Innovating with AR & VR in Real EstateMay 29, 2019
While it is true that AR/VR has made waves in the world of entertainment, this technology also has huge potential in the real estate industry. According to calculations by international real estate adviser, Savills, the total value of all developed real estate on the globe reached US$217 trillion in 2015, making up roughly 60% of mainstream global assets. For a long time, the real estate industry had been a rather silent participant of technological transformation, but over the past few years, it has become the hotspot for investment and entrepreneurship development.
To better understand the applications of AR/VR in real estate, we have segregated them into four buckets:
- Retail: AR/VR technologies have been shown to improve transparency, consumer experience, and deal closure rates for real estate retail. In fact, in a 2018 Deloitte survey of 500 commercial real estate investors, nearly half of them felt that AR/VR should be a priority for commercial real estate companies. A key focus has been on the potential of AR to help buyers find properties by using the camera on their phones to see property listings in the vicinity. VR technology supports sales by allowing millions of people to virtually visit properties without leaving their homes.
- Home Décor: AR/VR provides unparallel advantages for realtors and end-users to virtually design a property. Virtual staging and décor technologies reduce the cost and hassle of installing furniture and enables consumers to choose from a variety of options available from different retailers. A well-known example is Ikea where customers can view 3D renderings from different angles of over 2,000 products before reserving the ones they want in the app, which directs to the Ikea site to complete purchases.
- Construction: AR/VR adds significant value to the construction industry because it streamlines every process involved in the project. Providing teams with a walkthrough of the entire project, AR allows us to easily capture construction details down to the exact measurements. It also allows to us visualize modifications by easily removing or moving walls or change the design using only a few taps. Saving us time and money, these technologies reduce documentation and can be used to track the smallest errors, which can cause delays at later stages. Construction companies are even using these tools to determine the feasibility of a design and track the project on various construction measures.
- 3D and Virtual Rendering: 3D and Virtual Rendering has gained a lot of traction lately and includes applications in each of the buckets highlighted above. From editing floor plans to furnishing homes in a single tap, the AR/VR market is a goldmine for stakeholders in the real estate industry. Historically, 3D mapping used to be an expensive affair but thanks to low-cost cameras and mobile innovation, companies have launched a number of innovative ideas to bring this technology to the mass. Consumers can simply put on VR headsets and experience 3D virtual tours. Drones are also changing real estate by enabling realtors to capture stunning aerial views of properties is a more cost-effective way.
AR/VR market size projections vary considerably but even on the low end, the numbers show that this trend is growing. Ranging from $34 billion to $547 billion, the differences in projections are primarily due to uncertainty around the growth of complementary technologies like 5G and the sheer number of applications for these technologies. One estimate from Goldman Sachs predicts that at AR/VR market will reach $80 billion by 2025. Overall, the adoption of VR technology has been slower than previously anticipated but on the other hand, AR is gaining ground because of its ability to seamlessly integrate into daily real-world interactions. While we are confident that AR will surpass VR in mass adoption, the future of these two technologies are tied to one another as we continue to explore new applications for digital technologies in a physical world.