The real estate market is inflexible and lacks transparency, but with the use of technology and analytics it can be simplified, data can become more widely available, and overall efficiency can improve.
Technology, finance and real estate are evolving into one of the strongest triptychs of the world economy. This specific triptych involves the terms FinTech and PropTech, which refer to the technologies that are developed for the finance and real estate sector respectively.
It has become increasingly apparent that these two sectors are intrinsically linked and anything that happens in one sector has a direct effect on the other. When demand for properties and prices rise, banks benefit since the collateralized mortgages in their portfolio automatically have the value of their security increase. Also, when banks show a greater appetite to lend to property buyers, then it benefits the real estate market as demand rises. The same, of course, applies to negative developments.
The technologies developed for these two sectors, FinTech and PropTech, complement and interact with each other. Abroad, where these technologies are more advanced, we often see a blur around certain services or tools as to whether they fall within the definition of FinTech or PropTech. Analysts refer to FinTech as PropTech’s Big Brother and there is good reason for it: with FinTech being at a far more advanced stage, people involved with PropTech have the opportunity to learn from the mistakes made in developing the technology for the finance sector. What is more, had it not been for the proven financial viability and success of similar ideas in FinTech, several pioneering and on many occasions crazy ideas that emerge from the PropTech sector might not have been received with the same appreciation.
Picture, then, that we could have, in Cyprus, an estimate for the value of a property with the push of a button. Or, that we could pull all the information relating to a property from an application. Going even further and combining PropTech and FinTech, what would you say if we could submit from our laptop a full mortgage application?
Does it sound like science fiction, or something that can only happen in the distant future? Consider, though, how the consequences of the pandemic forced us to suddenly adopt technologies and solutions that weren’t even in contention a few months ago. The real estate sector saw a similar adjustment. Prospective buyers were looking at properties they were interested in through live tour videos rather than paying a visit to the premises. Instead of dropping by the offices of the developer or the estate agent, they used Zoom and other similar solutions to communicate. Of course, to be clear, remote property viewings only scratch the surface of what PropTech can offer.
At WiRE FS, we have started creating a new innovative tool for the Cyprus real estate market that will bring greater transparency and simplify the existing complicated and slow processes. We are particularly happy that our project has been embraced and is being supported (financially) by HD 360, a subsidiary of the insurance company Hellas Direct. The implementation of the plan and then having the audience accept it, which presents the toughest challenge, is a whole different story. I’m sharing this because I want to point out that these developments in the PropTech sector are also happening in Cyprus and will contribute in the transformation of the real estate sector in our country.