Technology has found its way into just about every industry, and real estate is no exception. From chatbots and virtual reality devices to artificial intelligence–powered personal assistants to online mortgage platforms, the so-called “proptech” industry is working to improve the complicated process of building, selling, and buying homes.
Proptech will streamline not only consumer processes; real estate agents will benefit, too. These real estate technology startups are looking to help agents nurture clients through chatbots and show houses using virtual reality, among other common tasks. This technology may come to define the future of the real estate industry, so wise agents will watch trends develop, or even visit top proptech hubs, to stay relevant in a market that is modernizing quickly.
The proptech industry is growing out of typical hubs, like New York and London, as well as big cities in Canada and Latin America. These markets are already operating on the cutting edge of the real estate industry, but that technology will eventually make its way into almost every market. Agents who want to integrate tech into their work should pay attention to these hubs and learn from their development to apply the same practices in their home towns. Here’s how four of the world’s top proptech hubs are innovating for the future of the real estate industry.
1. New York
New York is the undisputed capital of the global proptech sector. With over $657 billion worth of investable real estate, as well as some of the world’s top developers, architects, agents, and designers, New York’s importance for the real estate industry is unsurprising. Both the local government and private sector are committed to helping New York remain at the forefront of the movement.
In 2017, the Real Estate Board of New York launched the REBNYTech Committee to promote proptech development in New York. It started a real estate innovation expo, complete with a proptech “hackathon” where startups could compete for up to $15,000 by developing apps and other solutions during the expo. Local proptech accelerator MetaProp has also partnered with the Center for Urban Real Estate to create a proptech class for Columbia University.
Proptech startups in New York will not lack for inspiration. Among New York’s top established proptech companies are WeWork, Compass, Cadre, and Streeteasy, many of which have already reached what venture capitalists call “unicorn” status, meaning they are worth over $1 billion.
If New York tops the global market, London crowns the European proptech industry. Accelerators and investors like Pi Labs, Proptech Capital, and Concrete VC have helped modernize a sector that has been famously slow to accept change, especially in the UK. Today, 42 percent of tech experts place England’s capital first in Europe for real estate technology.
London is home to startups like Dot, which is making property investment easier; Goodlord, offering software that streamlines the renting process; and Homie, a concierge service for young people looking to rent in the city. In 2017, London also got its own proptech organization in the form of the UK Proptech Association, which sets out to “represent and assist companies and individuals who are active in the UK’s emerging proptech sector” through trade shows and events.
Canada might not be at the top of most people’s minds as a hub for innovation. After all, the massive country with just 30 million inhabitants has few cities that could rival New York or London. However, the Canadian real estate market has seen 1,000 percent growth over the past six years, partially due to a wave of international investment from Asia. Many of these buyers research and explore properties online before buying, putting pressures on Canada’s real estate industry to modernize.
While several Canadian cities have committed to bringing tech into real estate, Toronto leads the charge. Canada’s most prominent proptech accelerator, Colliers International, and its largest real estate company, Brookfield, are both based in Toronto, as is Google’s Sidewalk Labs. Brookfield recently committed to investing $300 million in real estate technology over the next few years.
Santiago is home to Latin America’s tallest building, the Costanera Center. The Chilean capital also hosts a vibrant proptech industry that receives support from local actors like NXTP Labs, CORFO, and the Chilean Real Estate Development Association. These groups helped organize South America’s first proptech summit in July. Chile is also the home of one of the world’s most prominent architecture web sites, ArchDaily.
Chile has one of the most sophisticated housing and mortgage markets in South America, making it an ideal location for testing new real estate tech. However, Chile’s Ministry of Housing is still the country’s largest real estate firm and its second-biggest mortgage lender. Startups that are interested in disrupting the industry may need to fight for space. Nonetheless, new companies like Capitalizarme, Portal Inmobiliario, Propiedad Facil, and SentioVR have chosen Santiago as their base as they help modernize the South (and North) American real estate industry.
Of course, it’s about more than just these four cities; technology is seeping into real estate from every corner of the globe. Silicon Prairie News recently named the American Midwest as a possible future hub for real estate tech, since it’s a place where people invest in homes for the long term, rather than trying to flip them. Asia—particularly big cities in China, India, and Singapore—has also invested in real estate tech to provide solutions for a rapidly growing population. Proptech is a global phenomenon that is dragging a very traditional industry into a modern era that’s consumer-focused and efficient. While it’s still relatively concentrated in a few hubs, real estate technology will continue to trickle into smaller markets as it becomes more mainstream in its central cities.