The overall global situation is bleak, and according to the World Economic Forum, the impact of the economic outlook for this year is felt more strongly in Europe and the United States. At the same time, growth is more significant in the Middle East, South Asia, and North Africa. 20% of respondents in a survey conducted by the organisation are betting on the chance of a global recession, but it’s a matter of geographical region. The global economy was thrown into disarray in 2022, with real estate and cryptocurrency bearing the brunt of the consequences.
Cryptocurrencies suffered a comedown, being hit the hardest in November of last year and sending shockwaves that are still being felt across the cryptosphere. However, they’ve made their way into the housing market, with millions of dollars worth of cryptocurrency being poured into real estate one year ago in Miami only. But buying a property with cryptocurrency is extremely rare, and the traditional way is sticking around, so looking for the best way to buy Bitcoin to conduct transactions makes more sense when purchasing a plane ticket or other commodity.
As we head into 2023, real estate is set to undergo significant transformations through constant development and ever-developing technologies embraced, so let’s check out the most noteworthy tech trends driving innovation in the housing market this year.
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Virtual Reality (VR) allows users to immerse themselves in virtual surroundings in a way that resembles reality, enabling them to experiment with unlimited resources. It is becoming more commonplace in the real estate industry in 2023 as it can offer a computer-generated picture of an individual’s actual environment. Thanks to developments in the real estate industry, it’s now possible to engage in a virtual home tour and understand what the property can offer on a deeper level.
International investments would benefit the most from a similar approach as potential purchasers may discover a property remotely from anywhere in the world. You can’t sell a home that doesn’t exist, but customers can gain an in-detail mental image by exploring it virtually. Therefore, digitally altering a location lets customers see its potential and make more informed purchasing choices.
VR and AR technology are not new phenomena. However, the pandemic and policy restrictions have smoothed the way for real estate owners and brokers to present their assets that would have otherwise remained off the table for potential customers. Overcoming the barriers was only possible by creating online tours instead of in-person showings.
The usage of AR and VR technologies in the housing market is expected to increase, especially among bankers. While it’s true that no virtual “explorations” don’t compare to physical showings and that potential home buyers are more inclined to visit the property physically, no one can deny the advantages of these emerging technologies in the real estate industry. With its expanding popularity in home-buying, VR may become the standard for rental ads.
Growth in commercial real estate has slowed for the past few years. While it’s among the oldest markets in the world, it’s only recently that it began to change. The catalyst for transformation is the rising digitalisation of real estate ownership and the increasing demand for real-world assets protocols with an adjusted balance between risk and reward. As all the transfers in the housing market, like signing, recording, and electronic notarisation, are conducted online, real estate ownership behaves like a digital asset.
Proptech 2.0 primarily focuses on creating services that make purchasing, selling, and managing residential and commercial properties easier, cheaper, and quicker. But as RWA moves towards digital currency, Proptech 3.0 becomes the new norm in innovation, optimising and securing the ecosystem.
The outlook for fractional investments is promising for 2023 and beyond and aims to smooth the path for investors to enter the real estate market. However, fractional ownership is nothing new in the housing market, and investors have long been partnering to hold fractions of real estate through systems like real estate investment trusts. Yet, tech advances are speeding up the process in a way that can be perceived as democratising real estate.
Most REITs, for example, are available only to qualified investors and come with a minimum investment threshold. With the innovations in fractional ownership and Proptech platforms, more individuals can venture into the market and buy fractions of more prominent real estate projects.
Evolution in property management software
Renters, owners, and agents deal with a lot of paperwork, laws, and regulations to keep up with the ever-evolving housing market. However, in the digital era, customer relationship management (CRM) services are on the rise, optimising the processes of managing and storing details of agreements, customers, and so on. These cloud-based systems make information accessible from anywhere at any time, and together with cloud computing, they are paving the path to customer-centric property as a service (Paas).
Another kind of property management software gaining ground is the tenant experience platform, which makes direct interaction between renters and landlords easier through a direct channel.
Drones and BIM
In the past, building designers and engineers would struggle to coordinate their efforts on a single blueprint, meaning there was plenty of room for mistakes and misunderstandings. Nowadays, Building Information Modelling (BIM) has become increasingly commonplace, allowing for digital information to be connected, analysed, and shared in different ways, making it easier to choose a home. Taking advantage of BIM to collaborate on building design and operation make mistakes more difficult to infiltrate, meaning that professionals in the housing market can take on more projects.
Drones are rising in popularity for their ability to capture aerial imagery and offer an overhead view of a location. Therefore, they’re valuable assets in the real estate industry. They can help owners and agents see the property’s future uses and layouts before closing a deal and offer more new vantage points to provide more details of the asset.
The lowest GDP since 1960, the risk of recession, political instability, and other hot topics are under the microscope right now, but the real estate industry doesn’t pass unexamined, either.
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