What Is Proptech and How It Changed the Real Estate Industry

Proptech is the latest buzzword on everybody’s lips today. Often called the new innovation driver and disruption power in real estate, it is also said to be the modern remedy for real estate specialists suffering from piles of paperwork and a high-yield asset class for investors looking for fresh opportunities.

Sounds familiar? If yes, sit back and keep reading to ease your hustle and find out:

• Proptech definition & proptech landscape with property technology types
• How technology has changed the real estate industry
• Proptech industry overview: proptech market size, proptech companies number across the world, and more
• Real estate technology trends
• Real estate tech startups that revolutionize the industry.

We also look at real estate AI and reflect on how technology has changed the real estate industry.

What Is Proptech?

Proptech, or property technology, is all the tech tools real estate experts use to optimize the way people buy, sell, research, market, and manage a property. These innovative technologies are also known as Real Estate Tech, Retech, Realtech, and Commercial Real Estate (CRE) Tech, depending on which lens you’re looking through. However, at its core, prop tech always means robust alignment between real estate and technology.

Examples of proptech technology can be real estate platforms like Zillow, Zoopla, and Airbnb, as well as property management platforms, like Buildium and Appfolio, for running residential (both single-home and multifamily buildings), office, and retail properties.

In fact, real estate marketplaces and portals were the first proptech tech companies that disrupted the real estate industry back in the 2000s. They all once took the plunge and married technology and real estate by allowing users to showcase their properties online.

In many ways, the proptech definition overlaps with several other sectors, namely:

• Shared Economy Real Estate – any proptech platform that offers shared and/or joint use of a property. AirBnB and WeWork are the most famous Proptech companies driving shared economy.
• Smart Real Estate (aka Smart Homes) – a purely prop tech subsector denoting the use internet-connected devices and appliances, which are collectively known as the Internet of Things (IoT), to enable the remote monitoring and management of the house. Some of the obvious examples of solutions in this proptech subsector include smart kitchen appliances developed by Siemens or intelligent lighting systems produced by Philips.
• Fintech (financial technology) – the elder brother of proptech that brings technology into the financial sector to make customers and businesses access financial services with ease. The two industries meet at Real Estate Fintech focused on facilitating financial processes in Real Estate.
• Contech (construction technology) – the use of modern materials and sustainable approaches in building.

Proptech Landscape: Our Outlook at the Proptech Industry

If you google ‘property tech,’ you’ll find out that there are more than 9000 proptech companies across the globe. Yes, 9000. And most of these proptechs, for the sake of marketing or due to the lack of panoramic view of the prop tech industry, “self-categorize,” making it absolutely unclear which category they’re in.

 

 

Having been in the real estate industry for almost two decades, Ascendix has witnessed the evolution of property technology in real estate and is well-positioned to provide our outlook on the proptech industry.

Our proptech landscape map consists of seven distinct segments and considers the workflows and needs of all real estate professionals:

• Tools for Real Estate Agents and Brokers;
• Solutions for Property Managers and Facility Operators;
• Fintech;
• Construction Tech;
• Investment and VC Solutions;
• Climate Tech;
• Solutions Everyone Can Benefit From.

 

Find out more about proptech examples in the dedicated article on Proptech Market Map.

Residential and Commercial Property Tech

Let’s take one step further and answer ‘What is proptech industry’ according to the property type – residential (e.g., apartment buildings, houses) and commercial (e.g., office buildings, retail spaces) properties.

Residential Property Tech

Residential Proptech Sector is all the digital products developed by real estate tech companies to facilitate the way people own, manage, or rent apartments and houses, e.g., short-term rental platforms, like AirBnB or Lyric.

Please note that some of the solutions, currently present at the tech scene, like property management tools and smart home solutions can be used both for residential and commercial real estate.

The Residential Property Tech landscape is defined by:

• Single-family property search platforms – multiple listing services and real estate marketplaces, both for rentals and buying/selling (Roofstock, Doorvest, Zumper, RightMove);
• Short-term rental platforms (Airbnb, Lyric)
• Single-family property management tools designed for landlords (TurboTenant);
• VR and AR Tools – 3D virtual property tours (View Labs);
• Crowdfunding platforms allowing individuals to invest in residential real estate (Sharestates);
• Real estate tokenization platforms offering individual investors an opportunity to invest in real estate through blockchain technology (SoluLab, Fireblocks);
• Smart home solutions – energy management software (Facilio), IoT-powered tools (Frigate, Homebase AI), AI-powered voice control systems (Josh AI);
• Mortgage lender software – money lending platforms designed for lenders providing mortgages for the residential property (LendingTree, Kiavi);
• Loan management systems – tools for loan application and management, underwriting and appraisal (Enodo and GeoPhy);
• Marketing and advertising brokerage software (Mailchimp, ADvendio, Composer);
• Title and insurance management tools (Doma, Axxis Systems).

