Pandemic Makes PropTech Impossible to Ignore
Will 2020 be a defining year for PropTech?
In an article for Crunchbase News, Christine Hall draws a parallel with FinTech rising from the ashes of the 2007-08 financial crisis.
Just as FinTech companies cashed in on the uncertainty,distrust and anger at established financial systems in the wake of the recession, PropTech companies could be set for a similar redefining role in the post-COVID property industry.
Hall points to the substantial interest from investors as a sign that PropTech is being considered as the answer to the new challenges being faced by the commercial and residential real estate industries (not to mention a few old challenges that have been swept under the carpet!).
PropTech’s big appeal is thus: like many industries, the property landscape was rocked dramatically and suddenly. Fortunately, despite the unprecedented and unforeseen shifts, many PropTech solutions seem readymade for the ‘new normal’.
While it is widely acknowledged that PropTech is like a“toolkit for the real estate industry to dig into right now as it looks for ways to adapt more quickly and on a greater scale,” as suggested by MetaProp NYC General Partner Zak Schwarzman, the ‘who, what and why’ concerning which PropTech companies are likely to benefit the most are up for debate.
Jordan Nof, co-founder and Managing Partner of Tusk Venture Partners, suggests that the most successful companies will be those that help apartment owners keep rent as high as possible, be it through automated features that maximise value (such as linking smartphones to the building entrance, or introducing an ability to track utilisation across the building,to highlight which areas would provide the highest return on investment), or by helping to save money (through improved monitoring of communal utility expenses, for example).
On the flipside, Schwarzman believes that solutions that maximize affordability are set to benefit the most.
The two sides of the coin suggest that the property market is set to be more receptive than ever to PropTech, and companies will have the support to find their niche. As Rhonda Wong, founder and CEO of Ohmyhome, surmises in Hall’s article, “the crisis has served a strong warning to those who have been reluctant to go digital or improve their management processes to allow staff members to work from home.”
At Classic Folios, we are certainly finding this to be the case, as more developers flock to Spaciable, our online portal, as a way to bind the relationship between sales and customer service teams, and homeusers. The portal also feeds into both Nof’s and Schwarzman’s predictions, by maximising the value received by homeowners, while also saving developers time and money, which can help to make their portfolio more affordable. Similarly, we are seeing a greater uptake in our CGI and VR home tours,as developers explore alternatives to physical site visits, suggesting prophetic insight from Schwarzman’s belief that solutions supporting remote working are “going to have a good time right now.”
This pandemic has wreaked havoc on the property industry butone saving grace coming out on the other side may be a somewhat delayed receptiveness to the role technology can play in helping the market move forward with the times.