Industry jargon can be confusing, especially in an industry that seems pretty straightforward. When it comes to real estate, most consider it to be something you simply plan, build, buy/sell, and maintain- there’s really not much that changes. While, at the core, that may be true, how we accomplish these activities is an area ripe for the beautiful disruptive force of technology. Welcome to the murky, expansive, and evolving world of PropTech.
Loosely defined as the implementation of technology in the real estate industry, PropTech, also called REtech (Real Estate Technology), is an abbreviation of Property Technology. Breaking that down further, property, having a usage that dates back to the 14th century, comes from the Old French propriete with an understanding that stems from the Latin proprietatem, meaning ‘ownership, a property’, and can first be found in Daniel Defoe’s well-known 1719 work, Robinson Crusoe, where he writes in the sense of land ownership/living space that: “They..had their Properties set apart for them.” As for technology, which originated as the Greek tekhnologia, meaning the ‘systematic treatment of an art, craft, or technique (specifically grammar)’, though the usage of the word in English can be traced back to 1612, the sense of the term relating to the application of knowledge for practical purposes can first be found in 1829, (oddly) in the writing of American botanist and physician Jacob Bigelow’s Elements of Technology, stating that: “To embody, as far as possible, the various topics which belong to such an undertaking, I have adopted the general name of Technology, a word sufficiently expressive, which is found in some of the older dictionaries, and is beginning to be revived in the literature of practical men at the present day.”
While the origin of today’s term isn’t precise – the best guess for widespread usage is less than a decade old – and nobody is quite sure of what should and shouldn’t be considered PropTech, we can take comfort in two things: it’s not new, and it’s constantly evolving. Beginning in the early 1990s with the advent of specialized PC software for the real estate industry and progressing to the late 90’s and early 2000s, when we began to see property marketed online, automated workflows, and rapid reporting and management, technology has played a major part in advancing real estate for several decades already.
Though the previous iterations made the industry digital, faster, and more agile, we’re currently on the cusp of what could be a massive change in the industry: PropTech is going to make the industry mobile, intuitive, and smart. From the creation and manufacturing of specialized building materials, to construction planning and the use of sensors in buildings, to intuitive and integrated real estate websites, like Zillow and Zoopla, this disruption looks to increase efficiency, maximize profits and communication, and, most importantly, lead to better (and more personalised) experiences. Imagine being able to give Alexa a greater role in your home, submitting a work order for some leaking water pipes using an app on your phone, or (for building managers) being able to immediately alert all tenants of HVAC work being done at a specific time: PropTech has the promise to do all that and more.
Of course, promise will naturally be altered when confronted with limitations, like failed sensors, networking issues, or the always looming threat of compliance issues; however, with global investment in PropTech accelerating from EUR 163 million globally in 2011 to EUR 11.3 billion in the first 6 months of 2019, PropTech has all the potential to build a new future for real estate.