The real estate market is extremely conservative. But today in Russia it is experiencing global changes that are increasing the already high competition among developers. These changes are provoked, on the one hand, by legislative changes in the development sphere, and on the other hand, by the rapid development and penetration of IT technologies into the real estate sphere.

First of all, we are talking about amendments to the law on participation in shared construction (214-FZ), the consequence of which is a ban on the use of funds of shareholders and the mandatory introduction of escrow. The new system of financial relations between developers and shareholders contains a number of significant concessions. Thus, the developer can work according to the old scheme if the facility is more than 30% built, and the shareholders have managed to buy up more than 10% of the apartments. Only giants of the Russian real estate market, such as LSR, PIK, Etalon, can boast of such figures.

Young companies engaged in the construction of 1-2 projects will find it much more difficult to survive in the new conditions. In the worst case, they will be forced to leave the market, and in the best case, they will have to enlist the support of old-timers in the Russian real estate business. In order to stay in business and develop successfully, they will have to keep up with new trends in the real estate market.

New modern technologies and innovations that change the communication between sellers, developers and buyers, and also affect the nature of the work processes themselves, can be a great help for small and large players in the real estate market.

Fresh blood and innovation

In the conditions of market monopolization and high customer focus of leading developers, young companies in pursuit of sales growth are already choosing the path of implementing innovations and cooperation with technology startups. For example, the GC "Osnova", founded in 2016, is developing a smart home project together with the Swiss company Schindler. Although PIK recently announced its intentions to use smart home systems.

Not long ago, the group, together with South Korean companies, created a $10 million venture fund to develop artificial intelligence, big data, and blockchain. It is also looking for innovative solutions in the field of building materials or, for example, monitoring workers. Thus, the company has implemented a system for monitoring the behavior of workers on the site: it records downtime or, for example, attempts to steal building materials.

The development company D54, founded in 2017, also places emphasis on innovation. First of all, the young developers are developing VR technologies in the construction business. With the help of a special mobile service and 3D glasses, clients can walk around the future house and evaluate the layout of the apartment without leaving the company's office.

Similar innovations are being implemented by Ingrad Group of Companies. Thus, potential buyers can evaluate the RiverSky residential complex through a special AR application. It allows you to view the courtyard and the infrastructure close to the property, evaluate the options for finishing apartments and views from the terraces.

Alexander Alekseev

Born in 1986 in Moscow. Graduated from the Faculty of Computational Mathematics and Cybernetics of the Lomonosov Moscow State University.

Since 2007 – head and technical director of a number of startups.
Since 2016 – Head of Mobile Development at CIAN.
Since 2018 – Head of the Yandex.Real Estate service.

However, in reality, the technologies are still working poorly: VR projects require serious investments of both time and money. Panoramic tours of apartments are more of a new way of communication than a tool that significantly increases sales. Therefore, developers are in no hurry to implement VR, AR and 360°, although the prospects for these technologies are impressive. According to Goldman Sachs forecasts, next year, revenues from sales using VR will grow to $750 million.

Between the seller and the buyer

Once classic classifieds, today services such as Yandex.Real Estate occupy a prominent place in the relationship between seller and buyer. The services not only provide consumers with available offers on the real estate market, but also help them make the right decision. Today, they act as a medium between buyers and sellers - the information available on classifieds has long been determined not only by standard points such as the price of housing and its dimensions. Modern services allow you to see the full picture of the property and its surroundings and largely educate the end buyer. Thus, Yandex.Real Estate displays information on infrastructure and transport convenience, and also shows analytics on the payback and cost of similar housing in the area. Thanks to the trend towards openness, buyers can make a choice much faster than before.

Market professionals are starting to play the role of influencers: they provide the facts necessary for decision-making, and technologies are becoming an aid in everyday tasks. The demand for human communication certainly remains: buying an apartment is often a big and responsible transaction in a person’s life, and the level of trust in technology is not yet so high that buyers would entrust their main assets to artificial intelligence.

However, technologies and digitalization of the real estate market are already changing the very nature of the work of developers and realtors. Classifieds automate the routine work of realtors, find a client and bring him to the transaction more prepared, and therefore ready to conclude a contract with a higher probability.

How to Sell in a Buyer's Market

Year after year, buyers are increasingly conscious when choosing housing. Today, it is the buyer, not the developer, who dictates the requirements for the characteristics of the house and the space around it. Therefore, a high level of customer focus is being formed among the most influential developers.

Today, the market offers a wide variety of loyalty programs and other marketing activities from developers - some of them may seem controversial, but one way or another, they mean that large companies are ready to pay more attention to customers not only at the time of purchase, but also after it.

A common practice among developers is certificates and discounts for services of third-party partner companies. For example, the Absolut Group of Companies issued gift cards to customers for the Auchan chain. Another method is mass leisure events in public spaces of residential complexes (RC), which help create the desired image of the company.

Thus, Samolet-development holds sports competitions between residents of its different residential complexes. Before this, the company organizes free running, crossfit, etc. classes. In addition, the adjacent territory becomes an extension of the residential complex itself: for example, sports events are held on this territory.

Developers pay much attention to the development of infrastructure and cooperation with bloggers. Thus, recently the PIK Group became a co-owner of the service "Kitchen on the District". Now residents of the company's residential complex can receive food delivered to their home within half an hour using a mobile application. The co-owner of the Samolet company took a similar path, having invested in the Professor Puf bakery chain. The LSR Group gave the popular Instagram blogger Liza Miller an apartment in its ZILART residential complex for a series of posts about the place.

A major player in the construction market, City – XXI Century, even branded an entire cinema hall in Formula Kino on Lubyanka. Incidentally, the company has long been engaged in the construction of sports clubs and cooperation with them.

This course on increasing customer loyalty is closely connected with digitalization and “rejuvenation” of home buyers. Thus, according to Nielsen, the average age of buyers in 2017 was 34 years. Automation and comfort are important for this group of people – in particular, this is why the demand for systems like smart home or modern building materials is increasing. In addition, the importance of the location of the apartment is growing: according to Nielsen, 91% of respondents knew exactly in which area they wanted to buy a home. Apartment owners are increasingly positioning themselves as active participants in the housing community.

Today, real estate sellers are increasingly focusing on a specific person, expanding their powers for this purpose. Developers offer not just housing, but the entire space around the property. Realtors do not just show apartments, but act as multidisciplinary specialists who are ready to delve into the smallest details of clients' requests. And for today's buyer, this has become the norm, although some time ago it was impossible to even dream about it.

The real estate market is a huge organism with high costs for all participants in the process, and the price of a mistake here is critical. But even it is transforming before our eyes, and someday innovations that are currently viewed with skepticism will become the same norm.

New technologies help young and established companies