Digital transformation in real estate is one of the driving forces behind this industry’s growth. According to a survey, 80% of real estate companies plan to increase their investments in digital technologies in the next few years. The market constantly evolves; today, younger and more tech-savvy customers require feature-rich real estate apps with great UI/UX design. However, navigating digitalization trends can be challenging, So we present our guide on real estate digital transformation and key tech trends that will impact the industry in the near future.
Real estate digital transformation
Digital transformation is the process of adopting technology solutions to improve operations, enhance customer experience, and maintain a competitive edge. With digital transformation real estate businesses can get numerous benefits. Here are the key ones:
- Improved customer experience. Today’s real estate industry is all about enhancing user experience. Modern audiences demand software solutions with excellent UI/UX design, personalized services, and advanced features. Many trending technologies enable companies to improve customer engagement, reach wider audiences, and increase conversion rates using real estate apps.
- Business efficiency. Many digital transformation examples show that implementation of new technologies allows companies to automate numerous routine tasks and streamline workflows. It leads to an increased business efficiency and reduced operating costs. Plus, employees’ are now able to focus more on strategic thinking and creative problem-solving, and not on routine tasks that don’t require human input.
- Competitive advantage. To stand out in the highly competitive real estate market, companies need to offer truly innovative solutions and services. Hiring a custom real estate software development services provider is not enough; you need to know what features you want to add. By following and implementing tech trends, real estate companies can set themselves apart from the competition and win over younger demographics, which is extremely important in any business.
Now that you know why you should invest in innovative digital solutions, let’s talk about trends that will shape the future of real estate technology in years to come.
Key digital transformation trends
Here are the essential technology trends that drive digital transformation in the real estate industry today and will continue to for the next few years.
AI-powered business intelligence
Artificial intelligence and machine learning have improved business processes in almost every industry in recent years, and real estate is no exception. AI integration is probably the most prominent innovation in real estate. There are numerous AI-powered solutions and functionalities out there, but advancement in business intelligence is the key aspect of digital transformation in the real estate sector.
Leveraging AI capabilities, data analytics solutions can quickly process vast datasets, analyze user behaviors, predict market trends, and accurately evaluate multiple properties at once. Data visualization software allows real estate professionals to easily process information provided by data analytics tools. Using AI-powered tools and features, real estate companies can reduce the probability of human error or subjective judgment, provide personalized property offerings based on customer behavior, accurately evaluate properties, and identify investment opportunities.
With numerous AI frameworks, API integrations, and LLM models available, businesses of any size can benefit from artificial intelligence and machine learning today. In the future, we will see further democratization of this market due to open-source models and more niche solutions for different tasks.
Chatbots and virtual assistants
Artificial intelligence can improve not only real estate business processes but also user interface and experience. One of the main areas of AI implementation in real estate software today is intelligent chatbots and virtual assistants. These tools are widely used in websites, mobile apps, and messaging platforms.
Chatbots and virtual assistants enable real estate agencies to significantly enhance and personalize customer experience and support. AI-powered chatbots can instantly provide answers to client queries 24/7. It allows companies to lower the number of customer support professionals, so employees will be used only for complex situations where human input is needed. Also, conversational chatbots can track user interactions, analyze them, and even offer listings based on this data. Virtual assistants can streamline property searches and automate administrative tasks.
These AI-powered tools can make user journeys more emerging, effective, and enjoyable, increasing conversion rates, generating new leads, and optimizing customer support processes. With advancements in generative AI, conversational AI, and LLM models, real estate companies will continue to integrate these tools into their platforms.
Cloud-based software
Cloud computing has revolutionized the way the real estate industry operates. With cloud-based software, real estate companies can achieve new levels of efficiency. There are numerous off-the-shelf solutions, mostly distributed using the Software-as-a-Service business model. For monthly or annual subscription costs, you can use real estate software solutions without spending money and resources on on-premise hardware and ongoing maintenance.
Also, you can develop custom digital solutions using cloud services, which are more cost-efficient and require fewer IT professionals to build. There are many types of real estate software, from simple property listing platforms to CRM systems and ERP software. However, the main game changer is property management software. These systems for homeowners and property managers offer advanced features for lease management, tenant screening, instant communication, maintenance management, and tracking payments. Property management apps have revolutionized the way residential, industrial, and commercial property is managed today.
Real estate software evolves quickly and property management software is no exception. In the near future, we will see more AI, blockchain, and IoT integrations within these systems which will make them more efficient and user-friendly. We will see more widespread adoption of custom and off-the-shelf cloud-based software with more companies recognizing benefits of cloud computing.