 

CRETech

CRE property tech stands for commercial property technology and means the use of all the innovative tools companies and individual commercial real estate professionals use to efficiently run, search, rent, and sell office buildings as well as industrial and retail property assets. The brightest illustrations of this realm of proptech real estate in action are marketplaces for brokers and real estate agents like LoopNet and Biprox.

The Commercial Property Tech space is shaped by:

• Property search platforms – multiple listing services and marketplaces (Bright MLS, Zillow), brokerage CRM (Ascendix RE), etc.
• Construction Tech – property development tools (Estabild, Northspyre), smart building systems (Emnify, Prescriptive Data), estimation and budgeting software (Jet.Build), 2D/3D architecture and design solutions (Enscape, Iris VR), job site management tools (HammerTech, SiteAware);
• Commercial real estate CRM (AscendixRE, Buildout CRM);
• Evaluation and financing tools – underwriting software (RealINSIGHT), appraisal tools (Reggora, Valcre), and automated valuation models (Quantarium);
• Proptech facility management tools (RentRedi, UpKeep);
• Space and asset management tools (SpaceIQ, Foyr, TRIGIGA);
• ClimateTech – energy management software (Energy Elephant), carbon management software (Persefoni), climate modeling systems (ClimateAI), AI-powered real estate solutions like energy intelligence platforms (DEXMA);
• Online booking platforms (Sirvoy, Roomsy);
• Solutions for investment and venture capital funding management – proptech analytics software (Advan Research, Audience Town), portfolio management tools (Juniper Square), deal sourcing platforms (RealCrowd), virtual data rooms (DealRoom, Ascendix MarketSpace).

So, whereas residential proptech is aimed at facilitating owning, renting, buying/selling, and investing in single-family homes and features tools both for individual landlords and agencies, commercial prop tech is all about driving efficiency in the commercial real estate sector and includes tools designed for businesses, rather than solo landlords and tenants.

Proptech Overview: Proptech Market Size & Other Key Numbers

Proptech market size stood at $30.16 billion in 2022 and is predicted to leap to $133.05 billion by 2032.

 

However, the proptech market situation can vary based on your location. As illustrated below, North America emerges as the leader in terms of the number of proptech companies founded, with a significant share of 56% of all prop tech initiatives. Following closely are the UK (805 companies), France (547), and Germany (342).

 

If you want to develop a proptech solution from scratch and need to research the market situation by country, check our Proptech Software Development Guide.

Real Estate Technology Trends

Real Estate has always been a stranger in the world of innovation and technology. However, property tech startups, popping up here and there over the last decade, started to bridge the gap between technology and real estate.

To get a full picture of the recent technology development in property management in 2023 and answer what is proptech and how it will change, we’ve analyzed a few predictions for the property tech in real estate sector made by the world’s visionary leaders, such as Forbes, KPMG, and JLL.

Here are the 6 Technology Trends in Real Estate shaping the future of Proptech and answering what is proptech industry and what to expect from it soon:

 

1. AI and Machine Learning for automation of back-office processes

With artificial intelligence and machine learning revolutionizing industries worldwide, companies have invested around $100 billion in AI-powered real estate tech development, whether the creation of new solutions from scratch or the addition of AI-powered modules to the existing software.

Whereas Big Data in Real Estate is about structuring large amounts of data and has gained huge popularity in the last few years, artificial intelligence and machine learning is about leveraging data with automation and as a trend have won the races.

From robust search prediction functionality to autogenerating personalized email sequences to customers based on their life events, AI will do the job for you!

