6 Transformative Impacts of Technology on Real Estate

Ramesh Nair, CEO & Country Head, JLL India

Real estate in India may lag behind in plucking the fruits of enhanced technology - but glob­ally, the field of technol­ogy has made immense progress and there is definitely much to leverage. In fact, there are at least six technol­ogy-driven changes which can poten­tially transform the sector.

Essentially, these evolutionary steps in technology can completely usher in an era of ‘experiential’ real estate for consumers, developers and consultants – and as a direct conse­quence, transform the way in which real estate business is done:

1. Automation:

More and more real estate marketing is done via online channels these days, be it online portals or cross-platform mobile applications. There is a huge opportunity in more evolved automa­tion of these online channels, where the updating of property listings could be carried out using advanced machine learning techniques. List­ings and other stock real estate data is very dynamic in nature - and with more Indian states making lease data freely available, there is more scope for automation.

Also, since it is now mandatory for builders to notify all residential sales and similar project-related up­dates on the RERA websites, quick automation of data like units sold, localities where maximum sales have taken place and information on oth­er upcoming projects can help close deals faster. To have faster access to such information can help brokers and consumers close transactions more efficiently.

2. Artificial Intelligence:

Moving further up from automation, technology today performs tasks which require higher forms of intel­ligence. Artificial Intelligence (AI) tools allow computers and machines to function more intelligently. In the real estate sector, the increased use of machine learning techniques and deep learning will boost the quan­tity of information available, as well as the efficient processing of this in­formation. Improved computation power of machines aided with smart­er algorithms will make it easier to grasp ‘moving parts’. The digitizing of data assets is becoming less cost and labor intensive with the help of AI technologies.

Information in the real estate sector is currently available in varied forms. If we look at commercial real estate markets, lease documents are often not standardized, presenting a challenge in evaluating one vs. an­other. Soon, advanced AI techniques (loosely known as deep learning) will enable machines to comprehend the various clauses and sub-clauses in such leases.

3. Drones to enhance the human ex­perience:

Advancements in artificial intelli­gence, specifically in machine learning and deep learning, have contrib­uted to the increasing use of drones. These are helpful in creating 3D im­ages and videos of office spaces which help clients narrow down on property options. Drones are being used very effectively in America and Europe for marketing real estate properties with compelling and dramatic images. Such images help differentiate prop­erties, especially on online portals, which are continuously competing for consumer mindshare.

4. Virtual Reality:

Virtual reality or VR technology - a mix of architecture design and gam­ing software - will soon enable con­sumers in India to get a real-time experience of living in their yet to be constructed homes. Through the use of special glasses, customers can view 3D videos of the properties they are interested in. This can help them to shortlist properties before making the final choice.

Since this is still an expensive technology, it is currently being used only in high-end property market­ing – mostly while marketing luxury housing options to NRIs. However, the cost of technology is constantly reducing with faster adoption and mass production. Soon, Mr. Every­man may inspect his mid-range home options in the same way.

5. Internet of Things (IoT):

Internet of Things (IoT) is a giant network of connected factors, includ­ing people. The relationship could be of people-with-people, people-with-things and things-with-things. The use of sensors to track the move­ment of objects is commonplace to­day. With sensor technology getting cheaper, we will soon find a much larger use of sensors across office, re­tail as well as residential spaces.

This will become especially useful for the facilities management busi­ness. From small requirements like identifying the need for changing a fused bulb to larger issues like man­aging car park spaces in large office complexes, IoT is ready to take off in a big way. Retail departments can look at using display shelves linked to sensors which indicate when prod­ucts need to be restocked. Residential spaces already use sensor driven lights and very often sensor-linked water flow in gardens. On a much larger scale, Smart Cities will have digital technology embedded across all city functions.

6. Blockchains:

Information held on a blockchain exists as a network of nodes. It is a shared, continuously reconciled data­base which is hosted by millions of computers simultaneously, and its data is accessible to anyone on the Internet. This is still an evolving con­cept worldwide, but blockchains will soon play an important role in the storage of information for real estate transactions. For instance, we will see the evolution of Smart Contracts which make the execution of real es­tate transactions much more efficient.

Will we eventually see a time where real estate transactions are car­ried out through cryptocurrencies? Maybe not anytime soon – and defi­nitely not until justifiably conservative financial regulators such as the RBI become comfortable with currencies like Bitcoin in India. However, given the massive evolutionary steps taking place on most other fronts, the future real estate marketplace in India may be open to this, as well.