If we look at how financial markets, travel and banking have changed over recent decades, we see a fundamental shift. As recently as the 1990s, buying shares meant calling a broker, paying high commissions and waiting several days for the trade to settle. Today, you can buy a share – or even a small fraction of one – through an app on your phone in a matter of seconds, with a minimal fee and full knowledge of the current market price. Compared with these industries, however, the real estate market has remained stuck in the past. The way property is valued, bought and transferred is still slow, costly and full of lengthy processes and intermediaries.
A Complex Process for Outsiders, a Significant Advantage for Professionals
Today’s real estate market is marked by significant information asymmetry. For someone who is not a professional in the field, property certainly does not seem simple – quite the opposite. The entire process involves complex contractual and legal relationships, lengthy administrative procedures and a host of technical and market parameters that are difficult to navigate without day-to-day experience.
Although the basic details in listings may look clear at first glance, assessing the real price and risks of a deal is challenging in practice. The average buyer in our region sees only asking prices on property portals, which often differ significantly from the amounts at which deals are actually closed. They cannot accurately calculate future costs, real returns, or how quickly the property could be sold if needed. This is also why many people are drawn in by well-executed marketing and buy properties that are overpriced or poor investments.
On the other side are real estate professionals who know how to navigate this complex environment and have access to non-public or hard-to-obtain information. It is precisely this informational edge that gives them a major advantage today and allows them to earn above-average returns from the fact that the market is inefficient and full of gaps.
Examples of Changes Already Gradually Opening Up the Real Estate Market
This opaque state of affairs, however, will not last forever. Just as digitalisation gradually removed costly middlemen from selling airline tickets, comparing insurance and trading on the stock exchange, it is beginning to change the world of real estate as well. In more developed markets, solutions are already in place that are gradually gaining ground in Europe too:
Price maps of actual sales and accurate AI-powered valuation: While the average buyer here still relies mainly on estimates and asking prices, data is open in more transparent markets. A good example is Dubai, where BizPartner Group also operates, or the markets in the United Kingdom and the United States – there, actual sale prices from registries are publicly searchable almost in real time. The gradual introduction and refinement of price maps is also moving forward in our region. Once this real transaction data is combined with artificial intelligence that can assess demographics, planned infrastructure and rental yields within seconds, accurate valuation will be available to everyone. Although a physical inspection of the technical condition will remain essential for specific buildings, for ordinary flats and houses the room for selling at artificially inflated prices will disappear.
Buying fractions of property: Just as the stock exchange allowed small investors to buy fractions of expensive shares, fractional ownership and tokenisation are coming to real estate. An investor no longer needs hundreds of thousands of euros, a mortgage and months spent on purchasing an entire flat. Through regulated digital platforms, in a number of foreign markets they can already buy a small share in a specific income-generating property, collect a proportional part of the rent and, if needed, easily sell their fraction on a secondary market. This opens property up to a wider pool of capital and makes it more liquid.
Digital land registries and the incorporation of technology into law: Blockchain technology can securely record ownership shares and automatically trigger a transfer the moment the buyer pays the purchase price. For such a system to fully replace complex contractual chains, escrow arrangements and weeks of waiting at public offices, however, it must be directly linked to state records and backed by legislation. Several countries are already gradually incorporating digital ownership registries and automated contracts into their laws, and it is only a matter of time before this standard becomes widespread.
Lower transaction costs and pressure on the prices of ordinary properties: Making the market more transparent and faster will bring a significant correction in costs. First and foremost, the fees associated with the transaction itself will fall – high commissions to intermediaries, the costs of lengthy legal and administrative processes, and the price premiums that buyers today pay simply because of a lack of information. Add to this the fact that automation and robotics will gradually reduce the cost of construction itself, and ordinary, standardised properties will face downward price pressure. Unique locations with a limited supply of land will retain their value in the long term, but it will no longer be possible to profit purely from the other party’s lack of knowledge.
The Window of Opportunity Is Closing: If You Know How to Do Deals, Act Fast
Because changes to laws and state registries progress more slowly in real estate than in purely digital industries, this transformation will not happen overnight. We expect there is still a window of several years during which the market will continue to operate as it has until now.
For entrepreneurs whose business today profits from the inefficiency of this market and from an information advantage, the first message is therefore clear: act fast, because the window of opportunity will gradually close. Once price maps of actual sales, instant data analysis and simple online transfers become the norm, the above-average margins stemming from better access to information will be exhausted.
This applies above all to flippers, intermediaries and real estate agents who today know how to find an undervalued property on the ground, resolve its legal or technical pitfalls and successfully close the deal. If you operate in this segment and have a working model, the coming years will still allow you to make full use of this market position. It is precisely for such active players that BizPartner Group provides alternative real estate financing. The partnership is built on a clear foundation: you know what to do in the market and where the good deal is, and we provide the money for it.
Companies That Ignore the Change Will Be Replaced
Focusing only on today’s deals, however, is not enough. We live in a time when economic cycles are accelerating, and what reliably held true yesterday may no longer hold true today. Believing that real estate trading will look the same in five or ten years as it does today is a fundamental mistake.
The second message is therefore equally direct: companies that fail to adapt to the coming changes, or choose to ignore them, will be replaced by those who embrace this change correctly and in time. Just as traditional stockbrokers and brick-and-mortar travel agencies that refused to move online came to an end, players in real estate who rely on the old approach and the market’s current lack of transparency will also lose their place.
Starting to build a new strategy only once technology and new legislation have definitively changed the rules of the game will be too late. Those who succeed in the long term will be the ones who build on a well-thought-out system rather than relying on chance opportunities. That is why these changes need to be considered with the future in mind, and businesses need to start preparing today for a more open, faster and technology-driven real estate market.
Because in business, fortune always favours the prepared.