What is PropTech ?
An introduction to Property Technology

PropTech refers to the emerging startup companies offering technologically innovative products or new business models for real estate markets. PropTech is an aspect of a wider digital transformation within the property industry, incorporating the commercial and construction sides of the industry, as well as the buildings and cities of the future.

What is PropTech?

PropTech is part of the digital transformation of the property industry via technological changes encompassing residential real estate, construction, commercial property, finance and property management. The term PropTech is primarily associated with start-up organisations offering a more convenient, digital platform to facilitate traditionally manual processes such as the purchasing of houses.One of the biggest opportunities at the moment is in making smarter and faster decisions using the huge swathes of data to which real estate organisations have access.

PropTech Segments

There are a number of terms used to represent the intersection of property and technology such as PropTech, RealTech, CREtech, ConTech and Real EsTech often used interchangeably and with multiple meanings. We use PropTech to cover all technological and digital innovations relating to property.

Today, several verticals emerge within PropTech:
  • the real estate market per se (PropTech)
  • smart cities and buildings
  • the sharing economy
  • the home building industry (ConTech), and
  • finance (FinTech)
MIPIM, a major property meeting in France, recently introduced an innovation forum and competition promoting PropTech ventures. The MIPIM lists
the following tech categories:

  • smart buildings/IoT (internet of things)
  • smart city sustainability
  • market place
  • crowdfunding
  • ConTech
  • 3D/VR (virtual reality)
  • data and research analytics

The University of Oxford's Said Business School suggests there are three global sub-sectors (verticals) of PropTech:

  1. Real estate FinTech – platforms which facilitate the trading of real estate ownership
  2. The shared economy – platforms which facilitate the use of real estate assets
  3. Smart real estate – platforms which facilitate the operation and management of real estate assets.

Expansion of PropTech

179 PropTech start-ups in the Asia-Pacific region have raised funding since 2013, accounting for almost US$4.8 billion of the US$7.8 billion that has been invested globally from 2013 to June 2017. These flows can only increase to match the growing demand for property in the Asia-Pacific. Globally, $3 billion is expected to be channelled to support the development of PropTech this year.

"Organisations are beginning to understand that the real estate data they gather can be used to start driving better decision-making, to speed up reporting and to improve building performance. But what underpins [this] is, ultimately, closer engagement with the real estate customer and consumers of space. Getting the most out of technology needs an innovation strategy geared to delivering an improved customer journey and experience." - Eddie Holmes, UKPA Chairman and PropTech Partner

The Australian PropTech Market

Australia's property market is the most transparent real estate market in the Asia-Pacific region and the second most transparent in the world, according to an index compiled by JLL.

Australia's property start-ups are primarily in Brokerage & Leasing, and Property Management. The former is due to the relatively lower barriers to entry into the space while the success story of construction software firm Aconex, which has completed an Initial Public Offering, has encouraged more start-ups to look into that space. Of the US$37.4 million invested in the Brokerage and Leasing vertical, US$24.8 million went into a pair of agent-matching start-ups – OpenAgent and LocalAgentFinder.

Australia's strong desire for home ownership offers a catalyst for PropTech start-ups, especially those in the Brokerage and Leasing vertical. Also, the Australian Government has been supportive towards FinTech, with policies and regulations assisting FinTech start-ups and innovators to develop, test and globally launch their products and services. It is expected that the number of deals and funding values in the Investment and Financing vertical would progress considerably as a result.

PropTechAus in Sydney, Perth, Adelaide and Brisbane aims to capture the potential of PropTech in Australia by utilising the greatest available tool: collaboration. By bringing together founders, corporates, and government officials to exchange ideas, the momentum can only increase for this promising sector. The PropTech journey is still just at its beginning.
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