Smart contracts
Blockchain has been mostly used in cryptocurrencies for a long time, but this situation quickly changes. Now many industries, including real estate use this technology for ensuring data security and transparency. One of the main areas of blockchain implementation in real estate are smart contracts.
Ensuring security and transparency of real estate property deals has been a top priority for a long time now with numerous tools, including transaction tracking tools and online contract generators. Smart contracts, self-executing and digitally stored contracts with terms of agreement written directly into the code can solve this problem once and for all. As soon as the money arrives in the seller’s bank account, the buyer receives all rights to the property they paid for, so there is no room for fraud of any kind. The decentralized nature of blockchain makes it almost impossible to alter smart contracts after they are signed.
Trust amongst stakeholders is extremely important for real estate deals, and blockchain can offer a previously unmatched level of trust. Also, smart contracts eliminate the need for numerous middlemen, such as brokers, lawyers, or banks, making real estate operations more affordable. Smart contracts are still far from widespread adoption, but many startups implement them, and we can expect one of them to blow up and popularize this feature any day. To stay competitive, real estate companies need to become familiar with this technology.
Fractional property ownership and tokenization
Blockchain not only serves as a foundation for smart contracts, it is also instrumental for assets’ tokenization and fractional property ownership. Tokenization enables dividing assets into digital tokens, so people can sell and buy only fractional interests. This approach is crucial for democratizing the real estate market, enhancing assets’ liquidity, and allowing investors to purchase parts of properties to avoid risks.
With fractional ownership, a group of people can purchase properties and share ownership. Blockchain makes this process more secure and transparent, so even complete strangers can buy homes or commercial properties and share profits. Just a few years ago, the only option for this would be a real estate investment trust, but they only allowed large investments and many potential clients were afraid of fraud. However, blockchain technology changed this and democratized the real estate market.
Tokenization and fractional ownership are not the most prominent of current trends in real estate, but real estate agents, property managers, and investors need to pay close attention to these technologies. We can see a widespread adoption of these approaches among younger demographics due to high real estate costs and advancements in blockchain.
VR/AR integrations
Online listings with just property photos and videos, even 360 ones, are quickly becoming a thing of the past. Modern real estate platforms need to feature virtual tours that use 3D models and virtual reality technology to appeal to wider audiences and increase conversion rates. VR virtual tours offer insights about the real size of the spaces and their location in the building, can provide details that can’t be captured any other way, and offer customers an unmatched level of freedom in navigating a property.
Virtual reality and augmented reality are not used just for virtual property tours. Construction industry professionals leverage these technologies in Building Information Modeling (BIM) tools that allow them to visualize future properties and validate ideas before making any significant investments. AR features are also widely used for visualizing renovations over living environments.
For a long time, VR and AR were seen as tools for gaming and entertainment, but they slowly found their way into more industries. Today, many smartphones support augmented reality, and VR headsets are more available than ever. According to research, 1.5 million real estate companies will use VR/AR technologies by 2025. So, if you want to stay ahead of the competition, learn about one of the most exciting digitalization trends in the whole industry.
Internet of Things
Internet of Things (IoT) refers to devices and sensors with a constant connection to cloud servers that help them to send and receive information. IoT is the main driver behind smart homes market growth. Smart sensors and devices make our everyday lives more convenient, but in recent years, they have also been used to control electricity usage, water consumption, room temperature, security systems, smart locks, and more. Today, IoT is no longer a novelty but an essential tool for ensuring security, sustainability, and energy efficiency.
Also, IoT integrations are often used for property management. Homeowners and managers can easily monitor property’s physical attributes and metrics. Leveraging this real estate data, you can easily enhance building’s security, quickly identify emergencies, and implement predictive maintenance. Also, property management software is used more and more for monitoring and controlling energy consumption in rented properties.
We see an increasing number of new properties with IoT smart sensors and automation features and older properties retrofitted to provide a smart home experience. In a few years, it will be difficult to imagine property management software without connection to IoT devices, so invest in this technology now.
Conclusion
The real estate market is growing quickly, and competition grows with it. If you still rely on legacy systems or websites with basic functionalities, your competitors that follow and implement tech trends will gain an advantage, and it will be difficult to catch up. So, investing in real estate digitalization is an absolute necessity for companies of any size. If you build a custom digital solution from scratch or update existing software, research the biggest trends and determine which ones will make your customers’ experience more engaging and business operations more efficient.