The Hungarian proptech segment is seriously lagging behind. Globally, on the other hand, there was a record-breaking investment of more than $ 32 billion in real estate technologies last year
Smart office, e-contract, virtual home search, energy-efficient homes – some of the terms we are starting to make friends with, but we rarely meet them in practice for the time being. The meeting of the real estate sector and technology is creating increasingly exciting solutions that attracted a record $ 32 billion in investment last year globally. In addition, proptech developments have been given a huge boost by the “home revolution” in the wake of the coronavirus epidemic, which has also sparked interest in the office market for efficiency-enhancing and cost-cutting innovations. What will move the proptech market in the future and where will the developments go in Hungary? In a recent broadcast of Protechtor’s technology and business video series, Tibor Massányi, Managing Partner of DVM design Kft. And Zoltán Kalmár, Founder of ProptechZoom.com, shared their thoughts on the present and future of the proptech sector.
The term proptech (Property + Technology) first came to the fore almost 10 years ago, but it wasn’t until 2018 that technological innovation really exploded into the real estate market, and it has been lagging behind since the digital revolution. Improvements are primarily driven by efficiency gains (65%), cost optimization (47%) and better decision-making mechanisms (44%), according to experts, and companies using proptech innovations are not disappointed with the newly adapted solutions. “Innovations are making their way in almost every sector of the real estate profession, from financing to design and construction to sales and longer-term operations. However, it is a complex system with many players, which is often driven by very different interests, which is why we find that technological innovations are spreading more slowly,” said Zoltán Kalmár, the founder of ProptechZoom.com, in the latest broadcast of Protechtor.
Like many other areas, the coronavirus epidemic has fundamentally changed the proptech market while affecting its various segments in a completely different way. The logistics market, for example, is gaining momentum, as e-commerce has gained momentum during the closures, leading to a significant increase in demand for efficiency-enhancing solutions. Meanwhile, retail has suffered from changing consumer habits and the hotel market has also transformed and is still only looking for a place in the post-COVID world. Expectations of residential real estate have changed fundamentally due to the long-lasting and most likely home office phenomenon that will remain with us: comfort, security and low energy consumption, among other things, have become important. Tenants of classic, large-scale office buildings have also faced great challenges, both in effectively maintaining vacant premises due to quarantine and in fully serving the needs of returning workers.
“There is still a lot of uncertainty in the real estate sector and technological developments can gain tremendous importance here. When, which point and temperature of the apartment should you heat with the greatest possible efficiency? How can you ensure comfortable but cost-optimized working conditions when only a few colleagues work in the office at a time? This is where the data comes into play, as well as the algorithms and artificial intelligence that work with it, which provide real-time answers to questions that are important to us and, where appropriate, can serve as a basis for serious business decisions,” said Zoltán Kalmár.
According to experts who spoke in the latest episode of Protechtor, the Hungarian proptech market is still not performing well in a regional comparison: while the number of companies developing in the sector is around 200 in Romania and Bulgaria, there are only nearly 70 registered companies in Hungary. The peculiarities of the construction and real estate sectors also hinder the digital revolution that is permeating all this: smaller companies are usually only able to get involved in a one-on-one project as subcontractors, so there are usually not enough resources left for technological developments. In addition, investments are difficult to find in domestic proptech startups, who often focus on the Asian or Far Eastern markets from the outset, so there are few success stories and memorable exits – all of which discourage entrepreneurial innovators. “We can see that the Hungarian proptech segment can pull the Hungarian proptech segment out of this situation. If the pressure comes from them, and the financiers and contractors see that there is a demand for it and the return is good, the technological developments will start. In more than one case, we have found tenants of an office building fighting the installation of the intelligent parking system that the operator was carried out,” added Tibor Massányi, managing partner of DVM design Kft.
Plenty of development is trying to enter the proptech market, while quite a few technologies are already being used more and more often. As a result of the epidemic, non-contact solutions are gaining ground, and more and more buildings are generating various sensors that can produce longer-term forecasts and models in addition to data collection (temperature, light conditions) and related software and MI solutions, and there is growing interest in for technology platforms that handle not just one function, but all the services available in larger buildings and office buildings at the same time, be it a parking garage or a dining room and a conference room. Of course, the metaversion is also in the world of proptech, and VR meeting rooms are for rent: just imagine picking up virtual reality goggles while working in your own home and chatting right away with your colleagues, and even feeling like you’re wearing a keyboard.
“In addition to tenant needs, two other key considerations will drive proptech developments in the next decade: efficiency and environmental awareness. The aim will be to operate at the lowest possible cost, sustainable in terms of energy consumption and human resources, be it residential buildings, office buildings or warehouses. In addition, the protection of our environment and the corresponding conscious solutions will come to the fore, and technology will be an excellent tool for this,” said Tibor Massányi.
