Explainer: Is proptech the future of real estate?

What are the key proptech trends you’ve seen this year? 

Real estate continues to be the world’s largest asset class, and very often, the single largest investment individuals make. Despite global economic uncertainty, the real estate sector grew by 59 per cent year-on-year in 2021. The maturing proptech sector is not only aiding this growth, but also bringing in a new generation of homeowners. Some of the key trends we see include:

The evolution of proptech offerings: The sector is moving incredibly fast, to deliver a range of services to customers. In the early days of proptech, most businesses focused only on classifieds and then on ibuyers. However, today we have moved from that to find platforms for mortgages; power buyers and in some cases full-service offerings.  

Customers desire a complete experience: In this age of convenience, customers who are serious about their purchase, want to move fast. Instead of wasting enormous amounts of time across every stage of their journey, they prefer having a single platform for everything. They want the full experience starting at the top of the funnel with search, to the bottom of the funnel where they close the transaction and receive financing. 

Customers want technology to enhance their experience: Finding and closing a home can be a time consuming and tedious process. With technology advances, home buyers seek an easy experience from discovery till they get their key in hand. For proptech companies, this is important as they must ensure that their technology is enabling an exceptional journey. 

Real estate purchases are no longer a local transaction:  As an in-demand asset class, proptech is opening up global markets for home buyers. They no longer need to be in-market to make a purchase. In countries like the UAE, we are seeing growing demand from buyers in Russia and China, among other source markets. 

The fully digital experience enables trust with buyers who are seeking to build a global property portfolio. 

For those entering the proptech space, what are the main challenges?

As a sector that’s going through change, newcomers could face a few challenges including:  

Slow pace of the industry: The sector hasn’t seen much change in the way things are done over the past few decades. Because real estate is low frequency and high value, with a lot of complexities, the sector doesn’t move as fast as other consumer-facing tech sectors. 

Lack of enabling technologies: With multiple legacy players and practices in the industry, there is no single solution that binds services together. This includes developers, real estate agents, banks and mortgage brokers. Without banking APIs, digital signatures, integrations with CRMs and more, technology can become a barrier rather than an enabler of opportunities. 

Insufficient focus on lead quality: In their rush to grow, startups will seek to have the most listings on their platform. Instead, there needs to be a focus on high quality leads. A person who wants to buy today is more valuable than those who are only browsing. This is where having complete control of the experience helps, with verified listings, competitive pricing, and a fast transaction process.  

Regulatory and legal challenges: While proptech businesses aim to transform the real estate sector, very often existing rules limit their growth potential. For entrepreneurs starting out, they must have a good grasp on existing regulations across the value chain, and explore ways to remove roadblocks to growth. This includes guidelines on financial transactions, property registration rules, mortgage processing and more. 

How can companies across finance and real estate sectors create synergies to offer greater value?

In most cases, buying a home is still an offline transaction, with each company along the journey having their own sets of processes and rules. All of this creates layers of complexities for home buyers. Companies, whether in finance or real estate, need to look at how they can come together to support property buyers.  

We’ve partnered with leading businesses, whether they are mortgage brokers, real estate agents, agencies, property developers or banks. By equipping these partners with our technology, we were able to quickly qualify customers for mortgages. Our property marketplace focuses on quality, eliminating inefficiencies and putting customers in control of viewing schedules.

By enabling various synergies, we consistently want to ensure that the entire journey of finding and financing your home is as exciting as the moment when you finally hold the key to your home in your hand. Technology will shape the future of home buying, and we want to deliver a world-class experience across every region that we operate in. 

Huspy recently raised $37m in Series A funding. How does the company plan to change the home-buying experience for customers?

Our Series A round, one of the largest in the MENA region, is a stamp of confidence in our business model. As we build the company into a category-defining business, we remain focused on our mission to digitally transform and reimagine the home ownership journey.

With a single platform to find and finance a home, purchasing through Huspy is easier and faster than ever before. We are now focused on growing our teams in the UAE and Spain. 

Our technology is scalable, and together with our talented teams, we can really make a difference to the home buying experience. 

Every one of our properties are verified, with visits scheduled only as per the customer’s availability. We also qualify applicants for mortgages with the best offers suitable to their profile. All of this significantly reduces the time required in the entire purchase journey. 

In fact, we have a conversion rate of over 90 per cent and we close mortgages three times faster than our competitors. And our real estate business is already seeing 30 per cent month-on-month growth. 

Looking ahead, what is the future of property marketplaces in the region?

Across traditional business models, technology has enabled convenience for all stakeholders in the process – whether for business partners or customers. Property marketplaces in the region have previously focused on classifieds alone. Beyond that, the customer is on their own to go through the rest of the process to find mortgages, real estate agents, schedule viewings and more. 

That is why we believe the future of home buying is about providing a complete experience by using technology to connect all stakeholders in the process. At Huspy, we are enabling discovery at the top of the funnel. At the bottom of the funnel, we are helping people close and finance their homes.  

By having a single and trusted place for transactions, home buyers are assured that one of their most important life purchases is also their most delightful. Around the world, most home buying journeys start offline but less than 1 per cent are completed through digital channels. The opportunity ahead is significant and we are only getting started.