If someone told you we would get to a point where stakeholders in the real estate industry cannot do without technology, would you agree?
Maybe you wouldn’t.
Buy Rent Kenya, a property marketplace, in conjunction with Building in Kenya, hosted a webinar on the Impact of Technology in the Real Estate Industry, and here are some interesting facts:
- 43% of real estate buyers start their buying process by looking online
- 92% of property buyers use the internet
- 50% of the buyers use some form of mobile website or app to search for properties online
- 91% of realtors use social media to create awareness about and even sell their property.
So, what comes into your mind at the mention of the impact of technology in the real estate industry?
For many people, it is about addressing the human factor in the industry, while for others, it is about software and systems that can make the real estate industry more effective.
This overview shows that there are different views about what technology means to the real estate industry. Still, the one agreeable view is that Technology is an enabler and not the end in itself.
But, how has it impacted the real estate industry in Kenya, and how can we capitalize on that? Keep reading to learn more!
The Adoption of Technology in the Real Estate Industry
There is no denying that technology is bound to change how businesses are carried out in real estate. This age-old industry cuts across different stakeholders, from homeowners to investors and developers.
In some respects, globally, the adoption of technology in real estate has lagged behind its use in other business sectors. This was partially due to a reluctance to change methods that had worked well in the past.
Another factor that slowed down the widespread use of real estate technology was significant players’ attempts to develop proprietary tools.
In Kenya, the adoption of technology in the real estate industry has been slow, with the adoption and success rate estimated at around 1-5% in the country.
The primary reasons for such slow uptake include:
- Lack of the necessary knowledge and information on the role of technology in the industry
- Poor or no government initiatives and policies towards the adoption of PropTech
- Lack of the needed interconnection in the real estate value chain
Whereas the PropTech concept faces such bottlenecks, there are still hopes that things will change in the future for the better.
How is Technology Impacting the Real Estate Industry?
We can evaluate the impact of technology on the real estate industry from the current trends and developments in this sector.
Here are a few examples.
- Virtual Reality
Virtual reality isn’t just for gamers. It’s an integral part of many consumer-based industries as well as real estate.
Virtual reality can be used to take people beyond online photos and offer them immersive 3D views of properties from whatever device they’re on. This is one of the newest trends in real estate, but it’s likely to be one that more realtors start to use moving forward.
Speaking during a webinar hosted by BuyRentKenya and Building in Kenya on the impact of technology in the real estate industry Robyn Emerson, a leader, and urban development professional, envisions a future where technology such as VAR could help stakeholders view proposed changes in a given project virtually.
- The Cloud
Real estate professionals, buyers, and sellers are already using the cloud and its benefits in a variety of ways. For example, cloud platforms can make lending and closing processes simpler, faster, and more streamlined in terms of real estate.
Data can be securely managed and stored, and things like electronic signature capabilities can further facilitate faster deals.
- Big Data and Analytics
Within the real estate sector, data informs over 90% of the decisions. Therefore, understanding the available data within the industry can open opportunities for real estate growth.
Speaking during the real estate webinar, George Arabbu an Architect at Sitescape Studio noted that much data is lying idle within the industry. For instance, projections show that Africa’s top big cities will soon be Nairobi, Kinshasa, and Addis Ababa; this translates to more buildings, but the developers are not using such information.
So, how can big data and analytics improve real estate businesses?
- Data analytics can help real estate brokerages gain deeper insights into their business and access a magnified view of the agents’ performance.
- Risk mitigation by predicting the future price to make profitable decisions.
- Improve marketing strategies based on data insights for better customer reach and engagement.
- Get insights into the latest trends based on profitable locations and deep dive into market cycle risks.
With technology such as BIM (Building Information Modelling), real estate stakeholders can have greater visibility on their entire project, from start to finish.
What Will it Take to Increase the Uptake of Technology in the Real Estate Industry?
Technology is a broad concept. Unless there is a clear definition of what it means to the real estate industry, prospects of it being fully adopted in the industry will remain unrealized dreams.
Technology in the real estate industry is more than just having building and design software. For example, one major technology in the real estate industry is Building Information Modelling (BIM), which refers to digitizing all the necessary information about a particular project.
June Murage, a BIM consultant at Maxon Consultants Limited, highlighted that BIM is critical in the future of the real estate industry. However, she was fast to note that many stakeholders in the real estate industry mistake software for BIM. June added that it becomes easy to visualize a project from start to end with BIM, which is crucial when it comes to making decisions.
Ways of Increasing Technology Uptake in the Industry
Agreeably, the adoption of technology in the real estate industry in Kenya is affected by various factors, including lack of information, lack of government support on the adoption, and the lack of connection between the real estate value chain points.
To increase the uptake of PropTech, a lot of focus is needed around:
- Government policies on PropTech
- Role of technology in the industry
- Big data management
- Matching customer needs to the available solutions
- Interconnection of the real estate value chain
Lack of government support and policies that advocate for the use of technology in the real estate industry, the lack of zeal among private developers to adopt particular technology, and the absence of information are the significant challenges to adopting PropTech.
Many real estate stakeholders, including contractors, investors, and clients, are not aware of the role of technology in the industry. This lack of awareness has created a gap in the real estate value chain. As a result, it becomes easy to match customers’ needs to the right solution and enable interconnection within the real estate value chain for optimal outcomes with the correct information.
The advancement in technology is slowly revolutionizing the real estate industry. For instance, real estate stakeholders can use technology for informed decision-making, data collection, and improved performance.
With the right policies in place and cooperation from private developers, the adoption of PropTech would see asteroid growth in the future. However, it is not a thing for the government only – it requires a combined effort from all the parties – developers, designers, architects, clients, realtors, and agents. Nevertheless,
If you missed the live webinar, here is a replay.