Magnus Jern: Is the future of luxury real estate in Virtual Reality?

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Real estate is changing. Advances in transport systems, building technology and even 3D printing are leaving their mark on an industry that has been amongst the slowest to take on technological innovation en-masse. Among these technologies, one is just reaching practical maturity now: Virtual Reality (VR).

While it’s advocates have been prophesising VR’s advancement for over a decade, the technology has taken its time to develop. Even now, mobile platforms for VR lack the computational power to create truly compelling environments, and the dedicated VR platforms are expensive and ungainly. None the less, the industry has finally smelt the salts and are waking up possibilities of VR.

Here’s why: Perhaps the most common phrase heard by realtors is “this does not look like the pictures”. Whether you are the realtor or a prospective client, it is particularly annoying to have to rush through traffic, only to be instantly disappointed when entering the house. Sometimes the other party is late, the current tenants were unaware of the viewing, or the key can’t be found. Then there’s the problem of unimaginative viewers at building sites, or the indecisive clients who need 10 viewings before they’ve decided they dislike the bathroom tiles. These factors contribute to ruined deals and cut commissions.

But as VR advances, what used to be problems for realtors are now transforming in to challenges for tech developers, and relatively easy ones at that:

  • Distance is moot point: one can visit antipodal houses in the same afternoon using VR, which will be a fantastic asset for those in the market for isolated holiday homes.
  • Keys, tidying and traffic are also irrelevant.
  • It would be perfectly possible to host an open house, with thousands in attendance, and still maintain the impression of a quiet space, or leave that same irresolute viewer with access to the VR model until they make their decision.
  • During construction, VR can allow prospective buyers to experience and manage details of the property before committing to them. Maybe the space doesn’t get enough natural light, or conversely the sunrise through the second floor bedroom window makes you fall in love with what is to be your new home.
  • As VR headsets become more mainstream in people’s lives, potential buyers could feasibly do a viewing on the move if they wanted to.

The more VR advances, the more possibilities there are: It will soon be possible to ‘fill’ a virtual space with virtual furniture, much like IKEA did with its augmented reality catalogue. Truescale by Immersion is a great example of what this may look like. If viewers uploaded models of their own furniture they could virtually ‘trial’ a house, though they should remember that the virtual copies of their furniture will certainly not hold their weight.

So with all the benefits, why isn’t there a more comprehensive push with this technology? Well, Real Estate VR is a difficult sell to an industry that may suffer from its adoption: per job automation projections position real estate agents among the first to lose their jobs. VR is one element of this, as it allows the land lord to make their space constantly available for unmonitored viewings. It should be remembered, however, that realtors can create the emotional urgency that helps sell a house more quickly, so they will likely offer value to realtor firms for the foreseeable future as “closers”.

As for the other elements holding the industry back, there are a number of things including production cost, adoption of VR devices by consumers and the difference in quality between stationary VR device and mobile. The cost of producing high quality VR content based on existing 3D models can be anywhere from £20,000 to £100,000 for a new development. For existing properties on the other hand 3D models and floorplans usually don’t exist so therefore a £3,200 professional stereoscopic VR camera is required to capture good quality VR. This is a one off investment for estate agents who want to be seen at the cutting edge of a lucrative industry. Luxury estate agent Lucas Fox in Barcelona has been piloting both technologies in the past 6 months and the return on investment seems very promising. (See image example).

But, as with everything in the technology world, prices will most likely come down fast. At first, VR systems will likely be located in realtors’ offices, allowing for a one-stop-shop scenario. As the mobile technology improves however, prospective clients will be able to jump into a high quality VR environment anywhere, such as in their self-driving car or while meeting up with friends. The realtors on the other hand will only host and facilitate the experience, ready to answer any questions the client may have. With technology driving this process so much, the amount of choice for customers will explode, and the hardest part for customers will be choosing among the gems.

 

Magnus Jern, Chief Innovation Officer, DMI

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About Author

Kizzi Nkwocha is the editor of The Property Investor and publisher of The Sussex Newspaper, My Well-Being Magazine, My Making Money Magazine and My Entrepreneur Magazine. Kizzi Nkwocha made his mark in the UK as a publicist, journalist and social media pioneer. As a widely respected and successful media consultant he has represented a diverse range of clients including the King of Uganda, and Amnesty International. Nkwocha has also become a well-known personality on both radio and television. He has been the focus of a Channel 4 documentary on publicity and has hosted his own talk show, London Line, on Sky TV. He has also produced and presented both radio and TV shows in Cyprus and Spain. Nkwocha has published a number of books on running your own business and in 2011 his team won the Specialized Information Publishing Association (SIPA) award for best use of social media. In the UK he runs a successful media consultancy called PRHQ which manages PR for businesses and individuals.

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