Latin America and the Caribbean have the highest proportion of city dwellers in the world, according to research by the Inter-American Development Bank (IDB). The real estate market has reinvented itself in recent years thanks to technological innovation and digital transformation in some of its processes that bet on the development of this industry with the inclusion or optimization of common processes in this market.
Protech, technology in favor of real estate development
Proptech is an acronym for “Property + Technology” and refers to ventures or startups that offer innovative products for the real estate industry or new business models that seek to transform it. Some examples of this industry are software such as Rightmove, Opendoor or Zoopla; as well as other hardware, materials or manufacturing tools such as 3D printing. In addition, Proptech embodies the transactional side of the property industry, and at its extremes touches on FinTechs, construction technology and smart cities.
According to Unissu, the certification platform for Proptech companies in Latin America, there are 350 companies dedicated to developing projects of this type, which are divided as follows:
Evolution from Real Estate to Crowdfunding Platforms
Collaborative Participation Platforms (CPP) aim to encourage investors, entrepreneurs or individuals to contribute capital according to their income to develop real estate projects with great growth potential using Crowdfunding and Crowdlending systems. These trends are already present in some countries such as: United States, England, France, Spain, Canada and now it is the turn of Latin America.
According to an article on the website ECIJA.com, Crowdfunding “seeks to raise financing through a plurality of investors with the objective of investing in a real estate asset for its rental and future sale“. While Crowdlending seeks to “raise a sum of money in order to grant a loan to a third party, which will be used for the purchase of land or the construction of a property, to obtain in turn a return on that investment, as a kind of bank loan composed of principal, which would be the amount invested, and interest, the remuneration that the investor would obtain“.
Trends in Real Estate Technology for 2020
An article developed by TICBeat.com summarizes five technological trends that are turning upside down the Real Estate sector in Latin America and the world:
Big Data
Applied to real estate, Big Data allows individuals and companies to make informed decisions regarding investing, managing and operating based on such macro data analysis. For example, it can be used to provide information regarding property history, property cost, neighborhood details, mortgage payment calculation and even to forecast its future revaluation taking into account different parameters.
Virtual Reality (VR) and Augmented Reality (AR)
VR and AR applications are put at the service of a potential buyer who can now fully see a property even when it has not yet been built. There are companies specialized in offering 360-degree videos that allow to know in advance how the property will look like, and become a useful tool to increase the number of closed transactions.
Chatbot
Applied to the real estate sector, the development of algorithms and the chatbot tool has allowed the user to obtain the valuation of their home in two minutes and through the cell phone, a process that could take several weeks in an analogical way; this is what Jesús Pérez Picó, CMO of ProntoPiso, a company that has launched a chatbot service to value homes online, points out.
Drones
Drones are capable of reaching the top floors of large buildings and taking inspiring panoramic images of areas on any surface ranging from waterfront properties that make prospective tenants dream, to images of a single-family home and the neighborhood in which it is located.
Blockchain
Blockchain’s applications to the real estate industry are diverse. Some companies implement it to process rental payments, eliminating intermediaries and reducing transaction costs. Others use it to appraise homes or validate information before third parties, so that any user can use it in the different processes that require an official document, such as applying for a mortgage, with the consequent savings in time and costs.
