While technology has seeped into and disrupted most industries that weave the fabric of the U.S. economy, real estate (the largest asset class in the world) has been slow to adapt to the tech revolution. But the changes property management software, or proptech, can bring to the industry and our lives are more profound than you might think.

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In this article, we’ll look at some exciting proptech trends that will revolutionize how we engage with property management — from virtual house hunts to AI-powered investment insights and everything in between. Let’s talk shop.

Article Roadmap

• Key Takeaways
• Top Proptech Trends
  • Big Data
  • AI and ML
  • Crowdfunding and Fractional Investing
  • Aggregation Platforms
  • Immersive Technologies
  • IoT and Smart Homes
  • E-Signatures
  • Blockchain
  • Transforming Commercial Real Estate
  • ESG Values and Green Construction
• FAQs
• Next Steps

Key Takeaways

• The global proptech market is expected to grow from $18.2 billion in 2022 to $86.5 billion by 2032 at a 16.8% CAGR.
• AI and ML will play a big role as the real estate industry adapts to big data and ponders over generative AI’s applications and implications.
• Property aggregation and crowdfunding platforms pave the way for small investors to enter the industry and develop unique solutions to tackle rising home prices.
• Demand for immersive technologies and smart homes continues to rise as millennials and Gen Z take over the home buyer’s market.
• Smart contracts using blockchains can revolutionize the commercial real estate sector as remote work continues to pose issues for commercial landlords.
• With stricter environmental regulations, proptech can help firms comply with ESG values and ensure minimum environmental impact during construction.

Top Proptech Trends

The global real estate industry is valued at $3976.18 billion in 2023 and is forecasted to grow at a healthy pace of 7.6% CAGR till 2030.

As the demand for housing grows with the world population, the real estate sector is ripe for innovations and technological disruptions. Let’s look at the most exciting proptech trends to look out for in 2024:

1. Big Data

Traditionally, property managers made decisions based on experience, expertise and knowledge. But digitized operations generate big data. Collecting and analyzing this data can help you identify better investment opportunities, streamline internal processes and improve tenant experiences.

For example, big data analytics helps you get real-time and micro-level insights on opportunities and risks of investing in a specific neighborhood instead of analyzing homogenous city blocks. Similarly, you can collect and analyze historical data on building systems such as thermostats, HVAC and utilities to identify inefficiencies, manage expenses and perform predictive maintenance.

A few other common applications of big data in real estate are:

• Demand forecasting
• Predictive analytics
• Tenant screening
• Customer segmentation
• Targeted marketing campaigns and much more

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2. AI and ML

The global market for AI in real estate is expected to grow at a 35% CAGR and reach $1335.89 billion by 2029, and we can see why.

While big data in real estate is about structuring vast amounts of information, AI and machine learning can help you analyze, learn and make sense of this collected data. It processes historical data on sales, operations and markets to identify trends, predict demand and set a property’s optimum valuation.

But data analysis isn’t the only benefit. Chatbots powered by generative AI have become perfect assistants that automate and increase interactions with website visitors and serve as a 24×7 portal for tenant support. The global chatbot market is expected to reach $21.08 billion by 2028, growing at a 29.18% CAGR.

The economic potential of generative AI is immense across every industry and is expected to add $2.6 trillion to $4.4 trillion in value to the global market annually.

For property management businesses, AI can simplify the application and leasing process, answer maintenance calls, and personalize interactions based on past chats. A few other benefits include:

• Better lead generation using NLP to focus on suitable customer segments
• Personalized customer suggestions based on history
• Creating building information models (BIM) to assist construction
• Investment insights and tips while purchasing or selling real estate
• Automated back office processes to avoid manual errors

3. Crowdfunding and Fractional Investing

Harvard’s State of the Nation’s housing report found that nearly 2.4 million potential homebuyers were priced out of buying a house as the annual income required to pay for a median-priced home rose from $97,400 to $117,110 in March 2023. It has led people to pool resources to invest and co-own a property, a practice called real estate crowdfunding.

