The growing middle class and rising disposable incomes have fuelled rising activity in Kenya’s real estate over the last 20 years, with the local sector being more robust than almost anywhere else in the world.
For real estate firms, staying competitive requires strategic and technological innovations to align with emerging trends and enhance efficiency throughout the development process — from acquiring the land to closing the property sale.
Just as the accommodation sharing platform, Airbnb, has redefined hotel booking for millions of users worldwide disrupting long-established players and securing powerful profits, there are ranks of innovation ahead in real estate. Only real estate experts who integrate these developments in good time will enjoy long-term success.
Property buying is a laborious process with unavoidable intermediaries, such as banks, lawyers and government agencies. All of these make the process expensive and slow. What the industry needs is increased efficiency during transactions and Blockchain technology could change the way we track and transfer real estate assets, the valuation process as well as the speed of transactions. Most importantly, it could resolve long-standing problems such as corruption, inaccessibility and lack of liquidity.
Blockchain will achieve this because no one owns the data in the system. Data cannot be altered and anyone who is part of the network can access it. These features make it possible to execute smart contracts, which allow homebuyers to engage with developers directly, without needing go-betweens. Blockchain tech will speed up the process and protect real estate investors from fraud since records are openly and readily accessible and there is no chance they can be tampered with.
Here are other innovations shaping the property market.
When property hunting, visiting a property is not only time-consuming but can be expensive especially if there are multiple properties to be viewed. Virtual Reality eliminates the need for a buyer to physically visit a property as it creates an immersive experience with three-dimensional walk-throughs of properties. Potential buyers can also now take virtual tours from anywhere in the world.
Additionally, where a project is sold off plan, investors are able to get an accurate representation of what they are buying even before construction commences and can also see the impact of any added features they choose.
3D printing can print a house in a record 24 hours. Already in use by construction companies in Russia, the US and China, 3D printing is faster, cheaper and more sustainable than the traditional building process that takes months. This technology is a game-changer especially in areas with a massive housing shortage. It can also use locally recyclable materials to deliver extra savings in labour and material costs.
Story telling in real estate is evolving at speed with one of the newest trends being the use of drones to take aerial images. Used for all types of listings, including residential homes, resorts, vacant land and commercial properties, drone shots offer a unique perspective when showcasing property. Drones can also be used to transport materials, provide surveillance at sites and make detailed aerial analyses of complex terrains during construction.
The technology’s uptake is being hampered, however, by insufficient legal regulations.
In Kenya, the relevant laws are yet to be passed to facilitate the use of the technology.
Smart home features that integrate digital assistants appeal to buyers’ desire for comfort and sophistication and allow the monitoring of every aspect of the home.
The Internet of Things (IoT) means fridges can generate shopping lists. In the event that driverless cars become mainstream, they can be used to fetch the goods from the stores and deliver them to homes. This reality is only a few years away but is already being incorporated into construction planning. IoT is connecting physical objects from household appliances to security systems to each other through the Internet, enabling them to perform smart functions, often with little or no human intervention.
Artificial Intelligence (AI)
AI is already taking over customer support operations and will play an increasing role in building design and management. It can solve mathematical and logical problems better than any human, which will see computers taking over many jobs in the next 20 years — either physically as robots or in the form of software — since machines now have an increasing capacity to learn. Such tools could represent a big opportunity for real estate experts, with developers adopting computer-controlled structural analysis software in combination with design software to design buildings.
Robots are already being deployed in commercial real estate through Robotic Process Automation (RPA), which handles repetitive processes like invoicing, renewals or payments. Significantly, manual labour in construction can also be performed much quicker, more precisely and more safely by robots.
As soon as the world’s increasingly sophisticated biotechnology impacts the production of building materials, the life cycle of buildings will rise significantly. In the not too distant future, there could be materials which repair or even restructure themselves through mitosis, or cybernetic walls which adapt to building’s occupant requirements.
In sum, advances in technology will continue to disrupt real estate. The end result will be a highly-efficient, vibrant and global real estate sector with unlimited options for buyers and builders alike.
Developers that embrace proptech sooner rather than later stand to reap the most value because as unpredictable as the market may be, one thing is undisputable: Proptech is the future of real estate.
Mr Muriithi, is head of sales and marketing — Centum Real Estate.