The Impact Of PropTech On Everyday Business

Property tech, or proptech is the corner of emerging technology devoted towards the business of buying and selling property. TechCrunch statistics reveal the incredible year that proptech had leading into April 2021, with over $24 billion in venture capital provided for the emerging tech industry. The impact proptech and its related startups is having on the national property industry is subtle but significant, and is at the first step being felt in the notoriously lengthy process of property financing.

Changing borrower fortunes

One of the biggest beneficiaries of proptech investment is the lenders market. In a review of the big winners in the proptech investment surge, media outlet Inc highlighted Better, who have raised $160 million for their direct lending platform. The benefits of this for consumers are quite clear. In order to win business, online lenders typically do away with commissions and fees, leaving interest as the only excess customers are left to pay. Digital lenders have streamlined their processes to make the application objective and fast. Furthermore, many digital lenders provide smart tools to help borrowers manage their mortgages in a better fashion, and are aware of where they can benefit from a renegotiation or change in funding – another big area for proptech.

Insurance and management

Many American homeowners pay too much for their mortgage, as well as for their insurance. A tailored approach has long been necessary, and Inc highlights the growth of Lemonade in that sector. As a tailored insurance provider, they have pioneered new, smart-led tools to help consumers constantly assess and change, if necessary, how they are covering their property and how they are paying their home loans. This would seem to be to the detriment of providers, yet the reduced overheads associated with digital business are effective in improving profit lines. This results in a better quality of service, which is quickly becoming a better driver for business, rather than relying on old stagnated products and customer ignorance.

The luxury market

Perhaps the biggest story of the proptech story is Compass. Recently subject to a huge IPO that valued it at nearly $6 billion, the business focus on the end-to-end property experience – real estate, management, sale, and so on – proved to be a winning formula. This is especially lucrative considering the area of business, which is high-margin, luxury apartments. It’s not unreasonable to expect to see a lot of proptech growth in this sector. The average house price is moving up in the USA, yet, with a bubble break ahead, it may move luxury properties back down into the affordable range for medium-level buyers. If that’s the case, Compass and their ilk will have an even bigger market to field – one that will ultimately keep driving the wider proptech industry forward.

Expect investment to rise as the real estate market does. Bubble or not, there will continue to be a need for shelter and innovation that improves that process. Money helping that along will always find value in the field of tech.