Currently, the development of the AI real estate market has gone into the following directions:

• AI brokerage tech – brokerage intelligence platforms (LocateAI), listing generation tools (Listing Copy AI), etc.;
• AI for appraisal and loan origination – robotic software and cobots (Silverwork Solutions), automation evaluation models (GeoPhy, Quantarium), underwriting and appraisal intelligence platforms (Enodo, FoxyAI), etc.;
• AI for property management – space and property management tools (TRIGIGA, AUtility), ethical tenant screening tools for hospitality (Autohost);
• AI home automation – smart security (Frigate), smart building systems (Homebase AI);
• AI for energy resource management – energy intelligence platforms (Gridium), renewable energy software (Clir Renewables), climate management platforms (Climate AI);
• AI for real estate development and construction – data management software (Versatile), interior design generation software (Interior AI), construction development management (Deepblocks);
• AI real estate investment solutions – real estate investment platforms (SkylineAI), investment management tools (Canoe);
• Conversational tools – chatbots and textbots (Localize), virtual assistants (RoofAI).

For more data, please consult our article on AI in real estate where we’ve conducted research on who are the main players at the forefront of AI in real estate, what are the most innovative solutions and how you can benefit from them.

 

2. Proptech Big Data & digitalization of property data assets

Big Data is about collecting and analyzing real-time and historical data about all kinds of real estate assets, from residential households to complex commercial properties like corporate facilities and telecommunications. With structured data sets, real estate companies and individual Proptech realtors can then come up with accurate insights on pricing, home-value trends, and even potential risks and failure.

 

3. Virtual Reality for a better online search & home-buying experience

According to a report by Goldman-Sachs, Virtual Reality will be at the top of Proptech disruption by 2025, with an estimated 1.4 million realtors relying on the technology by that time. This number makes up the bulk of the total professionals in this area today.

The application of VR in Real Estate may vary, from virtual tours of properties to augmented reality solutions for digitally adding furniture to the existing interior (like in roOomy).

 

4. Internet of Things (IoT) for predictive maintenance

The Internet of Things (IoT) refers to a “smart” network of devices and sensors that are constantly sending and receiving information about residential and commercial properties to track their overall state and predict failures. For example, property owners can monitor a building’s temperature, security, and maintenance through mobile devices and computers.

 

5. ClimateTech and GreenTech for sustainability

As we adopt the new ways of green construction, focused on building sustainable, energy-efficient homes, modern appliances are getting smarter, too, with SmartGrid refrigerators, washing machines, dishwashers, and micro ovens taking up the central place in our homes. However, there is still a lot to come!

 

6. Blockchain and tockenization for affordable investments

With AI taking the lead in real estate tech empowerment, the industry attention on blockchain has waded. Nonetheless, this trend has been on the rise for long enough to prove its potential to innovate the real estate market with decentralized and transparent processes in property buying, selling, and investing. With property as a digital token, blockchain technologies have reduced barriers to entry and offered fractional ownership, overall making investments affordable to everyone regardless of their socioeconomic background.

Real Estate Tech Startups that Revolutionize the Industry

The number of real estate tech startups is soaring annually, with record-breaking 300% growth over the past decade, according to JLL. These solutions ease the hassle of listing search, property management, documenting, construction planning, and much more.

Since the number of Property Tech startups categories may go far beyond dozens, here’s our wrap-up list of 7 key types of property technology solutions with the key disruptors representing each subsector:

• Real Estate Agent and Brokerage Tools
• Property and Facility Management
• Construction Tech
• Fintech
• Investment and VC Tools
• Climate Tech
• Solutions Everyone Can Benefit from

 

1. Real Estate Agent and Brokerage Tools

Name: Locate AI

Type of Product: Brokerage intelligence proptech solution

Headquartered: San Francisco, the US

Founded: 2014

Locate AI has developed a brokerage intelligence platform that is a complex solution for landlords, brokers, and retailers. The company uses 200 million data points (like consumer profile and demographics) gathered from anonymous mobile devices on the national level to help real estate professionals identify the most high-performing location to invest in.

The main features of the Locate intelligence platform are as follows:

• AI-powered top market, neighborhood, and location analysis (it takes less than 5 minutes to assess the potential site performance);
• Smart reporting and predictive analytics;
• Smart deal tracking and management.

2. Property and Facility Management

Name: Eptura

Type of Product: Workplace and asset management platform

Headquartered: Atlanta, the US

Founded: 2022

Eptura has developed a workplace and asset management platform consisting of two company’s products, Eptura Workplace and Eptura Asset, that helps companies effectively manage facility hybrid work.

• Eptura Workplace offers features like visitor management, desk booking, and conference room scheduling. With Eptura Workplace modules, users can ensure smart facility management and space planning;
• Meanwhile, Eptura Asset is a tool that automates preventive maintenance and inventory tracking while offering BIM models for optimized planning and design.