This arrangement lets residents keep their occupancy rights, and fractional investors can pay a small amount to get a stake and receive rent from properties typically reserved for large real estate investment trusts (REITs). This fractional ownership suits every involved party, and that’s why the global real estate crowdfunding market is expected to achieve a 50.9% CAGR from 2022 to 2032.

Wondering how to find such a pool of investors? Read on.

4. Aggregation Platforms

Property aggregation platforms are websites and apps that pool information on thousands of properties from multiple online channels to let homebuyers and investors analyze real estate easily. Some of these platforms are aggregators that buy mortgages from financial institutions at a discount, divide them into smaller mortgage-backed securities (MBS), and sell the MBS to retail investors for a profit.

These platforms are the backbone of the crowdfunding market, democratizing the real estate industry by offering access to small investors for as low as $50. They can also help:

• Investors get access to a large and centralized portfolio.
• Enable investors to find their ideal property in a suitable neighborhood using analytics tools.
• Investors can find like-minded people to start crowdfunding campaigns.
• Gives property developers access to proprietary advertising tools.
• Makes it easier for developers to get funding.

5. Immersive Technologies

People are used to the ease and convenience of searching for homes online even though the pandemic is long over. Around 99% of homebuyers aged 24 to 57 used the Internet to find homes last year, propelling the global market for AR and VR technology in the real estate industry that’s expected to grow at a 38.12% CAGR till 2028.

Virtual reality (VR) can create a property’s accurate online representations, allowing buyers to tour multiple sites anytime from their couch. Augmented reality (AR) allows landlords to stage interior designs and furniture placements in an empty room to offer an idea of what the house might look like and improve touring experiences.

But the wonders of VR and AR don’t just stop there. A recent Deloitte market report states that business leaders are closely monitoring the impact of the metaverse on the industry. It can enhance and integrate real-world activities like exhibitions, trade shows, weddings and workplaces with a digitally staged environment using AR and VR.

Even though most of the metaverse concepts are up in the air till now and years away from fruition, you should explore their implications to stay ready when this inevitable disruptor hits the market.

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6. IoT and Smart Homes

Internet of Things (IoT) is an umbrella term that refers to every device (like refrigerators, digital locks, thermostats, smart lights and voice assistants) that connects to the Internet to send data and react to commands. IoT allows property managers and firms to track and monitor their usage remotely. You can analyze the data to identify patterns, reduce energy waste and create secure smart homes.

According to the Future of Real Estate report, smart features, new builds and sustainable materials are the top interests of Gen Z homebuyers. Another recent report found that there could be over 29 billion IoT devices connected worldwide by 2030.

With the global IoT market growing from $662.21 billion in 2023 at a 26.1% CAGR and the smart homes penetration rate expected to be 28.84% by 2027, it’s evident that the world is moving towards a new normal where people can control every aspect of their house from a mobile device.

IoT devices can help you:

• Track data for predictive maintenance
• Promote contactless touring and open house experiences with digital locks
• Receive insights to cut down on energy usage and wastage
• Create integrated digital ecosystems to improve lifestyle

7. E-Signatures

The global digital signature market is expected to grow at a 35.6% CAGR, and search volume for the digital signature keyword is up by 141% year-over-year.

This growth is because of the two primary benefits of eSignatures — the flexibility of signing from anywhere and the security of not having information stolen. Today, digital documents have lock settings, encryption, evidence-based authentication and audit trails to ensure safe storage and avoid forgery.

Many cloud-based apps are also building integration with Google Drive, Dropbox and other storage services to disrupt the online notarization industry. The idea is to allow parties to get on a video call from anywhere and put digital stamps on fraud-proof smart contracts using blockchain.

