The property industry thrives off the movement and migration of people. With the travel restrictions and lockdowns, PropTech companies have been hard hit. During COVID-19, we have seen PropTech companies make redundancies and cuts as their businesses have significantly reduced. However, we are also seeing some companies continue to accelerate their growth. Here, I explore how the PropTech industry has adapted to COVID-19 and highlight some of the changes in consumer behaviour that the pandemic has brought on.
A shift to mid- and long-term rentals
Short term rental platforms were crippled at the start of the pandemic as leisure bookings were halted. Vacation rental search platform, Holidu, reports that they saw bookings and revenues plummeting weekly by -98% in March and April. These platforms and their landlords quickly shifted their businesses to continue to operate and stay afloat. Many of these platforms that previously offered shorter term rentals started to focus on pushing midterm and longer term rentals. We can see that this approach has proven to be successful as there is still demand for mid and longer term rentals.
Green and rural locations
Despite the pandemic, renters are still moving into new properties. As remote working continues and people are no longer required to commute into an office, workers are moving outside of city centres into suburban settings in the hunt for more space and greenery, and cheaper rents. Remote working has made nomadic living trendy as well. We can also see startups in this space strengthening their position as exemplified with the recent merger of NomadX and Flatio. Both platforms have been seeing strong signs of growth during the pandemic.
Co-living against isolation
There is also a growing interest in co-living spaces. People who otherwise would be living on their own are opting to live in co-living spaces to combat loneliness and social isolation. Co-living spaces offer their residents amenities like community events, co-working spaces, fitness facilities, and more. Some notable co-living companies operating in Europe include: Vonder (multiple locations around London and also locations in Berlin, Warsaw, and Barcelona (opening soon), The Collective (UK), and LifeX (properties in Copenhagen, Berlin, London, Paris, Munich, and Vienna – they just announced a €6 million raise last month).
100% digital rental and purchase process
Real estate agencies traditionally primarily operate offline with tons of paperwork, manual tasks, and face-to-face interactions. In the future, facilitating the entire end-to-end process of renting or buying a property digitally will be the norm. This process includes searching for properties, viewing properties, necessary KYC checks, and contract signing. The pandemic has pushed the industry to become more digital. Since the start of the pandemic, online property portals where consumers search for a property to buy and rent have had a surge in activity. There have also been some startups who are digitalising property purchasing that have announced raises recently including Offr, who raised a €3 million seed round led by Barclays and Norban, who raised €1.7 million. During the first COVID19 lockdown in March, Offr facilitated the world’s first, end-to-end, digital property transaction.
As travel restrictions started to ease across Europe this past summer, the short term rentals segment rebounded. Holidu saw a bounce back in bookings as European restrictions were lifted. While many countries still have travel restrictions and quarantine measures in place, travellers are opting for domestic holidays and destinations that are accessible by car or train. For travellers that are still interested in short term lets, companies are offering a touchless, digital driven experience from keyless entry into properties to chat-based concierge services. Companies are also emphasising on meticulous cleaning of their properties. Helsinki-based startup, Bob W., has launched a “Ridiculously Clean Standard,” which seals their properties following a thorough 63-step programme to sanitise and disinfect each of their properties.
Co-working communities of the future
Another PropTech segment where we should expect to see a comeback is co-working spaces. As people are exhausted from working at home, people will start going back to office spaces. People are craving to return to an office space for a sense of “normality” although offices remain closed. As an alternative, people will turn to using co-working spaces. Davide Dattoli, co-founder and CEO of Talent Garden, Europe’s largest network of tech and digital professionals with campuses in 28 locations, is bullish about coworking. Dattoli believes that coworking will continue to grow as people value a sense of community in a physical space with real life human connections that cannot be replicated online. And if you’re personally interested in finding a co-working space visit in Europe, check out EU-Startups’ guide to the coolest coworking spaces in Europe.