Nordic real estate sector becoming increasingly digital
The Nordic real estate and construction industry is modernising through digital technology, with an injection of urgency amid global pandemic
A surge in the uptake of digitisation is reshaping how Nordic housing and construction companies operate, and the changes are having a major impact on how property assets are managed, sold and rented out.
While traditional construction companies increase their use of digital in their operations, real estate businesses are harnessing digital to showcase products and services.
There is, for example, greater use of remote technologies to deliver core products and services in the construction and property domain, including the roll-out of live-streamed open house viewings by real estate suppliers.
The Nordic digital property marketplace’s capacity to fast-track and launch new offerings was highlighted in March when real estate vendors rolled-out initiatives to live stream open house viewings in response to government ordered isolating measures linked to national strategies to curb the spread of the Covid-19 virus.
Digital transformation in Nordic countries is also changing how property transactions are processed, as well as changing how home financing loans are granted by lenders. Meanwhile, paper-based documents now routinely convert to digital formats.
At the other side of the market, Nordic construction companies are looking to use digital technology to create new operating efficiencies. This includes the deployment of next-generation analytics and cloud services.
The consequences of Covid-19 on national economies, coupled with the dramatic societal impact of the pandemic in limiting normal commerce, pose a serious threat to the long-term viability of Nordic construction and real estate sectors.
Construction projects falling
Work on new construction projects has fallen by 60% in Norway, Denmark and Finland. Prices for residential properties have dropped by 20% across the region since the beginning of March, following state-instituted distancing measures that have resulted in a steep decline in home viewings.
The roll-out of live-streamed open house viewings by leading Nordic real estate actors in March underlines the magnitude of the challenge facing the real estate industry in deploying innovative digital solutions to both protect economic viability and weather the Covid-19 storm.
“The seriousness of Covid-19 demanded that we, as a company, innovate. We looked for ways to help our business and contribute to a slowdown of the spread of Covid-19,” said Cecilia Beck-Friis, CEO of Hemnet, Sweden’s largest property portal.
The digital solution launched by Hemnet gives estate agents cost-free access to live-streaming open house viewings online. The Hemnet Live feature allows property agents to connect remotely and safely, without the need for physical interaction, with potential buyers and sellers in open house viewing events using smartphones, iPads, desktop PCs and laptops.
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Hemnet has partnered with the live video tech company Bambuser to deliver the Hemnet Live digital offering. Estate agents are able to showcase the properties on their books through a live stream. The Hemnet Live service is linked to a chat function that allows potential buyers to post questions directly to real estate agents in real-time.
“Our research reveals that over half of the visitors to the Hemnet portal are positive to viewing a live-streamed open house provided the quality of the service meets a consistently high standard,” said Beck-Friis. “Given current circumstances, we expect that the demand for live streaming services will likely increase.”
Part of the digitisation growth taking place in Finland’s housing sector is targeting the home loan market, and specifically housing companies managing high-rise apartment accommodation.
Traditionally, housing companies have issued apartment owners with paper certificates that are stored in banks. Pre-digital, changes in ownership required paper-based certificates to be updated manually. More housing companies are now using blockchain technology to process and record real-estate transactions. This means digitising the progress, including ownership changes and loans financing elements in the sale and purchase transaction procedures.
“Digital housing transactions are faster, more transparent, and smoother than traditional housing deals,” said Sami Honkonen, CEO of Dias, a Helsinki-based company that develops platforms for digital transactions.
Digital Trading Platform
Based on distributed ledger technology, Dias’s Digital Trading Platform (DTP) is exclusively focused on Finland’s residential real estate market. The solution was launched in collaboration with local tech startup Tomorrow Tech and the Finnish cyber security firm Nixu. The DTP service offering is already covering over 96% of the Finnish housing loan market.
Once registered on the DTP, neither the buyer or seller’s banks, nor real estate agents involved in the transaction, need to physically visit lending institutions after the apartment sale agreement. The transaction is conducted entirely on the Dias DTP. The deeds of ownership in each transaction are signed digitally by the supplier and buyer. The stage-by-stage bank financing approval connected to the transfer of ownership is also conducted directly and digitally on the DTP.
Meanwhile, in Sweden, ambitious green energy targets have stimulated joint venture alliances between construction groups and tech innovators. BIMobject, the Malmo-headquartered IT-cloud services company, is developing smarter search engines and next-generation analytics to support its digital offerings to Nordic and global construction professionals sectors.
BIMobject operates a digital library with 1.8 million registered users. The library serves as a meeting point for building materials producers, architects, engineers and construction companies utilising the 3D-based Building Information Modeling system.
“We are seeing the highest growth rates in developing countries,” said Carl Silbersky, BIMobject’s CEO. “The construction industry has an urgent need for digitisation to build smart, affordable, high quality and energy-efficient buildings.”