Real estate is one of the few sectors that has consistently provided investors with reasonable returns over a lengthy period of time. The sector hardly has pockets that have given negative returns in the long term. However, real estate developers and builders have always experienced cash flow issues and hurdles. Despite the government’s best efforts, the sector remains unorganized, which contributes to the instability. Second, there is no effective process in place to ensure that construction is completed on time, that raw material prices are reasonable, and that labor difficulties are addressed. Customers have benefited greatly from GST and RERA, but developers have been subjected to more stringent regulations and processes over time.
The biggest flaw in the industry has been that it has never looked to technology as a solution to any of the problems it has encountered. COVID was a wake-up call for the industry, causing developers to recognize the urgent need for tech-based solutions. During COVID, technological interventions aided developers in ensuring improved profitability, on-time project completion, and the resolution of financial challenges relating to capital requirements.
More and more real estate companies should utilize technology in the future. It will not only make the real estate business model more structured, but it will also attract corporations that will profit in the long run. Here are five reasons why businesses should invest in technology.
Technology helps maintain the right inventory: One of the biggest challenges for the sector is to keep a check on the increasing raw material costs. Cement and steel prices have almost seen an increase of 30-80 percent in the past year. It is the primary reason for cost overrun in projects. Technology can help maintain the right inventory for a longer period of time, without being worried about price escalation. It can not only help in maintaining inventory but also help in delivering the right pricing of the final product, keeping in mind the inflation in the prices of raw materials.
Technology can mitigate the workforce demand-supply gap: This has been a bone of contention for developers for ages. The recent pandemic has been even worse for the developers. Labor force leaving the cities to their home towns was a nightmare come true. This was one of its kind events, but labor has been a constant problem for the sector. Why can the sector not adopt technology where workforce requirements can be predicted in a manner that day-to-day needs are being defined using definitive tools? Need-based smart tools can be developed which can help developers understand the day-to-day needs of the workforce for a particular project.
Lowering operating costs: Automation and smart building technology can help developers reduce costs. Manpower costs can be lowered using these smaller technological advancements, which can certainly boost revenues in the long run.
Tracking daily activity: The area under development can be tracked every day with real-time data. It can further help in giving the right kind of targets to the workforce improving productivity at the construction site. It can help to track the best workforce. Technology plays a very important role in boosting the morale of employees, which can further lead to the growth of the company.
Optimization of the workforce: A data-driven workforce and workplace planning can bring immense opportunity. Companies have always sought new ways to manage the large majority of their operational costs. This is directly related to workforce management in the real estate sector. The pandemic has taught us how the workforce can be optimized using technology, even when one is working remotely.
We constantly seek betterment, real estate is one of the most important sectors in the country, which directly contributes to GDP growth and job opportunities. While government support is always needed to keep the sector rolling, companies need to keep exploring opportunities, which will improve the performance of the sector as a whole. Technology adoption plays a significant role.