HUNGARIAN PROPTECH MARKET CIRCULAR
The crisis situation caused by rising energy prices worldwide may give another boost to the proptech sector. However, in addition to cost reduction, technological solutions increase efficiency, contribute to sustainability, and even hide alternative income opportunities - said ProptechZoOm.com, which conducted a comprehensive analysis of the present and future of the digital real estate sector by interviewing players in the proptech sector.
"2022 could be the breakthrough in real estate market digitalization. We made an analysis of the situation of the proptech sector by interviewing industry players. This revealed that there are serious untapped opportunities in this area in Hungary, as this digital real estate market revolution is much more advanced in the surrounding countries," said Zoltán Kalmár, founder of ProptechZoOm.com.
The market has picked up, but there is room for improvement
According to the analysis of ProptechZoOm.com, the spread of proptech solutions in Hungary has really gained momentum in the five years since 2017, but there are still only nearly 50 companies present in this field. And the coronavirus turned the digital real estate market upside down, focusing on measurability, transparency, and shared services:
- For example, contactless access control systems and shared services have gained ground. As a result of the pandemic and the related measures, our commuting habits have changed, and thus the use of offices or parking lots. During the epidemic, it becomes clear that the use of real estate can be made more efficient with digital solutions, and performance can also be measured with them.
- The epidemic had a serious impact on the commercial real estate market. Business premises had to close, which have not been able to open since then, but at the same time, the logistics real estate market expanded explosively, as the value of online purchases increased. As a direct consequence of this, the value of the delivery time has increased, which means that it is necessary to build a more efficient logistics network at the companies concerned.
- The spread of home office or hybrid working has also affected the residential real estate market: the demand for larger apartments and houses located in agglomerations has increased. With the rise of newly built properties, intelligent solutions have come to the fore in addition to sustainability, and the demand for smart homes, whose maintenance costs are lower compared to traditional apartments, is increasing.
Zoltán Kalmár, presenting the comprehensive industry analysis, said that although digital solutions have clear and visible advantages in many cases, companies do not necessarily rely on them yet. "Real estate companies are less willing to pay for innovative proptech solutions and not all players are open to innovation. These two factors had the weakest results in the research," added the expert.
AI will play a bigger role in the future
The expanding proptech sector will increasingly rely on artificial intelligence (AI). Among other things, by putting digitization in order, the processing of a lot of data collected by sensors installed in buildings and offices can be entrusted to artificial intelligence, which even provides an opportunity to reduce maintenance expenses. Furthermore, machine learning can have many applications. Artificial intelligence can help, for example, with forecasts, that is, it can draw attention to the need for various maintenance or possible malfunctions. It is no coincidence that the digitalization guidelines related to building operation and maintenance are included in the government's strategy for the development of artificial intelligence for the period between 2020 and 2030.
According to the analysis, domestic solutions are based on a variety of technologies, but in recent years the advancement of Building Information Modeling (BIM), shared solutions and the boom of the IoT market have become spectacular. If the respective technological markets reach a higher level of maturity, there are enormous opportunities for more efficient use of data and artificial intelligence.
The expert also pointed out that, according to the analysis, the services of Hungarian proptech companies are needed in roughly the same proportion by real estate consultants, developers, end users - who can be office tenants or apartment owners, among others - and companies that operate real estate. To a lesser extent than the previous ones, real estate funds also feel the need for proptech solutions.
Of course, proptech developments and growth also require resources. According to the survey, at the same time, 41 percent of the companies involved do not currently need investment, they see it as necessary at a later date. 24 percent of them plan to raise funds in the medium term, 29 percent are considering the same in the short term, and 6 percent do not want to raise external capital at all.
According to the head of ProptechZoOm.com, the development of the domestic propech industry, which is still weak at the international level, is crucial so that as many users and real estate companies as possible get to know the new technological solutions and start using these developments. That is why ProptechZoom.com will put a lot of emphasis on education and the widespread dissemination of new technologies in the future.
The complete Hungarian Proptech market analysis will soon be available for registered users to download from proptechzoom.com, if you are interested, subscribe to our newsletter and we will send it to you soon.