Technology is changing the real estate market, from pre-sales to smart buildings
Imagine walking through the suite of a condo and checking out the views from the balcony, long before it’s ever built. That’s becoming a reality, through the use of drones, 360-degree video, interactive 3-D models and virtual reality experiences. And that’s just the tip of the iceberg.
Property technology (proptech) is changing the game in real estate, just as fintech has upended the banking world. Using big data, predictive analytics and machine learning, developers are able to create ‘smart’ buildings. Tenants can control lighting and household amenities from mobile apps, while landlords can use big data to inform decision-making.
Drones are the top real estate disruptor, according to PwC’s Emerging Trends in Real Estate 2019 survey (based on Canadian respondents). Other top tech trends include virtual reality and augmented reality (VR/AR), machine learning, predictive analytics and blockchain. Proptech is even changing the way people purchase property, from new lending services to real estate apps, according to PwC.
One of the biggest challenges faced by developers, however, is showing potential buyers what they’re buying, when it’s still only an architectural drawing.
“People are buying views,” says Mariah Hamilton, sales representative for Stone & South Condominiums in Gananoque, Ont., about 300 kilometres east of Toronto.
Back in the day, “we’d send a photographer up on a crane” to get those views. Or a helicopter would be hired. Now, drones are the status quo. In Toronto, buyers are used to pre-sales.
“In this part of the world … people don’t understand it. They come into my sales centre and say, ‘where is the building?’” Hamilton says.
Drones are being used by developers to show job site progression, but also to show potential buyers the exact view they’ll have from each suite. “In order to get any kind of aerial [photography or video], it’s quick, it’s cost-effective, it’s accurate, so we take advantage of that to a great degree,” Hamilton says.
Taking it a step further, Stone & South has created other tools to showcase the product, including 3-D floor plans and animations, so potential buyers can “walk” through a suite and change the finishes to their liking.
At The One, a new condominium and retail tower in Toronto, drones were used to take 360-degree videos at the height of each floor, from every angle.
“We embedded that in the floor plans,” says Sam Mizrahi, president of Mizrahi Developments, developer of The One.
“So, if you’re looking for a one-bedroom and a den on the 43rd floor and want to see the southwest view, you would see the actual view [from the drone footage].”
The more you can help [buyers] visualize their future home, the better.— Mimi Ng, Vice-president, residential sales and marketing Menkes Developments
Mizrahi Developments built a touchscreen presentation gallery for The One, incorporating its drone footage into custom-designed coffee tables. By swiping on the touchscreen, buyers could see the view from each suite. Those views could also be projected onto the wall, giving buyers the impression they’re looking out the window.
The unit also lights up on a 3-D architectural model of the building. “It’s one thing to see it on paper or on a screen; it’s another to see it on a 3-D model that’s in scale,” Mizrahi says.
When buyers are purchasing off plans, “the more you can help them visualize their future home, the better,” says Mimi Ng, vice-president of residential sales and marketing with Menkes Developments Ltd.
While Menkes is also using drones for aerial shoots, the firm is incorporating virtual reality experiences at its Sugar Wharf Condominiums, a redevelopment of the old LCBO head office and warehouse on the Toronto waterfront.
VR technology has become more powerful, but also more cost-effective, more inclusive and more user friendly, Ng says. That means that, instead of creating short snippets of a VR experience, developers can create a sequence with more content, such as walking into the lobby and going up the elevator into the suite (all while wearing VR goggles). At the same time, that user experience can be projected onto a screen, so a salesperson can explain to the buyer what they’re seeing.
“It all goes back to helping people make a more informed decision,” Ng says, adding that not everybody understands how to visualize space or look at plans. “A typical one-bedroom condo [in downtown Toronto] is around half a million dollars. Being able to engage them deeper into the product is obviously preferable.”
While it’s still early days, other trends PwC points to are artificial intelligence (for automating such mundane tasks as data entry), blockchain (which could help cut costs and reduce fraud in rental payments and land title registries) and autonomous vehicles (which influence how developers create parking lots).
The One, for example, is providing charging stations for electric vehicles. “We started to build for that into the building because we know that’s coming,” Mizrahi says.
The One will also have machine-learning elevators, which means the elevators will learn how the building works and start to anticipate tenant needs.
“It will start to adapt and anticipate intuitively what your patterns are so you don’t have to wait for the elevator,” Mizrahi says.
This is particularly important in a building like The One, which has 85 floors. Through the use of data analytics, a building becomes “smarter” and ultimately more efficient.
Proptech has the potential to radically transform real estate from the sales process to the end product, adding value for both homeowners and developers. As PwC points out in its survey, understanding these shifting needs will be critical for the real estate industry as tenant expectations grow increasingly sophisticated.
This content was produced by The Globe and Mail’s Globe Content Studio, in consultation with an advertiser. The Globe’s editorial department was not involved in its creation.