 

3. Fintech

Name: FoxyAI

Type of Product: Image analysis and property valuation intelligence tool

Headquartered: New York, the US

Founded: 2018

One of latest startups in the realm where real estate and technology fuse, FoxyAI leverages AI, machine learning and data science to help users generate valuation reports based on the property image analysis made possible with FoxyAI’s visual property intelligence models.

Currently, the developer offers 2 solutions:

• FoxyAI 360 Property Valuations – A product used for object and damage detection, automated renovation estimates, and intelligent comparables & localized insights;
• FoxyAI Model Library – Different types of models like damage/exterior/interior models detect specific objects in the property videos or photos fed to the system.

 

4. Construction Tech

Name: CityBldr

Type of Product: Site management and data analytics solution

Headquarters: Bellevue, United States

Founded: 2016

CityBldr provides 50 times faster workflows when it comes to the management of site and allows users to make profitable investments by leveraging smart data like zoning information, environmental indicators, parking requirements, etc.

This digital solution offers the following opportunities:

• Fast and accurate rent comparison, competitor & neighborhood analysis;
• A built-in CRM – users can centralize the property data and track any changes in it;
• Valid data points like zoning information and others.

 

5. Investment and VC Tools

Name: Entera

Type of Product: Investment management platform

Headquartered: Houston, the US

Founded: 2018

Entera is a residential real estate investing platform merging technology and real estate processes like buying, selling, and investing in single-family homes. It acts as a real estate marketplace where one can choose a property and assess the investment risk as well as forecast ROI.

So, what does an Entera solution include?

• An all-in-one residential single-home investment platform and marketplace;
• Risk assessment and ROI forecasting with predictive data analytics;
• AI-fueled transaction management;
• Service partner network for maximized returns.

 

6. Climate Tech

Name: Persefoni

Type of Product: Sustainability management software

Headquartered: Mesa, the US

Founded: 2020

Founded by former corporate sustainability directors, Persefoni is a sustainability management software that helps companies get to the net zero destination faster.

To support companies during their decarbonization journey, Persefoni has developed a set of modules:

• Portfolio Analytics Suite. The module provides carbon insights with seven advanced dashboards. Users can create custom reports, visualize them and filter insights based on different metrics;
• Net Zero Navigator. The module provides users with customized decarbonization plans depending on the industry the company represents;
• Scope 3 Data Exchange. Due to this module, companies can collect emissions data from their suppliers, even if the latter aren’t a part of the Persefoni community, and analyze it before performing scope 3 calculations;
• Climate Impact Benchmarking. With features included in this module, companies can measure their carbon footprint against other industry players;
• Integration Hub. This module provides users with seamless integration of Persefoni Platform with must have applications required for smart data collection.

 

7. Solutions Everyone Can Benefit From

Yes, some solutions are universal and anyone in real estate can capitalize on them whether they are a fintech specialist, investor, agent, or broker. Let’s take a look at one of such startups.

Name: YORD Studio

Type of Product: VR and AR products for real estate

Headquartered: Prague, Czech Republic

Founded: 2019

YORD Studio is a custom developer of VR and AR solutions for a variety of businesses, among which are real estate and architecture. How can one benefit from VR and AR solutions offered by a company?

• Brokers and agents can sell faster with virtual tours, considering that 77% of individual looking for a property expect virtual tours first and face-to-face meetings second;
• Property and facility managers can alleviate the pain of space planning and resource management, especially in the hospitality industry;
• Construction and property development teams can reduce the risk of human error, lower construction costs, increase the jobsite safety, and avoid project delays with everything perfectly visualized and estimated during the pre-construction stage;
• Underwriters and appraisers can perform accurate property appraisals;
• Investors can make data-informed decisions by conducting due diligence remotely or, again, ‘inspecting’ the pre-constructed model of a building to invest in.

How Technology Has Changed the Real Estate Industry

Proptech disruption has brought innovation into the daily routine of almost every player on the Real Estate market, including property owners, tenants, investors, brokers, letting agents, etc.

