Introduction
The world is undergoing a fourth industrial revolution as technological advancements are impacting human life and societies. The introduction of technologies like artificial intelligence, blockchain, virtual reality, augmented reality, and robotics has greatly impacted industry behaviour. As the real estate sector is deeply connected with the development and growth of any human society, it is bound to see rapid change. Apps that offer real estate services are growing by the day, and many are taking over the roles of agents and brokers. People had to take investment advice from real estate professionals who charged a high fee for their service in the past. Now, a consumer can find that information on reputable websites like Graana.com, which are backed by strong business intelligence and artificial intelligence frameworks. Continue reading this article by the Iqbal Institute of Policy Studies (IIPS) to understand how the real estate sector will change in the upcoming years and how that change will affect a wide variety of different factors.
Research Questions
- How are different technologies disrupting the real estate sector?
- What are the changing needs of the modern consumer?
- How are migration and urbanisation going to impact the real estate sector?
Technology and Disruption in the Real Estate Sector
According to researchers at Oxford university, jobs like real estate brokers, brokerage clerks, and telemarketers will vanish shortly due to technological advancements (Carl Benedikt Frey, 2013). The study places the chances of that happening at 97%. Technological advancements will radically transform the real estate sector. Shifts in demographics and behavioural approaches of diverse social groups also have to be considered for understanding the possible impacts of such radical change. Many business models that were considered outstanding in the past have now become obsolete. The pandemic has also accelerated this shift as more and more people are starting to rely on virtual means of communication.
A similar disruption can be seen in the taxi industry. With the introduction of ride-sharing apps like Uber and Careem, the world has seen a profound shift in how the ride-sharing new businesses has developed. Similarly, the real estate landscape is also changing. With mechanisms involving verification of land records and titles going digital, detailed property listings being updated online, and data being gathered on key lifestyle performance indicators, the role and business model of the real estate sector is bound to radically change. Lastly, as land development takes place, the environment becomes a very important factor of consideration. Taking into account the sustainable development goals (SDGs) and climate change activism, the real estate industry will also see disruptions by the use of energy-efficient designs, modular construction methods, and biomimicry through design (Forbes, 2020).
Understand the Changing Needs of the Modern Consumer
The world is experiencing a shift from buying and selling to renting and borrowing. The concept is widely known as a “sharing economy.” The term is constantly evolving, but in essence, it is the use of technology to facilitate the exchange of goods or services between two parties. The underlying concept is that assets are underutilised in an economy, and sharing between mutual parties can increase efficiencies by allowing value to pass through to customers and supply chain partners. A profound example is that of Airbnb. The app has drastically changed the renting models in the real estate sector. Those who adopted the trend earned massive profits, and the company now has a market value of 3.7 billion US dollars. Another factor is that of the ageing population and its needs. New ideas for assisted living, accessible facilities, and the creation of a healthy environment are required. Lastly, with the onslaught of social media and raised awareness, consumers are becoming less predictable, and factors like consumer personality, opinions, and lifestyles are becoming determinants of successful products in real estate (Bafna, 2017).
How are Migration and Urbanisation Going to Change the Real Estate Sector
As cities continue to grow, there will always be an increased demand for affordable housing, urban infrastructure, transport infrastructure and telecommunications. In the developing world, countries are already battling the harmful impacts of the pandemic and have very limited funds remaining for infrastructural development. It is feared that this supply gap of funds will not be filled anytime soon, and rural to urban migration may add stress to already densely populated cities. The global infrastructure investment gap amounts to at least 1 trillion US dollars (WEF, 2014). Also, according to the United Nations, 65% of the developing world and 86% of the developed world will be urbanised by 2050. Rapid urbanisation will also have a massive economic, environmental, and health impact on urban residents. Over time, the deterioration of urban amenities with increasing demand for housing and infrastructure will pose multiple challenges for the real estate development sector. This means that in order to ensure the smooth function of urban cities, real estate development will have to adopt the latest technologies and keep up with changing trends of urban sustainability in construction, environment, and lifestyle.
Conclusion
Technology is changing at such a fast pace that growth and sustainability cannot be achieved if it is not kept up with. The real estate sector is often the last among all industries to adopt technological advancements. However, in light of the recent changes in consumer behaviour and rapid rural to urban migration, it can be understood that without the adoption of the latest technologies, the real estate sector will ultimately stagnate in growth and development.
Key Takeaways
- The world is undergoing a fourth industrial revolution, and technological advancements are impacting human lives and societies.
- The introduction of technologies like artificial intelligence, blockchain, virtual reality, augmented reality, and robotics has greatly impacted industry behaviour.
- Apps that offer real estate services are growing by the day, and many are taking over the roles of agents and brokers.
- People had to take investment advice from real estate professionals who charged a high fee for their service in the past. Now, a consumer can find that information on reputable websites like com, which are backed by strong business intelligence and artificial intelligence frameworks.
- According to researchers at Oxford university, jobs like real estate brokers, brokerage clerks, and telemarketers will vanish shortly due to technological advancements.
- The world is experiencing a shift from buying and selling to renting and borrowing. The concept is widely known as a “sharing economy.” The term is constantly evolving, but in essence, it is the use of technology to facilitate the exchange of goods or services between two parties.
- Over time, the deterioration of urban amenities with increasing demand for housing and infrastructure will pose multiple challenges for the real estate development sector.
