There has been a clear spike in interest in extended reality technology and applications over recent months. It is widely recognised that this is due, in part, to the Covid-19 outbreak and the resulting, far-reaching social distancing requirements. As the global impact of coronavirus expands, real estate marketers, sellers and purchasers, particularly in the high end, commercial and residential markets, are finding creative ways to keep the property industry thriving.
One increasingly popular way of doing so is the creation of ‘digital tours’, where physical property is recreated one-to-one as a digital model that can be reviewed by a potential buyer or occupier with an augmented or virtual reality headset. Commercial enterprises offering this type of service (such as DesignBlendz, EasyRender, Archicgi and Pointintime Studios) have flooded the market in recent years, and the Covid crisis has aided a spike in take-up. Santé Realty Investments, for example, recently amassed over 10 million dollars in international sales for their Oasis property development in Spain, with the help of Pointintime Studios‘ virtual reality tour.
Chinese buyers, in particular, are relying more than ever on Digital Reality technologies. In March this year, there were about 350,000 virtual tours per day by Chinese real estate agents and buyers which was about 35 times the amount of virtual tours in January (according to SupChina, a global news site that focuses on information about China). Meanwhile, Chinese builder Modern Land recently live-streamed a sales pitch (with VR access) to prospective buyers that generated 600 contracts in five locations in one day, according to the South China Morning Post.
Despite the surge in interest in these types of applications, there are some obvious drawbacks to viewing digital recreations of property in isolation. It seems likely that, for the foreseeable future at least, most buyers or potential occupiers of commercial and residential property will still want to physically visit a site to get a true sense of it. However, digital tours serve as a very helpful means to pique interest in new developments and offerings. Also, where properties simply can’t be easily visited (due to distance or time limitations of the interested party, or where the property is being built from plan) it is not difficult to imagine a near future where digital tours are one of the sole means of interaction ahead of purchase, particularly where the buyer or occupier is already familiar with the area or has (perhaps) already seen similar end-products from the seller or developer.
If and when digital tours do become mass adopted by property marketers, there will inevitably be ramifications for the associated transactional paperwork. Agreements for lease/purchase of new builds and build contracts may well need revised provisions concerning the right to review ongoing or finished works (and comment on the same), on the basis that the buyer/occupier can instead review the digital model. There are also very likely to be changes to the ways in which a review of works can take place, to include digital analysis. This may feed through to more tightly controlled delivery deadlines and longstop dates, on the basis that advancements in digital recreations and digital twinning of space may well give developers new insights into the construction process and potential snagging issues or faults that previously might only have become clear during the build process itself. It also seems likely that contracts and transfers for both residential and commercial property could soon be updated to address the extent to which buyers have a right to rely on digital models. Indeed, sellers may even be asked to provide indemnities in relation to material errors in digital representations, coupled to purchaser snagging rights to bring physical property in line with any short fall against a digital representation, following purchase.
This is certainly a transitional and potentially disruptive time for the Property market. Rapid developments in the digital space are likely to impact sellers, purchasers, agents, developers, construction teams and property lawyers alike. However, those with their finger on the ‘digital pulse’ are already well placed to evolve and respond.