Technology has tremendously impacted the commercial and residential property markets in recent years, and this trend is unlikely to reverse in 2025.
Expect new technologies to change the game in areas such as property management and investment in the commercial property market. Some of these technologies have gained in usage over the past few years, but a few are just starting to disrupt the industry.
Within the residential property space, expect these new technologies, coupled with other factors such as changing demographics and consumer tastes, to continue disrupting the status quo among estate agents and other residential property services firms. A good example is the rise of digital estate agencies like Purplebricks, which offer house valuation tools to determine how much your house is worth. This trend in digital first-home valuations and real estate services is expected to grow with the younger demographic entering the housing market.
To learn about these rapid changes, read on as we discuss the latest tech-related trends in the real estate market.
Proptech Changing the Game in More Ways Than One
Property technology, or ‘proptech’ companies, has increasingly impacted numerous commercial property areas for years. Before, proptech represented a tiny sliver of technological innovations in real estate, like property management software.
Now, however, proptech encompasses areas once the domain of science fiction. For example, places like virtual reality, with the rise of 3D virtual tours of property. Or, with the increase in property owners developing ‘digital twins,’ or 3D digital models, of their properties. That’s not all. Proptech is also starting to have a disruptive impact on institutional property investment.
Real estate crowdfunding platforms bring billions of additional capital into the property investment space. Blockchain technology, through tokenisation, is also changing the game for real estate investment.
As Coindesk reported late last year, billions of so-called ‘real world assets’ (RWAs) are coming ‘on the chain.’ Leading institutions like BlackRock are also starting to tokenise private investment funds.
Tech Disruption Changing the Game for Estate Agents
As younger generations enter the housing market, what’s considered the ‘norm’ for residential property sales has shifted dramatically. Millennial and Gen-Z home buyers conduct a far more significant amount of online research before deciding to tour a prospective home.
Hence, estate agents are adapting to this demographic change by placing an even greater emphasis on the online presentation of residential properties. Much like in commercial property, proptech innovations like 3D tours of homes continue to rise in popularity and usage.
Other protect-adjacent technologies, such as drone photography, continue to be popular. Estate agents are also leaning more heavily on automation tools like chatbots and virtual assistants for customer service purposes. Such tools help reduce operating costs and increase customer engagement.
Another recent tech-related trend in residential property continues to strengthen: the rise of iBuyers, or large-scale purchasers of residential property for resale, using pricing algorithms and other advanced technologies. Per a recent survey, 71% of home sellers stated they would be willing to sell their home to an iBuyer.
Looking Ahead
Generative AI (GenAI) has become a game-changer for many industries, and real estate is no exception. Generative AI and machine learning technologies play a key role in the pricing models used by iBuyers, property investment firms, and other market participants.
This technology has other real estate-related applications as well, such as mortgage underwriting, property insurance, and other real estate services. Over the next year, expect greater usage of GenAI technology to conduct property valuation analysis, automate tasks, and enhance other types of prop-tech, like 3D mapping and digitised property management.
In total, existing and emerging technological trends in the commercial and residential property markets are set to disrupt further what has until recently remained an ‘old school’ industry, where personal relationships and connections mattered more than the size of a firm’s tech stack.
That’s not to say that ‘old school’ advantages will wither completely. However, even well-connected, venerable estate agents and other firms that fail to keep up technologically could be left behind by the competition.
