Property people make one of two mistakes when it comes to tech: they either take it too seriously or not seriously enough.
Those who take it too seriously proclaim their tech is operating in a multi trillion dollar market that is ripe for disruption and that the time is nigh. Obviously the whole Agency and relationships model is old hat, they say, and it is only a matter of time before their software disintermediates the whole shebang through pure, comprehensive data and algorithmically powered transactions. The irony that they are attempting to become the new middlemen is widely lost.
They are likely to be disappointed, at least in the next five years or so. A real estate transaction is not like booking a room, or hailing a taxi; it is multi dimensional, involves multiple parties with diverse data requirements, and is, for most participants an infrequent activity. As such they often require exactly what humans are good at, namely imagination, creativity, empathy and intuition.
However, computers have different skills to humans and this is why the other type of property person is wrong to not take tech seriously enough.
Tech may not take us humans out of the transaction but it sure is going to disrupt the way we work and how we occupy real estate.
5 reasons why tech is going to disrupt real estate
First off, property is as much about money as anything else and the finance industry IS being disrupted. Everywhere we will see algorithms displacing humans, matching human wants and needs, and removing the layers of rentier intermediaries. Crowdfunding and Peer to Peer lending will explode.
Secondly Big Data, whilst massively overhyped and always susceptible to the old adage that correlation is not causation will have major impacts in retail (through shopper preference analysis), industrial (through the increasing sophistication of warehousing) and offices (through extensive use of sensors to aid management and promote more efficient occupancy).
Thirdly, Pop Up stores may have started as a way to fill empty shops but their ability to spice up a retail location will ensure they become an ongoing feature in and out of town. This simple purpose transaction can and is one to be end to end digitised. Whether a computer or a human is better at deciding which Pop Up store is right for your brand will be an interesting area to watch. With enough data this is algorithmic nirvana. But is enough data available?
Fourthly, co-working centres are certain to increase in popularity, if only because the prevalence of self employment (voluntary or involuntary) means people need someone to go. And they tend to be much more human spaces than most offices. And as work/life becomes increasingly entangled people respond to places that feel more like home. Someone needs to make them more widely available though, as commuting hours a day just to meet like minded souls is an evolutionary half way house.
Fifthly, and this is the real disruption, a combination of ubiquitous high speed broadband, mobile devices, billions of cheap sensors and cloud computing will change the work that we do and in doing so the type of space we require. Anything that can be digitised will be and computers will deal with anything that can be algorithmically processed. Much that we do, for example, with MS Office can/will be automated. Spreadsheets, presentations, report writing; they will mostly be automated or handled via SaaS applications in the Cloud. As businesses become ever more digital they will realise swathes of processes or repeated tasks can be done away with. And then the interesting question really does become ‘what is the point of the office?’.
So, in conclusion, tech really is disrupting real estate; just not in the way most of the ‘disruptors’ are claiming.
The main conference theme of this year at MIPIM is “Digital Revolution Disrupting Real Estate”. Check out the MIPIM 2015 Conference & Events Programme
Image © Shutterstock : Sergey Nivens