While we are approaching the end of 2016, one typically starts to look back and summarize the year which will soon be behind us. However, less than looking back and our own dealings, I’ll try to make a few predictions for the future 2017 – and beyond.
Blockchain will not mature completely next year, and be implemented throughout everything everywhere, but I think the critical mass is already here. The property industry by its very nature is ripe for Blockchain technology. The easiest entry point is transactions of contractual nature, such as mortgages for real estate. Also leasing as a process is very transactional with a lot of structural data. How fast the development will be, well, only time will tell, but most likely we will see some workable concrete applications during next year (indeed e.g. ABN Amro has published its venture to test Blockchain in real estate transactions).
#not AI, but automatization of processes
Even though Artificial Intelligence is both very real and also much buzzed about, I think within real estate it is still more question of streamlining some of the basic processes, which are very very manual for the time being. I have witnessed lately a couple real cases where the level of manual work is simply incomprehensible and the reluctance to streamline it is something I just don’t get. The power of existing convention is mighty.
Nevertheless, on the other hand, one of the largest Nordic retail banks is planning to automate the whole mortgage applying and supplying process, including the valuations, which the collaterals are based on. Well, if you can automate the valuations of a residential flat, what does it take to repeat this in commercial as well?
So, yes, AI is coming but first in the form of intellectual algorithms as part of digitalized processes.
Even though nothing new, mobility is still something, the absence of which I am genuinely wondering within real estate industry. One good example was a Dutch asset manager I met a brief while ago who showed on his mobile phone how he had created properties by himself on the Google map, and found that very useful. When I asked why does not his employer acquire an app which connects all the data into their legacy system and mobilises the data entirely, the answer was “Well yeah, you know…”. I think this “Well, you know” approach captures and summarizes it perfectly. Not the individual Asset manager’s fault though, but I think big corporations’ IT departments still have a long way to go.
#APIs and connected “reconomy”
Let’s firstly define a new term – reconomy standing for real estate economy. What I personally firmly believe in, is that the only way out from the shadow Excel spreadsheets and scattered data all over is through structural data exchange between applications. And there you have the power of APIs.
This has happened in other industries and horizontals already, one example being zapier.com consisting of over 750 connected applications already (!). Another option is salesforce.com type of dominant platform breeding an ecosystem around itself. There are few players of scale and resources who might succeed in pulling this off – combined VTS and Hightower maybe the best applicant for the job.
Anyways, I see no major obstacles within real estate for either other than prevailing business convention, which – of course – is hard to change.
So, all in all, this development is more of evolution than revolution, but of course, those, who even deny the evolutionary nature of things, will evidently fade away. With this a bit dramatic prophecy for the future I wish you a very good Christmas and Happy New Year!