For brokers and real estate agents, the adoption of Proptech solutions means:

• Easier data collection & AI-driven marketing to screen and evaluate the development, investment, leasing, buying, and selling processes. Pair this up with the ever-expanding potential of proptech big data analytics for structuring and documenting large data sets, and you’ll find yourself fully equipped for conquering more deals.
• Automation of paperwork & cost reduction with document management tools, reporting systems and CRMs to streamline your brokerage back-office processes, hence saving time on more important tasks like market research, communicating with customers, and closing deals.
• Secure remote real estate transactions & self-help services (chatbots and virtual assistants) for a faster and easier buying experience. No more tons of paper to read and sign at closing and lower wait times,
• More engaging customer experience. With VR and AR immersive environment and simulation, brokers and agents can expand the audience reach and promote properties faster, since VR tours reduce the need for face-to-face interaction.

 

Property technologies have also changed the way landlords, property managers, facility operators, and tenants interact. Here is what Proptech has brought for both parties:

• Detailed 24/7 actionable insights into how tenants utilize the space, enabled by networks of smart devices and sensors (IoT). Managers can operate the property remotely with automated energy and security management. These solutions track the budling’s health, send real time alerts and overall serve as data centers accessible on both web and mobile platforms.
• Quality communication with tenants, maintenance teams, and any other parties involved. With information caught on time and the data stored, no detail from previous conversations will fall through the cracks! A great way to retain tenants, right?
• Streamlined booking for hospitality managers. The proptech definition partially overlaps with the hospitality industry as well. Here, hospitality property managers would definitely benefit from real-time data on property availability, streamlined payment, and email marketing, hence get better tenant experience.

 

The next are real investors and venture capitalists. Here is what has positively changed at the intersection and real estate and technology for them:

• Improved market research to track the development, investment, leasing, buying, and selling opportunities. With proptech portfolio sourcing solutions, an investor can gain access to the latest market trends and get insights on property ROI and assess investment risks with predictive analytics;
• Secure contracts with no “middle man” that might have misaligned interests in the property purchase and sale process;
• Streamlined transactions. E-signatures, online payment systems, and digital document management eliminate paperwork and help investors close deals faster.

 

For Fintech specialists, the current state of technology and real estate looks bright.

• New technologies like automated valuation models streamline the underwriting and property appraisal processes due to the access to real time data and third-party integration with credit systems for accurate borrower’s financial data;
• The emergence of real estate technology in fintech like money lending software reduces the time required for consulting clients with features like loan calculations. For instance, client can decide themselves whether they need to refinance residential properties without consulting a real estate specialist directly;
• Finally, the rise of new technologies like virtual tours and image analysis programs help fintech specialists assess loan-related risks faster.

 

The last category is construction and property development professionals. Whether they’re engaged in building and developing commercial buildings or residential properties, construction teams can all benefit from the new technology that includes automated budgeting, estimation, planning, and scheduling.

• Building information modeling (BIM) systems and jobsite management tools help teams ensure safety and avoid construction mistakes during the actual building process;
• Project management tools streamline communication with suppliers, hence, reduce the number of delays;
• Solutions like customer relationship management (CRM) systems and data analytics software provide users with centralized data management and data visualization & reporting for smart construction management.

Why Ascendix Among Proptech Real Estate Companies?

80% of companies implementing prop tech solutions benefit from better operations and deliver services of higher quality.

If you don’t want to lag behind real estate digitalization, you need to nurture your digital capabilities and adopt innovative approaches. With no previous experience in tech, it might not be an easy task to pour innovation and technology into your business straight away.

This is where Ascendix comes into play. We have been in the real estate market for more than 25 years and served the needs for technology in real estate of the biggest industry players, like JLL, Hanna Commercial Real Estate, Cresa, and others.

So, whatever your Real Estate niche is, we’ll fuel your business with Proptech innovation and:

• Power up your business with custom-made & feature-rich CRM software (you can also make use of our ready-made AscendixRE CRM platform that has been tailored specifically for real estate specialists);
• Integrate third-party proptech solutions into your existing software;
• Modernize your legacy platforms to keep up with evolving customer needs and technologies;
• Bring robust proptech Big Data analytics to keep track of all your datasets and come up with accurate predictions and trends for your customer’s behaviors, property price, and potential risks;
• Automate your back-office processes and offload unnecessary paperwork to save time for the essentials of your business;
• Reduce costs spent on unnecessary brainwork with custom-developed web and mobile applications.

We make sure your proptech platforms, mobile and web applications are downright ready for success — you focus on your business core activities to be at the top of the game. Contact Ascendix and we’ll make your Real Estate Business stand out together.