8. Blockchain

Blockchains collect transactional data in “blocks” and link them together, forming a ledger chain that can be shared but not edited or forged without leaving a footprint. Its application in this industry wasn’t apparent, and a 2022 survey found that people expect blockchain to be one of the least impactful disruptors in the real estate market.

But it’s all changing as we learn to tokenize leases, mortgages, securities and other financial instruments. Blockchain-powered smart contracts are revolutionizing how we purchase, sell, lease and manage property transactions.

More than a contract, these platforms store leases, rent structures, expiry dates and every other detail in blockchains. They can automatically implement an action (such as transfer, refund, cancellation or renewal) when conditions meet the criteria.

The global blockchain market is expected to grow at 85.7% CAGR and reach $2,334.46 billion by 2032. According to a report, blockchains are the future of commercial real estate, and some of their applications are more than just food for thought:

• Property Searches: Buyers can view tokens to get real-time accurate property information. No more jumping between multiple listing services to get a clear view of an investment.
• Pre-Leasing: Smart contracts automatically adjust a unit’s pricing in real time based on market conditions. You can define automation for underwritings, financial evaluations and mortgage commitments to streamline pre-leasing processes.
• Leasing and Cash Flow: Automate an agreement with protocols within which every party must perform. For example, you can automate rent and CAM collection, and the smart contract tracks late payments, charges penalties and terminates when a tenant fails to comply.
• Title Management: Get rid of paper-based titles and add every detail to your property’s digital entity that automatically logs changes through multiple encrypted blockchain nodes. It ensures safety, accountability and easier title assessments.
• Decision-Making: Use a transparent database that you can share with every involved party to reduce data redundancy, duplication, opaqueness and silos.

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9. Transforming Commercial Real Estate

The pandemic opened Pandora’s box, introducing the world to the possibilities of remote work. And now, even though the pandemic is over, people aren’t ready to return to their offices.

The biggest benefit of remote work is the flexibility of choosing when to work and where to live. According to a survey, 98% of workers would prefer remote work at least some of the time for the rest of their careers.

But if everyone is working from home, what happens to offices? Today, most firms either downsize or don’t renew leases, while some hold onto empty offices as they couldn’t get out of a tricky lease.

A Deloitte report found that expense mitigation in office spaces is one of the top priorities of businesses as revenue expectations hit an all-time low since 2018. Moreover, surveyors expect the cost of capital (50%) and capital availability (49%) to worsen through 2024. But does that mean the end of the commercial real estate sector as we know it? Certainly not.

According to Byron Carlock in PwC’s Emerging Trends in Real Estate report:

There are several factors at play determining both the near and long-term future of the industry. Although real estate capital markets are constricting, they are still open for business, investors are still buying high-quality properties, lenders will continue to lend, and companies should move forward with cautious optimism through this current cycle and prepare to adapt to quick market changes.”

Here are a few ways you can use proptech to ride out this slump and reposition your firm for stronger returns in the future:

• Provide flexible lease terms and duration to prevent businesses from being discouraged from renting your unit.
• Communicate efficiently and offer prompt and personalized services using CRMs for commercial real estate.
• Use smart contracts to automate and simplify lease lifecycle management.
• Streamline the tenant experience with self-service tools provided by commercial property management software.
• Understand customer sentiments and market trends with BI tools to adjust rent structures and revenue strategies.

10. ESG Values and Green Construction

Real estate doesn’t go hand-in-hand with nature conservation, as one needs to make way for the other. Despite an increase in investments in low-energy consumption products last year, the International Energy Agency reports that building operations account for 30% of global final energy consumption and 26% of global energy-related emissions.

Tightening ESG regulations and initiatives like the Net Zero Carbon Buildings Commitment have put the onus on property managers and firms to innovate green initiatives while maintaining the bottom line. But it’s easier said than done. According to the Deloitte report mentioned above, nearly 60% of surveyors reported that their firms lack the data and internal control required to meet ESG standards.

