“2022 could be the breakthrough year in the digitalisation of the real estate market. We conducted an analysis of the situation in the proptech sector by interviewing industry players. It turned out that there are serious untapped opportunities in this field in Hungary as this digital real estate market revolution is much ahead in the surrounding countries,” said Zoltán Kalmár, Founder of ProptechZoOm.com.

The market has spun up, but there are lots of opportunities to boom

According to the analysis of ProptechZoOm.com, proptech solutions spread mostly in the last five years in Hungary, but there are only 50 companies operating in this market. COVID-19 has revolutionized the digital real estate market in a way, directing more focus on measurability, transparency and shared services:

• For example, contactless access systems and shared services have gained ground. As a result of the pandemic and the measures that can be linked to it, our commuting habits have changed, so have the use of offices or car parks.
• The pandemic had a severe impact on the commercial real estate market. Retail premises, which have not been able to open since then, had to close, but at the same time, online shopping and therefore logistics expanded exponentially. The direct consequence of this is that the delivery time has been overvalued, thus it is necessary to build the most efficient logistics network
• The spread of WFH and hybrid work has not only affected the commercial but the residential real estate market as well. There has been an increase in demand for larger apartments and houses in the agglomeration. With the rise of newly built properties, there is a growing demand for smart homes with lower maintenance costs compared to traditional homes.

Zoltán Kalmár, describing the comprehensive industry analysis, said that although digital solutions have clear and in many cases visible advantages, companies do not necessarily rely on them yet. “Real estate businesses are less willing to pay for innovative proptech solutions and there is no openness to innovation in all players. These two factors were the weakest results in the research,” the expert added.

AI will play a bigger role in the future

The proptech sector, which is about to expand, will be able to rely more and more on artificial intelligence (AI). Among other things, by putting digitalisation in order, the processing of the vast amount of data collected by sensors installed in buildings and offices can be entrusted to artificial intelligence, which can even reduce maintenance costs. Furthermore, it can have many applications in machine learning. This is because, for example, artificial intelligence can help with forecasts, for example, it can draw attention to the need for various maintenance or even a possible failure. It is no coincidence that the Hungarian government's strategy for the development of artificial intelligence for 2020-2030 includes digitization guidelines for building operation and maintenance.

According to the analysis, domestic solutions are based on a wide range of technologies, but in recent years, the advancement of Building Information Modeling (BIM), shared solutions, and the recovery of the IoT market have become spectacular. If specific technology markets reach a higher level of maturity, there is huge potential 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 similar proportions by real estate consultants, developers, end-users, who can be, among others, office tenants or homeowners, and real estate companies.

Of course, resources are also needed for proptech development and growth. However, according to the survey, 41% of the Hungarian companies involved do not currently need an investment, which they see as necessary at a later date. 24% plan to raise funds in the medium term, 29% are already considering the same in the short term, and 6% do not want to raise external capital at all.

According to the head of ProptechZoOm.com, the development of the domestic proptech sector, which is still weak compared to CEE or even to the global level, is key for as many users and real estate companies as possible to learn about the new technological solutions and start using these developments. That is why ProptechZoom.com will place great emphasis on education and the widespread dissemination of new technologies in the future.

The full Hungarian proptech market analysis will soon be available for download from proptechzoom.com for registered users.