As the PropTech industry grows, there will also be many risks for the market. Factors such as market uncertainty, industry instability, legal issues, ethical aspects, and so on pose risks to the sustainability of the PropTech industry.
However, the biggest risk to the PropTech industry comes from the technologies employed in the property industry. This causes a lot of concern as technology is an integral part of the industry and cannot be discarded at any cost.
The PropTech industry has grown considerably recently, particularly after the COVID-19 pandemic. However, certain risks question the growth of the PropTech industry. The risks to the PropTech industry include:
PropTech is a booming market. Nevertheless, since the PropTech industry is relatively new and is undergoing rapid changes, many new and unknown factors play a role in the acceleration and deceleration of the industry, making the PropTech market covered by a cloud of uncertainty.
At times, the PropTech market is suspected of being at risk of getting hit by worse market conditions. This calls for extensive market research, due diligence, and cost consciousness before investing in PropTech startups.
The technical part of the PopTech industry may pose difficulty in many ways. First, the technical parts like cloud computing, the Internet of Things (IoT), big data, virtual and augmented reality facilities, artificial intelligence, machine learning, and so on require extensive technical skills and knowledge.
The existing systems and processes in the property industry will also require a technological uplift with the introduction of PropTech solutions. Thus, the technical part of the PropTech industry may pose a risk to the success of the industry.
The PropTech industry has to address many legal and ethical aspects of dealing with the data collected on properties. The data collected about the property, occupants, location, management, and other details must not violate the legal norms such as data privacy and anti-discriminatory law of the involved juridical region.
The collected data must also be stored safely while answering questions of data ownership, transparency, and control on the ethical front. The use of decentralized smart contracts and blockchain technology while handling property-relevant documents would also require appropriate legal approval.
The use of cutting-edge technologies like blockchain technology, cloud computing, big data, and so on may enhance the processes involved in the PropTech industry. However, these smart technologies are not fool-proofed for cybersecurity threats.
Since cost-involved and information-involved transactions are carried over cyber platforms in the PropTech industry, the security of the cyber world comes into question.
Algorithmic bias is a serious accusation placed upon the employment of technology in the property industry. Tools like automated tenant screening may have to undergo screening for data bias to prevent segregation or discriminatory effects of any kind.
Since artificial intelligence models may not be free of algorithmic bias, the PropTech industry may have difficulty utilizing AI models not screened for biased decision-making algorithms in the long run.
There may be many risks facing the PropTech industry. However, with due diligence and careful consideration, most threats facing the PropTech industry can be addressed.
Technologies employed in the PropTech industry can be strengthened using state-of-the-art technological developments that will prove hazard and hassle-free technological support available in the PropTech industry.
The PropTech industry, however, can march forward in the hope that the evolving society cannot do without technology and will rely on it for any property-related endeavors.
PropTech is a highly successful industry with a higher scope for growth in the following decades. The PropTech industry has seen tremendous growth, especially after the COVID-19 pandemic.
Robots have been a helpful component in rendering different kinds of services in the PropTech industry. Due to its usefulness in the monitoring and management of smart property solutions, the employment of robots will not be a threat to the PropTech industry.
PropTech is useful in maintaining smart buildings, managing properties remotely, enabling safe transactions, generating real-time data on properties, and so on.
By Proptechbuzz
By Ravi Kumar
