Real estate market
The digital real estate market: online anytime, anywhere
We’re increasingly communicating and organizing our lives through digital channels. The same applies to the real estate market.
17 Jan 2017
Whether we need to pay bills, book a hotel room or reserve a table at a restaurant, with just a few clicks we can buy products and services and take care of day-to-day tasks. Obtaining information from online portals, and comparing and evaluating services has become part of our everyday routine. According to the Federal Statistical Office (FSO), around 90 percent of people in Switzerland aged 14 and over use the Internet on a regular basis – and 99 percent of young people have a smartphone. Growing evidence suggests that the digital transformation will continue to shape and change virtually every area of life and the economy.
Welcome to the digital era
The estimated number of private real estate transfers, in other words acquisitions of single-family homes and condominiums, stands at 40,000 to 50,000 per year. Until a few years ago, these properties were usually advertised in regional and local newspapers. Wüest Partner, a consulting firm that specializes in real estate, estimates that around 90 percent of all real estate offers can now be found on digital platforms. “Only around ten percent of the properties we register appear solely in printed media,” says Robert Weinert, an economist at Wüest Partner. The Internet’s resounding success is also reflected in the fact that according to the latest surveys, 92 percent of people look for property on real estate portals – and this figure even increases to 95 percent when it comes to rental apartments. This is not surprising, as the largest portals can feature anywhere between 60,000 and 70,000 offers.
Visiting new properties before work starts
Digitization offers multiple benefits: Compared to traditional advertisements, the cost of activating offers on digital platforms is much lower. Online portals also often include additional information, such as detailed plans, photos and descriptions, or maps of the surrounding area. Digitization is particularly beneficial when looking into new properties off the drawing board. As a potential buyer, you can be drawn into an artificial world with the help of virtual reality glasses. This technology lets you take a virtual tour of buildings that are either too far away to visit in person, or that have not even been built yet. The architecture, lighting conditions and spatial dimensions are perceptible as if you were in the actual building. And in turn, as more and more people seek to buy or rent property on online platforms, saving their profiles as they do so, data volumes are soaring. All this information and the related search profiles provide investors and project developers with an increasing number of reliable indicators for trends in demand and preferences. Location decisions, the planning and design of new projects, combinations of different-sized apartments, etc. can then be adjusted to meet the actual needs and desires of potential buyers. And that’s not all: During the planning process, future property owners will be able to have a much greater say than in the past. The buildings of tomorrow will also be “smart”: Individual structural elements and devices will be networked (Internet of Things), offering completely new perspectives when it comes to surveillance or repairs and maintenance, for example.
Transparent real estate market
Digitization has also brought about changes in the transparency of the real estate market. Just 20 years ago, many transactions took place more or less behind closed doors, or through agencies or real estate brokers that were mostly locally based. They established contact between buyers and sellers, and executed the transactions.
The shift to public, digital platforms makes the market fundamentally more transparent. Anyone can form their own impression of the properties on the market and their price, thanks to the representative offer of properties for sale. As good offers quickly vanish from the market, many platforms offer search subscriptions – potential buyers are notified as soon as new offers matching their search criteria become available. Many platforms also include price information for specific regions – sometimes it is even possible to retrace the price progression of specific offers. In addition, there are inexpensive or even free tools available to appraise the value of a property. As this evolution is continuing at a tremendous pace, there is just no way of knowing what the digital real estate market will look like in the future.