The global real estate market is among the many industries that is bearing the brunt of the ongoing COVID-19 pandemic. The US recorded a plunge of a whopping 33% in its GDP in the April-June quarter, with the property sector shedding trillions of dollars and being a major contributor to this loss. The pandemic has forced people indoors and left office spaces, restaurants and cafes, shopping malls and other places of social significance empty and deprived of revenues.
When the real estate market will spring back into shape remains to be seen as the world is still struggling to cope with the pandemic, but one thing is certain – the market will not be the same anymore. By that, we mean, technological revolution, which transformed major sectors like retail and transport, is about to change the way we engage with property. Here are 7 ways in which technology is set to revolutionize the way this market operates –
- Social Media Marketing – The stay-at-home lifestyle imposed by COVID-19 has forced businesses to remodel their advertising strategies. From advertising outdoors, companies have had to shift to digital forms of advertising as their audience is now mostly at home spending a significant chunk of their time on phones and laptops.
The real estate market, which earlier relied on large flashy billboards for advertising, will also have to embrace digital marketing trends such as social media marketing. It will have to learn to showcase its products and services on the humble phone screen via ads and other content.
- Targeted Advertizing – Targeted advertising refers to serving ads to specific customers who, you know, are interested in your product or are likely to become interested in it. You can gain insights about such customers from their buying history and behavior on the internet.
The property market will also need to utilize targeted advertizing for better ROIs on its ads. Companies will have to invest in gathering high-quality consumer data on the basis of which they can target only those potential customers that have a higher chance of converting into paying customers.
- Emergence of Virtual Marketplaces – With more and more consumers discovering the joys of online shopping as their favourite brick-and-mortar stores shut shop, it is likely they will turn to using the internet for searching and discovering properties too. This will lead to the emergence of more virtual marketplaces for real estate. Thus, in the future, we can expect the role of the real estate agent to be either be greatly minimized or transformed altogether.
- Virtual Reality-Powered Walk-throughs – Social distancing is a misnomer for what the world is doing as a preventive measure against COVID-19. People are actually practising “physical distancing”; they are quite connected to each other socially.
In the context of buying, selling and leasing properties, this will mean that landowner, agents and tenants are interacting with each other as before, but they are doing it virtually rather than meeting face-to-face. Companies that realize that “social distancing” is here to stay as a hangover of the pandemic have even started investing in creating Virtual Reality (VR) aided walkthroughs of properties for their clients.
- Building Information Modeling (BIM) for Showcasing Pre-Constructed Projects – Using BIM, architects design 3D models of buildings for their clients to help them visualize what the actual buildings will turn out to be like. These models help the clients get a good idea of the look and feel of the building, and propose changes before the work starts. BIM technology will be used even more extensively in the future as companies will utilize 3D models of their projects for pitching to investors.
- Digitization of Processes – In vein with the need for creating virtual walk-throughs is the need for digitizing processes that follow. The stakeholders in the real estate market will aim to digitize the process of mortgage from the beginning to the end to eliminate the need for face-to-face meetings. A part of this process is remote online notarization (RON), in which the notary and the borrower get together in a videoconference, and the entire process is completed online. With the emergence of digital signatures, the process of RON has been rendered even more reliable and secure.
- Automation of Processes – The COVID-19 pandemic has intensified the need for automation of tasks and removing human beings from them for reducing the risk of disease transmission. In the real estate market, blockchain technology is being explored for the same.
Smart Contracts are an application of blockchain technology, which allow for the terms of the agreement between transacting parties to be directly written into the lines of code. They can automate transactions between disparate, anonymous parties and even make them more secure. For example, a rent agreement between a house-owner and tenant can be coded into a smart contract. As per the agreement, when the tenant deposits the rent amount specified in the agreement into the house-owner’s bank account, the smart contract will automatically send the virtual keys of the house to the tenant. Thus, the transaction is completed securely without requiring the house-owner and tenant to meet.
In what other ways do you think technology will change the real estate market? Share your views with us in the comments below!