Real estate has been the largest market pending digitalisation, with many of its processes being done face to face, so it was no surprise that it was heavily hit by the coronavirus. The global pandemic came all of a sudden into our way of life: construction came to a standstill, visiting properties was unthinkable when you couldn’t even leave your own home, etc. Thus, coronavirus has acted as a catalyst for structural changes in the real estate sector. Proof of this, are the new dynamics that have emerged in this market.
The most resistant sectors to the crisis within real estate have been logistics and residential. Logistics, because e-commerce has multiplied exponentially, causing a proliferation of warehouses and facilities of this type, and residential because the demand for housing is more stable; there are always individuals looking to buy, sell or rent homes.
The stability inherent in residential explains the growing interest of investors in this area, as other sectors carry greater risk in the wake of the pandemic, for example offices affected by the new working from home rules. Therefore, we see an increasing interest in buying residential, both from individuals and investors.
With regard to offices, I believe in a post-pandemic future where there is much more flexibility but where places to meet physically and develop teams will not disappear. It is interesting what we are starting to see in Japan: “formal” offices in the city centre and informal offices in the suburbs.
In short, the real estate sector has managed to emerge and even become one of the driving forces behind the recovery of many economies, including Spain. This result has been a direct consequence of the change the sector has been forced to undergo: digitalisation.
Analysing the experience of China, where the effects of Covid-19 began to be felt earlier than in Europe, it is clear that the determining factor for recovery of the sector in this country has been the rapid adaptation of consumers to buying homes online.
Around 151 of China’s top 200 real estate companies have already digitised their processes and conduct transactions online. In addition, companies in the Asian giant continue to expand their online sales channels.
The sector’s need for digitisation is evident in the fact that, although real estate has been hit hard by the crisis (the housing market bottomed in May, when transactions more than halved compared to the previous year), most Proptech companies have ended the year with a positive balance.
Thus, the Proptech sector have provided answers to the needs that have arisen during the past one and a half year: instant purchase offers, virtual visits to homes, digital mortgage procedures, or a more accurate and up-to-date analysis of market prices are some of the services for which more and more clients are turning to these digital companies.
I would even say that, thanks to the digitalisation of our business model, Tiko has come out of the crisis stronger. We have increased our turnover by 200%, we have exponentially increased our team, and we have expanded into new Spanish provinces. In our case, we started from a preferential position as a technology company. An advantage that allowed us to continue with a large part of our activity even in the hardest moments of the lockdown, during which we continued to receive requests and make purchase offers.