The property technology (proptech) market is projected to grow significantly, with an anticipated compound annual growth rate (CAGR) of 9.3 percent from 2023 to 2033, according to Future Market Insights (FMI). The predicted surge is an indicator that proptech remains popular and a key part of the real estate industry, as its market value is expected to increase from $19.6 billion this year to $47.8 billion by 2033.
New technology-based solutions have helped close the communication gap between startups and real estate firms, which has allowed the proptech market to grow, according to FMI. Artificial intelligence (AI), data automation, Internet of Things (IoT) adoption and sustainable tech are some of the trends that created this expansion, leading to cost savings, better customer experiences and increased revenues for businesses.
The real estate industry’s growing embrace of technology has also been key in the proptech market’s growth. Proptech has helped improve asset and facility management in commercial real estate buildings, decreased the need for in-person meetings and provided CRE investors with data-driven property research, which has increased efficiency and accuracy.
Meanwhile, developers are adopting project management and communication technologies, FMI reports. Tech advancements such as AI and virtual reality are moving the CRE industry forward and creating more potential for the proptech market’s expansion.
Proptech market expected to grow around the world
In 2022, the U.S. claimed a 20.4 percent share of the proptech global market, according to FMI. Increased investments in smart home technologies and IoT solutions geared toward property management and energy efficiency helped the U.S. grab such a significant share.
Proptech’s anticipated growth isn’t limited to the U.S., however. The market is also expected to expand fast in India, with a CAGR of 12.5 percent by 2033, due to technological advancements and increased digitalization within the real estate industry. China’s proptech industry is also projected to experience remarkable growth — experts forecast a CAGR of 10.4 percent by 2033. The country’s flourishing real estate market and fast technology adoption have been key factors in the surge.
Additionally, the U.K. proptech industry is projected to grow gradually — 8.4 percent CAGR by 2033. Cutting-edge proptech solutions within the country’s thriving real estate sector is driving the projected growth. Australia is also expected to see more gradual proptech growth with a CAGR of 3.4 percent as the country embraces property technology solutions to improve its CRE environment.
Proptech market to grow — and remain competitive
Longstanding businesses within the real estate industry and new parties focused on cutting-edge tech will have key roles in the proptech market, FMI reports. Their services will include offering virtual property tours, Internet marketplaces, data analytics tools and property management systems.
The most successful companies will be those that can deliver user-friendly, effective and economical solutions that meet key industry players’ needs, including CRE developers, landlords, buyers and agents. Despite the competitive landscape, there’s likely room for businesses of all sizes to excel.
“While larger corporations use their resources to increase their market presence and acquire potential startups, smaller businesses frequently concentrate on specific areas and deliver disruptive advances to the sector,” FMI said.