business models is growing, real estate startups have a major chance to expand quickly. Marketplaces are the main disruptors in the industry, connecting buyers and sellers. For example, Airbnb allows you to rent a room in a house with others without any agents, which threatens hotels. While WeWork allows renting a working space with others, posing a threat to office management companies.
Real estate startups revolutionize the industry. Here are some of the most promising real estate startups at the moment:
Triplemint boasts its customer-centric and data-driven approach. They focus on using predictive analytics to anticipate the property market.
Hubble is a marketplace that makes renting office spaces easier. They use the latest technology to gather information about suitable workplaces around the UK and help their customers to mobilize the environment and increase accessibility.
Compstak provides commercial real estate information for investors. Their goal is to eliminate the inefficiency of data sharing in the industry with the help of accurate statistics and data transparency.
Challenges in the Real Estate Industry
The commercial real estate industry faces an unprecedented period of uncertainty. The leading concerns are influenced by inflation, interest rate, and geopolitical risk.
Resistance to change in the industry
Real estate doesn’t move as fast as other industries, especially tech-wise. Most owners find it hard to convince them they need this new application for this business. The adoption process can be easier by observing what the real estate industry needs.
In addition, people and companies are quite uncertain about many recent innovations and their usefulness, survivability and stickiness. Even those open to an early adoption approach new technology and processes with careful and slow consideration.
Hard to acquire early funding
As a result of the low adoption rate, engagement and willingness to pay decrease. It is hard to acquire investments in your company from investors. They need to convince them that the company or product will be useful for the market segment. However, with the booming trends, investors are opening their wallets to new opportunities.
The economy continues to show signs of weakening, with high inflation and rising interest rates caused by geopolitical risks. It will also cause further housing market shifts in 2023. An expanding economy leads to increased demand for real estate and new business formation. On the contrary, a weakening economy puts downward pressure on the performance of existing commercial properties.
Cybersecurity risks in commercial real estate are significantly increasing, influenced by the technological advances that impact property functionality. Cybersecurity incidents often occur in control systems and insurance gaps. In addition, insurance carriers and brokers are not focused on providing cybersecurity insurance coverage.
What’s the result? Safety issues, unmitigated access to corporate networks, and significant brand damage. As a result, it impacts all parties yet can be influenced only by investors and owners responsible for policy enforcement, assessments, and active monitoring.
Innovations in the real estate sector
The real estate sector has been influenced by many factors in recent years. Together with its great potential, it has all led to major pressure to innovate and push for digital transformation.
The challenges above are also bringing something new to the proptech industry. Therefore, they must be used to the advantage and in consideration by someone willing to enter the industry or introduce new products.
For example, while cybersecurity is a significant challenge, there is a need for solutions that will provide surety to all parties in the industry. Real estate companies are still looking for ways to boost efficiency with more process agility and robotics. So, the adoption of automation is still high, requiring IoT and CRM software. Users expect better experience and easier reporting, so new data and analytics solutions are in massive demand.
According to KPMG, four areas bring significant investment to innovate the solutions:
Proptech trends in 2023
Property technology has been majorly influenced by a pandemic that forced a rapid shift in the real estate industry. As agencies and customers faced many challenges, it has led to vast innovations and improvements that are only expected to develop further.
Real estate CRM software is a customer relationship management system that helps manage all communications of real estate agents with leads and clients. Such systems are built to take care of the end-to-end process management, from managing incoming requests, and preparing price quotes to selling and managing property. They offer features that are built for specific real estate needs and are used for email and text messaging, lead follow-up and click-to-call actions.
Artificial intelligence is a trend in many industries and real estate is no exception to the revolution AI offers. AI & ML allows realtors to pass algorithms and data pipelines to their decision-making processes. But real estate companies are proceeding to the full implementation of it.
AI in real estate can be used for various purposes. One of them is content marketing and advertising. For example, AI chatbots can help respond to client queries about house search. Another practical use of AI/ML is property analysis and future validation. Such tools can conduct a valuation of a property and predict its future market value.
Devox Software has the experience of successfully implementing AI technology in its projects. For instance, we’ve developed Ferretly — a social media background screening SAAS platform, that was developed using cutting-edge technologies like AI and ML.
The use of blockchain transactions is becoming more prevalent as the advantages of the system are becoming clearer. A blockchain ecosystem helps to eliminate the paperwork, bureaucracy and expenses. At the same time, it guarantees transparency.
Blockchain systems are ideal for real estate transactions, as they often involve several parties and can be completed in minutes and efficiently. In addition, such transactions are more secure due to their decentralized way of recording and transferring ownership of assets.
