What is proptech?
The term proptech comes from applying technological advances to real estate, i.e. it is the combination of prop (property) and tech (technology). It refers to companies in the real estate sector that use technology to improve their services, and any company from construction companies to asset managers.
This innovation emerges mainly as a result of the development of technologies such as blockchain or artificial intelligence, which has transformed the foundations of their operation. In addition, the high level of competition among companies and the emergence of platforms such as Airbnb, Foto Casa or Idealista accentuate the need to differentiate themselves.
Proptech companies are consolidating in Spain
The year 2000 saw the emergence of the first real estate company to implement technology in its services. Since then, Spain has become a world leader in the sector and in this type of real estate start-ups. Currently, there are some 550 proptech companies, according to the latest edition of the Proptech Map, carried out by the Real Estate Agents of Catalonia.
As indicated by the Proptech Global Trends 2022 barometer, Spain ranked ninth in the ranking of investors during the period 2021-2022, with a total of 47 investors in public transactions. And the forecasts for 2023 are positive, as they place the country in fifth place with the highest number of investments, which translates into a total of 903.5 million euros.
Growing proptech platforms in Spain
Spain’s Proptech Map is mainly driven by startups. This is not a new factor, as these types of companies are characterised by breaking into little-explored sectors with information technologies (ICT).
Spanish start-ups in this field are divided into different categories according to their area of work and specialisation. This categorisation has served to redefine the sector, distinguishing the presence of rental and sales service providers, companies that use real estate management software, and B2B or B2C portals for contracting services related to the sector, among others.
Main proptech technologies
The development of technology, digitalisation and connectivity are the main bases on which these startups have been created, as an example of innovation.
In this case we are talking about Big Data in real estate, which is used, among other things, to carry out agile management of geolocation data, as well as appraisal data and prediction of market trends. There are platforms such as Housfy, dedicated to the business of buying and selling homes in Spain, which use this tool to analyse the characteristics of the area in which a property is located. With it, it is possible to value a wide area around the property to assess a fair price or to quantify the days it takes to sell.
In addition, this technology is capable of storing land registry data, weighting the transactions of the last decades, and analysing the information published about other flats in the area.
Virtual Reality and 360 videos to enhance the experience
The ease of taking a virtual tour of the property boosts the commercial section. Thanks to the compilation of videos, images, 360º high quality photographs, and the use of Virtual Reality, VR, it allows potential buyers and tenants to get a first idea of the state, light, size, and other characteristics of a property. But it not only improves the user experience, it also helps sellers in their work, who can support them with comprehensive descriptions and concise data about the area.
For example, applications such as Spotahome, dedicated to the rental of long-term housing, have created a home-checker appraisal system to verify that the quality of the images published corresponds to the state of the house.
Blockchain for investing
Blockchain has also arrived in the real estate sector to innovate a traditional sector and link it with the investment sphere. There are already companies that use this technology for the security, transparency and simplicity it provides in all kinds of processes, such as smartcontracts.
It is also used to promote participative financing, as anyone interested in investing part of their savings in the real estate sector can obtain a return.
In this sense, companies such as Inveslar promote a business methodology that is very similar to the crowdlending financing model, however, they channel the money through the web platform, tokenising the investment of a home, and making each operation globalised and flexible.
Software for crowdfunding
Raising crowdfunding through a website. This is what can be done with the development of specific software.
However, investing in a crowdfunding project can involve risks and partial or total losses of the capital deposited. However, to minimise these risks, companies such as StockCrowd IN have developed a filter, designed to protect the investor, and only viable and solvent projects are part of the platform.