Levent Künzi is Co-Founder and CEO of Properti - a tech-driven real estate company dedicated to modernizing residental real estate in europe
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The coronavirus pandemic has demonstrated that even large transactions like buying a house or renting a flat can now be completed online. My industry, proptech, has been delighted to see progress in the digitalization of real estate, while at the same time competition in the sector has increased. In Switzerland, most real estate transactions are still handled in real life. People see property as a safe long-term investment and want to get a close look at their potential property before selling it. However, new technologies and their frequent use during the first half of 2020 have shown the real estate sector more ways to conduct business. Human contact is still crucial for buying, selling or renting property, but proptech has been paving the new ways to conduct business.
Virtual Real Estate Transactions With A Human Touch
Where buyers used to physically visit a potential property, they are now more prepared to join virtual reality tours with realtors on the ground. Digital viewings, 360-degree videos, robots and conference technology such as Zoom or Google Hangouts help buyers decide on whether to invest in a property without visiting it first. High-quality photos, drone material and online portfolios offer additional support in filtering the most interesting properties at the click of a mouse.
But it is not just property viewings that are taking the plunge into virtualization. Real estate finance, insurance and contract signing are other services in the ecosystem of housing that are rapidly changing. Even applications for rental property and the communication between renters and landlords are moving online. In Switzerland, big insurance companies and banks are competing with proptechs and more traditional realtors for the role of market leader in this race toward the digitalization of services around property.
A real estate agent sells dreams and brings the people a step further in their life. So selling a property has a lot to do with emotions. These emotions can’t be kindled by machines; feelings have to be expressed by the interaction between the agent and the buyer. The whole process can include the technologies which make everything in the background more efficient and the personal touch of a real estate agent. The agent works with technology and the technology works with the agent. It’s a win-win.
Taking Real Estate Financing Online
Recently, one of Switzerland’s largest banks, UBS, launched a new online platform that allows customers to search, compare and contract mortgages almost completely online. Key4 is not the only service in Switzerland that is taking mortgages online, but so far, it is the only platform that allows for comparison of different providers. The next step will be to integrate property platforms with the financing so that countless automated services can be found at the same provider. Other real estate and finance companies in Switzerland are also looking into the combination of real estate platforms and financing platforms.
The idea behind this new trend is to make the marketing process faster and more transparent for sellers as well as for buyers. AI solutions from the fintech and proptech sectors can provide thorough, transparent, data-based advisory services for lower costs. The trend in Switzerland, Austria and Germany is clear: Technology is pushing the transaction volume of online mortgages up. German banks have reported that the proportion of mortgages completed online as 45%, whereas in Switzerland and Austria, the boom in online mortgages is about to start.
Integrating Proptech And Fintech
The combination of proptech and fintech is great news for customers, especially for digital natives, who are used to conducting all their business online. AI can save both customers and providers a lot of time by automatically suggesting appropriate properties, financing models and additional services such as moving or cleaning companies. Investors can make their decisions based on a mostly or fully virtual viewing of the house and an automated process to determine the value of property. Large databases provide the foundation for both the proptech and fintech sectors to offer these services to customers.
Robots cannot sell houses, and the support of a good realtor will always add the particularly valuable human element in a successful transaction. Technologies in property and finance can speed up processes, help with selection and help make businesses pandemic-proof. However, while AI and other modern technologies help in the decision-making process, customers can still benefit from direct contact with a realtor or consultant. I believe we are not ready to go 100% digital just yet. Realtors are still a connecting link between proptech and fintech, combining the best of both worlds and adding the personal touch to property transactions.
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