Jean-Paul Scheuren, President of the Chambre Immobilière du Grand-Duché de Luxembourg, takes stock of the digitalization of the sector.
Founded in 1971, the Chambre Immobilière du Grand-Duché de Luxembourg is an independent, non-profit organization, which aims to foster great relationships between its members and their clients.
The association brings together 252 real estate professionals from the three main professions of the sector: real estate agents, co-ownership agents, property managers and promoters. President Jean-Paul Scheuren provides an overview of the sector’s digitalization potential.
Jean-Paul Scheuren, what is the potential of digitalization for these three professions?
Digitization represents an enormous potential for our activities and processes: from anti-money laundering procedures to better identify the origin of client funds, to the preparation and conclusion of contracts, all in electronic mode and with certified signatures. Eventually, the paper-based system will gradually disappear.
Which activities precisely could be impacted by digitalization?
For example, big data and artificial intelligence will have an impact on the evaluation of goods and the analysis of the market; already, the marketing of goods and the prospecting of clients are increasingly carried out with digital tools and technologies. We are also seeing the emergence of real estate coaching services, agentless sales and rentals or home staging; the future will belong to virtual home staging.
Eventually, we are moving towards a decommissioning of services; the agent will no longer offer all the services for a single commission, but rather à la carte services according to the clients’ requests.
“Digital platforms remain strong competitors in our business; but they will not completely replace the real estate agent.”
Can digitalization lead to new forms of access to property?
Blockchain will have a significant impact on the property business. The technology opens up new business models, financing and access to property.
The BlocHome project launched in October will be a perfect example: its approach is based on a separation between ownership and use of the property; in other words, there will no longer be a clear difference between an owner and a tenant, everyone will be part owner and part tenant.
In concrete terms, you take a building and securitize it as a financial vehicle. We register it in a digital register, and we issue a secure token, for example, one token corresponds to 1/1000th of a building. No more need to transfer the property.
The tenant will be able to deduct from his rent what he has invested in the vehicle.
This is a business plan that anticipates a fundamental change in the perception of ownership.
Similarly, blockchain technology will certainly be disruptive, as far as real estate development is concerned – especially in terms of plans and sales processes – all at a reduced cost of equipment.
What about real estate intermediation?
Digital platforms remain strong competitors in our business; but they will not completely replace the real estate agent. The latter will indeed keep his raison d’être and will continue to bring an added value that a digital robot could not offer.
On the other hand, digital technology will allow new forms of collaboration between agents, who will work more as a network, for example through a real estate exchange and a new commission model.
With this collaborative approach, we will see the end of lone wolves.
This article was first published in Silicon Luxembourg magazine. Get your copy.