[News Terms] 'Proptech' Integrating ICT into Real Estate

On the 21st, the National Assembly's Land, Infrastructure and Transport Committee's Subcommittee on Land Legislation postponed the agenda for the partial amendment to the Licensed Real Estate Agent Act, also known as the 'Zigbang Ban Act,' which was primarily proposed by Kim Byung-wook of the Democratic Party of Korea. The amendment aims to elevate the Korea Association of Realtors, currently a voluntary organization, to a statutory body, mandating licensed real estate agents to join the association and strengthening the association's guidance and management functions. Proptech companies have raised concerns that granting the association the authority to monitor and punish agents could lead to abuse of the law by pressuring agents not to use certain platforms.

Proptech company 'Zigbang' is offering a service called 'Zigbang VR Home Tour' that applies virtual reality technology, allowing users to vividly explore every corner of a home as if they had visited it in person.

'Proptech' is a compound word combining 'property' and 'technology.' It refers to a new form of real estate-related services that integrate the real estate industry with advanced information and communication technologies (ICT) such as artificial intelligence (AI), virtual reality (VR), augmented reality (AR), 3D, and blockchain.

Generally, in real estate transactions, buyers have limited access to information compared to sellers or agents. The development of proptech can reduce information asymmetry by providing various data. Additionally, when real estate services are conducted online or via mobile, customers can use them freely without time and location constraints, which also reduces associated costs.

Initially, proptech merely provided simple information such as real estate listings or market prices, but its scope has gradually expanded to include brokerage services like sales and leasing, interior design proposals, and sharing services. By integrating AI, proptech can recommend optimized, customized properties considering factors such as the customer's age, preferences, and distance to their workplace. Through 360-degree VR camera footage, customers can tour properties without physically visiting them. With the introduction of blockchain technology, services enabling the creation of real estate contracts remotely without concerns about forgery or alteration have become possible. In South Korea, companies like Real Estate 114, Naver Real Estate, KB Real Estate, as well as Zigbang, Dabang, Hogangnono, and Oneul-ui Jip are familiar proptech firms to general consumers.

Recently, the role of proptech has expanded into various areas such as real estate investment consulting and financing, real estate project development, and property management. Through proptech's prediction and monitoring techniques, advanced technologies necessary for real estate project development can be secured, and property management has become much easier by applying advanced ICT technologies like big data. For construction companies in charge of building new apartments, proptech technology allows them to first implement design and process management stages virtually, enabling faster and safer actual construction.