Both the real estate and technology industries need to brace themselves for substantial opportunities and challenges as real estate technology implementation evolves over the next decade. The findings of a recent report from research firm Future Market Insights (FMI) predict remarkable growth in the PropTech market at a project compound annual growth rate (CAGR) of 9.3% between 2023 and 2033. That’s slightly higher than the 7.2% growth rate in the market recorded between 2018 and 2022.
This substantial surge in demand highlights the increasing popularity and importance of PropTech, leading to a significant rise in its market value from $19,608.1 million in 2023 to an estimated $47,842.5 million in the next 10 years, according to the report.
Bridging the Communication Gap: Technology-Based Solutions
“New technology-based solutions are effectively bridging the communication gap between startups and real estate firms, resulting in significant growth within the PropTech market,” the report’s authors stated. Key trends such as AI, data automation, sustainable technology, and IoT adoption are driving this expansion, offering cost savings, improved customer experiences, and increased revenues for businesses operating in the sector.
Key Trends Driving Growth
“The growing acceptance of cutting-edge technology in real estate solutions is driving the rapid growth of the PropTech market. This is particularly prevalent for asset and facility management in residential and commercial buildings,” the authors of the report note. PropTech helps the real estate industry by facilitating communication and doing away with the need for in-person meetings. It also provides agents and investors with data-driven property research, increasing efficiency and accuracy.
Overcoming Supply Chain Disruptions
Global supply chain disruptions resulting from firm and plant closures have hindered production and sales in the real estate industry. However, there is a positive effect from industry participants fueling the market expansion. Despite this growth, there are still obstacles to overcome, such as high implementation costs as well as low research and development spending.
Nevertheless, developers are adopting effective project management and communication technologies. Furthermore, technological advancements like AI and VR are revolutionizing the real estate sector and creating new potential for the expansion of the PropTech market.
Both seasoned businesses with a history in real estate and recent entrants with a focus on cutting-edge technologies are important players in the PropTech market. These businesses provide various services, including virtual property tours, Internet marketplaces, smart home technology, property management systems, and data analytics tools.
“The race to create the most user-friendly, effective, and economical solutions that address the unique needs of real estate developers, agents, landlords, and buyers characterizes the competitive environment,” the report concludes. While larger corporations use their resources to increase their market presence and acquire potential startups, smaller businesses frequently concentrate on specific areas and deliver disruptive advances to the sector.