Proptech in Review: Investors predict slower growth in 2023
What is proptech?
Proptech, or property technology, is a term used to describe technology-enabled innovation in the real estate sector. Proptech startups are using technology to disrupt and improve every stage of the property lifecycle, from discovery and search, to financing, construction, and management.
Why is proptech important?
The real estate sector is one of the world’s largest and most important industries, yet it has been largely untouched by the digital revolution. This is starting to change, as the industry wakes up to the potential of proptech to make the process of buying, selling, and managing property more efficient, transparent, and user-friendly.
What is the future of proptech?
The proptech sector has enjoyed rapid growth in recent years, with startups attracting billions of dollars in investment. However, this growth is expected to slow down in the next few years, as investors become more cautious and selective. Nevertheless, the proptech sector is still expected to be one of the most exciting and disruptive industries in the years to come.
- Faster growth in emerging markets
- Greater focus on sustainability
- More consolidation and exits
- Increased regulation
Proptech in Review:
Investers are predicting a slight decrease in Proptech investment growth over the next few years. In a recent survey, 61 percent of Investers said they believe Proptech growth will decrease in 2023 compared to 2020. Only 8 percent said they believe it will increase.
While the decrease in growth is predicted to be modest, it is still a shift from the current trend. In the past few years, Proptech has seen significant investment growth. In 2020, it is estimated that $16.6 billion was invested in Proptech globally.
There are a few factors that Investers believe will contribute to the predicted decrease in growth. Firstly, the COVID-19 pandemic has had a negative effect on the real estate market. Secondly, there is a belief that the market is becoming saturated. And finally, Investers are anticipating increased regulation of the Proptech industry.
COVID-19
The outbreak of COVID-19 has had a significant impact on the real estate industry, and this is expected to continue in the short-term. The pandemic has led to increased uncertainty and a decrease in demand for both residential and commercial properties.
In the long-term, the pandemic is also likely to have a impact on the way we use and occupy space. There is a growing belief that there will be a shift away from traditional office settings and an increase in the use of coworking spaces and remote working.
Saturation
There is a belief that the Proptech industry is becoming increasingly saturated. This is due to the large number of startups that have been created in recent years. As the market becomes more crowded, it becomes more difficult for new businesses to stand out and attract investment.
Regulation
Investers are also anticipating increased regulation of the Proptech industry. This is in part due to the concerns that have been raised about the way in which some Proptech companies have collected and used data.
As the industry continues to grow, it is likely that we will see more regulation around data privacy and the use of artificial intelligence. This could have a negative impact on the growth of Proptech in the future.
Conclusion
Investers are predicting a slight decrease in Proptech investment growth over the next few years. While the decrease in growth is predicted to be modest, it is still a shift from the current trend. The COVID-19 pandemic, saturation of the market, and increased regulation are all contributing factors to the predicted decrease.