Virtual meter: how digitalization is changing the real estate market
Digitalization in real estate is gaining momentum. Last year, about 20% of all housing in Russia was sold through electronic platforms. This is 5.7% more than in 2023. The growing interest of participants in digital services is dictated by the general trend towards digitalization, speed and transparency of the appraisal system. Among the risks of going online, experts emphasize the possibility of providing unreliable data and technological dependence. How digitalization is changing the real estate industry - in Izvestia's article.
Safe connection
Digitalization of real estate transactions is becoming increasingly popular: in 2024, 19.4% of the total volume of housing in the country will be sold through electronic platforms. This conclusion was reached by the authors of a study conducted by the Plekhanov Russian Economic University together with the center "Analytics. Business. Law" (available at the disposal of "Izvestia"). The data presented shows that the monthly audience of the leading digital platforms in Russia exceeds 17 million people per platform.
In total, according to the Unified Interdepartmental Information and Statistical System (EMISS) of Rosstat, 3.8 million families will improve their housing conditions in 2024. On average, according to the information of classifides (resources with advertisements from individuals and legal entities), each platform accounts for about 35 thousand online real estate transactions per month.
Active use of digital services has accelerated the search for housing by 22 times. Registration of transactions, in turn, is three times faster.
The security of transactions concluded on online platforms is ensured through multi-level user identification, online reputation systems and intelligent content moderation. The integration of platforms with government services also increases reliability and simplifies the process of document processing.
These security measures helped to reduce the number of fraud attempts by 1.5 times last year. The number of calls from intruders also decreased - it fell by 40.6% compared to 2023.
Social effects
A less obvious, but pronounced trend is the increased contribution of digital real estate platforms to the development of the domestic tourism industry, analysts are convinced. First of all, we are talking about the increase in the number of daily rental offers, especially relevant for domestic travel.
The volume of such offers has grown by 29% since 2020. Over the past year, for example, in one of the real estate classifides, users concluded 1.38 million deals on short-term rentals. The total amount amounted to 21 billion rubles. And the total effect of such transactions is estimated at 260 billion rubles, which is equal to 0.1% of Russia's GDP in 2024.
Another social effect that ordinary users can feel is a significant increase in the transparency of pricing. The vast majority of Russians today (87%) consider the cost of housing to be unreasonably high. Digital platforms allow potential buyers to better understand what makes up the price per square meter of a particular property.
In addition, digital services working within the platforms reduce the time of evaluation of objects by 73%. Accuracy is improved by 8.2%. Machine learning and neural networks are actively used.
Multiplicative effect
The real estate industry was spurred to active digitalization by the difficult economic situation. The Central Bank's tight monetary policy and the abolition of favorable mortgage terms are forcing market participants to look for new ways to maintain stability and support demand. Some market participants believe that digital platforms and marketplaces are now acting as drivers of its growth.
An even greater effect from the use of digital platforms in the construction industry can be achieved through sales automation (transaction time will be reduced by 40-60%), the introduction of virtual and augmented reality technologies to demonstrate properties (conversion of views into purchases will increase by 25-30%), and integration with banking services for rapid mortgage processing.
All this is important because the digitalization of the construction industry has a multiplicative effect on the Russian economy. Each ruble invested in real estate generates 4.4 rubles in related industries - construction, trade, manufacturing, energy and housing and utilities.
A cautious approach
Digital platforms in real estate play a key role in simplifying transactions and improving communication between market participants, says Elena Zvonareva, Advisor to the Minister of Construction and Housing of the Russian Federation.
The construction industry is forming a vast ecosystem of seamless digital interaction between various systems, she believes. In particular, we are talking about the integration of government systems, the use of drones, artificial intelligence and other modern technologies. This leads to increased efficiency and lower costs.
However, the system is far from perfect and has its disadvantages. One of the main risks of digitalization in real estate lies in the security issues of the data provided by both buyer and seller, warns Daria Kireeva, director of the Construction business area of the New Markets department of Reksoft Group. To solve the problem, special attention should be paid to user verification.
Thepossibility of providing all the data necessary for decision-making when transferring the purchase of an object "into digital" is limited, emphasizes Nikolay Verkhovsky, director of programs on digital transformation at the Skolkovo School of Management.
- As a result, it is possible to buy a "cat in a bag". In the case of household goods, if you receive the wrong product, the price of a mistake is small, because you can always return the item. With real estate can not do so. In this sense, there is a risk of fraud and manipulation of buyers," warns the expert.
We should not forget that platforms can become the target of cyberattacks, points out the head of the information department of the independent trade union "New Labor" Maria Koleda. Attackers may try to steal users' personal data or hack into the payment system.
- To prevent this, platforms use multi-stage authentication and encryption, but this does not guarantee that in the event of a cyberattack personal data will not "go" to third parties, - says the expert.
Another disadvantage of digitalization is the risk of technological dependence, adds Daria Kireeva.
- Companies may face a situation when they become too dependent on specific platforms and technologies, which may complicate their adaptation in case of changes in market conditions or the emergence of new competitive solutions," she says.
In addition, transactions may be difficult or impossible in the event of a platform failure or internet outage, suggests Maria Koleda. To mitigate this risk, services are implementing backup systems and offline solutions.
The problems with online transactions are aggravated by the lack of regulation, says the Izvestia interlocutor. Legislation does not always keep up with the development of technology, which increases risks.
The fact that digitalization may increase inequality in the real estate market is also important, the expert believes. Some participants may not have access to digital technologies or may not know how to use them.
- To solve this problem, platforms are developing mobile applications and training materials, but in small towns, many companies still operate mostly offline," Koleda believes.
Digital dominance
In the near future, we can expect the continued introduction and improvement of digital solutions in real estate, says Daria Kireeva. Digital platforms will continue to grow in popularity.
- This will be largely due to the younger generation entering the market and using digital resources to a greater extent. Here we should talk about the integration of all stages of real estate purchase into a single space," the expert points out.
Nikolay Verkhovsky predicts thata complete transition to digital real estate purchases may take place in the next two years. This will increase the turnover of objects on the market.
There will be further growth in the use of artificial intelligence and big data analytics to offer more accurate recommendations to users, Kireeva believes.
- One scenario is that we will be equipped with AI agents who will be fully responsible for transactions - from selection to purchase and subsequent sale with the acquisition of a new object," Verkhovsky predicts. All of this, he says, could happen within the next five years.
When continuing the development of digital platforms in the real estate sector, it is extremely important to take into account the interests of market participants, says Maria Koleda. In her opinion, it is necessary to develop mechanisms to protect the rights and interests of all groups involved in transactions so that they can take full advantage of digitalization.
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