The real estate industry hasn’t changed much in the last 50 years. Of course, the typical realtor salesman has changed to the saleswoman and now we have a smart technology to make property search a lot easier as compared to older days, but that is pretty much it. The home buying process hasn’t really seen a drastic change which also indicates, the way real estate is growing will push the industry for disruption.
Investment in real estate tech start-ups have reached an all-time high in the last couple of years, so it is pretty obvious that while realtors may not be ready for change but the consumers are ready for it. Here are few facts which might give you a better perspective on the topic.
Eliminating The Middle Man
Almost 50% home-buyers are able to find a property online, however more than 80% of buyer still rely on real estate agents to take care of the purchasing process, a figure which is still on the higher side. The figure might indicate that people generally trust real estate agents but if you ever ask a home-buyer if they are willing to pay the extra commission to agents, the answer is a big ‘No’.
Most home-buyers pay commission to agents as they are hesitant to directly deal with developers. Back in 2013, Oxford University conducted a study which proposed that Artificial Intelligence (AI) has a 98% possibility of replacing real estate agents in the future. The way AI has advanced over the recent years, it is predicted that in the next ten or twenty years it will replace agents and brokers. Any company that will make the purchase process smooth as silk and helps buyers handle the paperwork directly will cause a major disruption in the real estate.
Reduced Energy Usage
The World Economic Forum stated that the real estate sector consumes more than 40% of global energy and buildings use 40% of the raw materials production, which makes the real estate industry the largest global consumer of energy by quite a margin. Companies that can reduce these numbers will flourish in the coming years.
There is a massive growth in green technology over the last decade and efforts should be made to amplify the same. Companies that can find a way to reduce consumption of energy and other resources in real estate will be a major player.
Space Wasted Is Revenue Lost
The traditional office workplace is becoming a thing of the past, thanks to modern technology. The work from home and freelancing culture is gradually increasing. So, the need for large office spaces will also diminish in the future, as the trend will only increase. To utilize the extra space would be really crucial for both business houses that will find a solution as well the real estate companies who will build them, as space can be utilized for some other purpose.
Has the disruption has already begun?
In countries like US, investors have already invested $1.8 billion for real estate tech start-ups in Q3 2016, which was an increase of 85% from previous year. Start-ups like Zillow is already offering huge amount of quality data for home-buyers to narrow down their search for property and is changing the way people search for property. It’s not far when the same will be available in India which will change the entire quantum of real estate business.
The biggest game changer in real estate will be the introduction of AI that can replace realtors. The real estate industry is already on track, the only question is who will get there first? The capital and desire are already there, it’s just a matter of time finding the right technology to execute.
UPDATE: Venture Global Announces Final Investment Decision and Financial Close for Calcasieu Pass LNG
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