Property technology – or proptech – is one of the most substantial economic opportunities in the world today.
Consider it this way: the total value of the world’s property stood at $380 trillion at the end of 2022, according to Savills. That is huge.
That means the proptech sector – encompassing many sub-sectors, such as payments, construction tech (or ‘contech’), climate tech, property management tech – is servicing and potentially adding value on a vast scale.
A quick introduction to proptech in residential property payments
But, when we talk about how proptech is changing the game in the world of property payments, what are we really talking about? Simply, it is the technology designed to improve and enhance the processes involved in property transactions – buying, selling and managing real assets – that can bring tangible benefits to the principal parties in the transaction as well as the wider value chain that facilitates it.
Proptech – including a more comprehensive collection, curation and analysis of the vast quantities of data available in the real estate industry – is already a part of what you (and your customers) use every day when it comes to navigating the residential property experience.
So, where are the opportunities in proptech in 2024 and beyond?
We see them in the dots that join up that $380 trillion industry. The things that enable the property industry to better understand its impact, and deliver a better experience across the supply chain.
Payments is a big part of that and, in our view, is a seriously overlooked vertical.
Driving change in payments for property management
Payments-focused proptech, particularly where there’s an international element to the interactions that it’s facilitating, can take a lot of the stress out of property management.
There are tools available which can automate incoming and outgoing transactions in real time, integrating with your bank and ensuring secure payments that guarantee peace of mind, whether you’re a buyer, seller, landlord or tenant.
That’s as true of whether you’re handling an individual property or a block of apartments – and, indeed, there are even more efficiencies and benefits to be found when improving your processes on the latter.
Some new proptech payments providers offer rewards as part of their platforms, boosting tenant engagement and influencing long-term behaviour, better ensuring landlords receive their income on time and that residents remain happy in their homes for longer.
The end-to-end impact of AI
AI has already revolutionised the consumer’s experience of buying a property, and it’s not stopping there. We are already benefitting from nascent AI embedded into software to streamline workflows; improve both the efficiency and, crucially, the security of operations within real estate; and to automate the set-up of new tenancies.
This is only set to evolve and improve this year, with a focus on clearer communications and more transparency across agents, surveyors, conveyancers and brokers – speeding up the process of property sales for all parties.
International payments: the overlooked proptech opportunity
Meanwhile, if the property is overseas, proptech can turn a tricky investment into a viable opportunity through the benefits it brings to FX. As well as enabling a seamless, safer and more secure payments system, it can also provide a much quicker experience that removes uncertainty and provides partners in the supply chain with a clear thread of activity.
Processing payments has been simplified by peer-to-peer (P2P) fintech platforms, providing security while eliminating the need for intermediaries.
And that’s exciting. The total addressable market for the residential property market is huge, with flows of $4.5 trillion a year, of which $182 billion are in FX alone (excluding China).
The adoption of proptech very much underpins Redpin’s philosophy of making international property transactions smooth and simple for customers, no matter where they are located. Through our international network, our customers have access to more than 15,000 partners on a global scale. These partnerships ensure our customers get the right support across the often-complex, end-to-end process of buying a property abroad.
One doesn’t need to embrace technology to invest in property. But, if you embed tech in your operations – whether you’re an investor, an estate agent, a lawyer or anyone involved in the supply chain – you will find that you do much better business.
Please note that this blog doesn’t contain legal or investment advice. It’s very important that you always get independent legal and tax advice before entering any property transaction.