The real estate industry comes with many resource-consuming tasks and processes, such as documentation, property and client management, and lead generation. Therefore, the industry has a big need for automation tools that will help to streamline all these processes.
Real estate agencies focus on implementing tools specifically tailored to their industry, as they generate more efficiency than general tools. Automatization in real estate helps to manage team’s workloads, see their calendars, as well as plan their workloads accordingly. Improving such operational processes boost team’s productivity and achieve new goals.
As the real estate market becomes highly competitive due to the migration and unstable economics, the demand for real estate apps increases.
Real estate apps provide everyone with exceptional convenience for on-the-go searches. Stakeholders in the real estate sector are sellers, renters, landlords, and agents. Therefore, several types of real estate mobile apps solve different problems for every player.
For example, home valuation real estate apps allow customers to check all the data about the property value. So, with the help of such an app, sellers can calculate the house’s value. The evaluation uses AI and ML methods based on the home’s location, square footage, number of rooms, and more.
There are also renting applications for house hunting. They allow people to search for different types of accommodation for rent.
As people increasingly implement digital tools to find a home, Devox Software specializes in mobile application development that are both native and cross-platform. Our company offers full-cycle service from planning and up to release and ongoing support so your app will be in reliable hands. We know how to do it on time and within budget. Don’t hesitate to contact us if you have such a project in mind.
High Data Security
As the amount of different data on the Internet continues to grow, its protection has to grow with it. Real estate companies are now expected to provide reliable cybersecurity, dealing with transactions of high value on a daily basis.
Therefore, technology and people must be all linked together to achieve high data security and continue building on this real estate technology trend.
Metaverse is the most recent of commercial real estate technology trends in this list. However, it’s also gaining importance. Therefore, it has massive potential for big returns, while investments in it is still risky.
Metaverse real estate is pieces of land in a virtual world, or more simply — pixels. These programmable spaces allow people to socialize, play games, attend virtual events or different meetings and many other activities. Metaverse works in the same fashion as in real-life, real estate investors can flip or lease properties.
There was a massive boom, and the metaverse drove more popularity after Facebook changed its name to Meta in 2021. The interest continues growing. So does the global demand for metaverse real estate — it is forecasted to skyrocket at a CAGR of 45.2% from 2020 to 2025.
The use of 3D is skyrocketing in many industries and it’s also making our life easier in the real estate industry. 3D real estate is becoming one of the go-to tools and has many practical applications with tremendous value. 3D models are important tools that help us to move into the era of technological advancements in real estate.
3D modeling allows us to acquire a detailed 3D model from 2D plans with ease. As a result, viewers can also walk through a 3D property model virtually and understand its area in all aspects.
VR & AR
While VR/AR technologies are often associated with such industries as gaming and entertainment, it’s also gaining momentum in real estate. For example, it allows for virtual property staging or showcasing.
AR & VR technologies amplify the customer experience. Real estate agents and firms can arrange 3D guided tours for home buyers. It’s useful for both sides — they don’t have to travel to the property, which is extremely beneficial if it is impossible, and agents can showcase the property in the best light. Such technologies help to streamline the house-hunting process significantly and remove many barriers.
IoT (Internet of Things) represents the concept of ordinary physical things connected to the Internet and as a result, are linked. Thus, IoT devices and sensors establish a network of smart gadgets that can converse with one another.
The use of IoT technologies in the real estate sector provides the opportunity for real estate companies to communicate with clients and tenants to better control smart devices and houses, while managers can monitor various aspects of the property.
In addition, IoT helps to decrease the vulnerability of properties’ security, minimize maintenance costs, make resource consumption smarter, and save more resources.
Big data is beneficial in delivering your message in front of your target audience and measuring the efficiency of your solutions. Data insights help meet the needs of buyers and sellers, become customer-centric, and therefore increase customer satisfaction.
Big data empowers real estate agents, home buyers and investors to make more savvy and data-driven decisions as data insights enable more accurate predictions about market trends and its risks. As a result, data analytics technology optimizes the industry and drives transparency, which ultimately invites more investment.
Do you need a real estate platform?
Real estate is a major industry that significantly fosters economic growth. Of course, challenges exist in every industry, but they create a space for innovations. As a result, startups develop new business models and implement different technologies to disrupt and improve the industry.
The proptech trends we have discussed will add more value to the industry in 2023. Tech solutions will become even more dominant, changing the real estate sector on a global scale.
When working with our clients, Devox Software always considers real estate tech trends. Our outsourcing web development team specializes in both front-end and back-end solutions, so you will get convenient and user-friendly platforms without setting up a full IT department in your office and with a deep focus on the specific industry.