And it’s not only government bodies and eco-enthusiasts that are urging the real estate industry to adopt more environmentally sustainable approaches. Customers and tenants also prefer a greener and healthier environment.

According to the Future of Real Estate report, 75% of Americans are willing to pay more for eco-friendly properties. Having a “green home” is important to 91% of Gen Z, 85% of Gen Y and 73% of Gen X, making environmental sustainability a profitable venture for the industry.

One way to control total emissions is to focus on construction. Green construction is a philosophy that only uses recyclable materials and adopts environmentally responsible and resource-efficient practices throughout the construction phase.

A few other unique strategies that you can adopt to control your business’s carbon footprint are:

• Use IoT devices to track energy consumption and reduce the energy footprint.
• Onboard local municipalities on your property management software for transparent lines of communication with tenants and authorities.
• Use an analytics module to track ESG data and achieve environmental sustainability goals.

Deploy sensors to ensure the usage of low-carbon emission materials to construct green buildings.

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FAQs

What is proptech?

Proptech, or property technology, is a tool that streamlines and optimizes real estate buying, selling, marketing and management. It’s the underlying technology that real estate professionals, managers, underwriters, title companies and banks use to improve systemic inefficiencies and digitize transactions from start to finish.

Its examples can be a platform that directs retail investors to ideal real estate assets or property management systems to run residential or commercial rental properties. As an individual consumer, proptech might seem distant, and you might think it doesn’t affect you. But don’t be fooled.

Airbnb, one of the first consumer-facing proptech companies, changed how travelers research and book accommodation. Its fundamental goal was to disrupt the travel reservation sector by marrying it with the latest technology — like how Uber exploded the transportation sector, Google transformed the information industry, and Amazon revolutionized eCommerce.

What are the benefits of using proptech?

Proptech simplifies the daily routine of every player in the real estate market, including brokers, landlords, tenants and investors. Let’s look at some of its benefits based on where you stand on the property management spectrum:

Brokers

• You can consolidate data from every disparate source and use AI to unearth insights and crunch numbers.
• Automated administrative tasks allow you to streamline back office operations and free up your time to focus on market research and business scaling.
• Avoid drowning in paperwork by designing eDocuments and digitally enabling every party to sign remotely.

Landlords and Tenants

• You can streamline communications with digital portals for owners and tenants. Record every interaction for accountability and year-end audits.
• Landlords have 24×7 visibility into property utilization with smart devices and IoT sensors. All the building’s security data is available on the landlord’s mobile screen.
• There are no geographical boundaries with virtual home inspections, tours and open houses. Landlords and tenants can perform every activity from the comfort of their homes.

Investors

• You can improve your market research with robust analytics modules.
• Use planning and management tools to ideate, design and monitor construction processes while avoiding human error and derailment from original plans.
• You can save costs by eliminating mediators during purchasing and selling a property.

How do I choose proptech?

Proptech includes various types of tools for different business aspects, such as:

• Construction or project management
• Investment analysis
• Asset utilization
• Daily management and maintenance
• Transaction management and accounting

The best proptech for you depends entirely on your business and what it needs. Internal analysis and market research are crucial to get the best bang for your buck. Start by using our free requirements template to prioritize your needs based on top features in the market.

Beyond that, we’ve boiled down the complex software evaluation process to nine easy-to-follow steps that ensure you consider all your options to choose the perfect solution that takes your business to the next level. We call it the Lean Selection methodology. Give it a try!

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Next Steps

The coming years will have new challenges and technologies for property managers. As the winds of change blow through the real estate sector, knowing the right proptech trends can help strategically position your business to reap maximum benefits from opportunities and prepare for major threats.

The right proptech solutions can help you adjust to these trends and stay ahead of the competition. Check out our free comparison report that helps you compare leading vendors by features, pricing and other custom criteria to find what’s best for you!

Which 2024 proptech trend intrigues you the most? How are you preparing for the future? Join the conversation by dropping a comment below.