Four Major Issues that VR May Create in the Property Development Sector
Four Major Issues that VR May Create in the Property Development Sector
Many have written about the virtual reality benefits for property development. But there’s also cause for concern. There are some issues with virtual reality that could affect its success in the sector. This article examines those issues.
Have you considered adding virtual reality (VR) to your sales process?
If you haven’t, you should. An emerging technology, VR is already making waves in the property development sector. Many digital design software packages are already adapting to include VR elements. Moreover, there’s a new wave of design software that helps those in the sector use VR to their advantage.
Why is this?
It boils down to improved visualisation. Architects can create more immersive models using virtual reality. Property developers can use these models to market their work to potential clients. The idea is that this increased immersion helps clients to visualise properties. This means they don't need to wait for construction to start to see what they're getting.
All of that sounds great. But the technology is not without its problems. In fact, some experts see several issues with virtual reality in property development.
This article aims to explain what VR is and the benefits that it offers. However, it will also focus on some of these issues with virtual reality.
What is VR?
Virtual reality may seem like a brand new technology. But the idea behind it has existed since at least the 1960s. It’s just that the introduction of devices like the Oculus Rift and HTC Vive has seen the technology catch up to the concept.
The idea behind VR is a simple one. Firstly, a designer creates a VR model, game, or movie. They do this using special software. However, the user needs special hardware to explore this model.
Using a special headset, the user can completely immerse themselves in whatever the headset displays. An array of screens inside the headset creates a 3D world that the user can explore. In the case of 3D modelling, a turn of the head may display another aspect of a model. The user can also use special sensors and controllers to explore the scenario presented to them.
In this sense, virtual reality offers a greater degree of immersion and interactivity than typical 3D models. It’s already becoming popular in the gaming industry. Players can immerse themselves in virtual worlds to a far greater degree than they can using their televisions.
The same goes for property developers and their clients. 3D models receive a whole new level of depth when used as part of digital design.
The Virtual Reality Benefits for Property Development
The slow rise of virtual reality in property development comes down to the benefits it provides. Here’s a short list of some of those benefits.
- Greater Visualisation. This is the main benefit that property developers point to. VR is an exceptional marketing tool because it allows clients to see what a property will look like before it’s built. They can explore every single corner of it with a detailed enough model. As a result, they don’t have to imagine what it would look like. They can see it right in front of them. This means that architects and developers don’t have to explain a bunch of complex digital designs to them. Virtual reality could help developers sell their ideas faster.
- It Saves Money. There’s no getting around the fact that you must invest in hardware to make VR work. But it also has the potential to save money for property developers. For example, a good virtual tour may mean that you don’t have to build show homes. The material savings alone outweigh what you’d spend on implementing virtual reality. VR also means less money spent on prototypes, paper, and other materials.
- Reaching More People. The internet provides property developers with the ability to reach international clients. But that reach only extends so far. An international client must rely on photographs and descriptions to make their decisions. But with virtual reality, a developer can showcase a digital design that clients from further afield can explore. It allows developers to demonstrate quality work more conveniently.
- Appealing to Emotion. You can’t rely on a photograph and description to appeal to the emotions of a buyer. It’s usually the property viewing that does that. However, virtual reality in property development has the potential to engage clients emotionally. Again, this raises the possibility of developers selling their ideas.
- Enhanced Interactivity. Imagine you’re presenting a traditional 3D model to a client. They like what they see, but they want to make a few changes. This usually means you have to adjust the model via your digital design software. That takes time. However, a combination of VR and augmented reality (AR) makes your models more interactive. For example, a client may want to look at various pieces of furniture in a room. Your virtual tour lets them explore the room while your use of AR lets them place virtual objects in different places. This creates a more interactive experience that also saves you time.
In the end, the virtual reality benefits for property development boil down to easier selling and more money saved.
But that ignores the potential issues.
The Issues With Virtual Reality
The increased popularity of VR doesn’t only affect property developers and architects. It has wide-reaching ramifications for the entire property industry. This has led several experts to question if VR is really the revolutionary technology that others claim it to be.
Here are just some of the issues with virtual reality.
Issue #1 – The Payment Problem
Many people look towards the cost of buying virtual reality hardware as a major problem for property developers. But it’s likely that a developer could recoup these costs via their clients.
How VR works on a smaller scale presents a larger concern. Think about how the average real estate agent advertises a property online. They’ll offer up a description and a few photographs. There aren’t many costs related to these, which means an agent has no limits on the number of properties that they advertise.
VR may impose a limit. It costs money to create a virtual tour of a property. Even at the lowest end of the scale, it still costs to make a basic tour. And multiply that by the number of properties hosted on a typical property website.
Are real estate agents willing to pay for the benefits above? Will VR provide enough of a sales boost to justify the costs? Who pays for the virtual tours used to advertise a property?
The industry has yet to answer these questions.
Issue #2 – Agent Wariness
In the current setup, the real estate agent plays an important role. They’re the intermediary between property developer and potential buyer.
Let’s look at an example. As a developer, you may create a model property. You’ll hire a real estate agent to conduct tours of that property. The agent uses the property, combined with their industry knowledge and sales nous, to sell a future property based on that model home.
It’s a process that works. But it’s also a process that VR threatens. If property developers start creating virtual tours, they may have less reliance on real estate agents. This may save money for developers. But it creates problems for the agents that they work with.
Remember that a virtual tour can’t answer every question that a buyer may have. It can’t maintain communications with them to keep their interest high either. That’s the real estate agent’s job.
But so too is the conducting of visits to the property. If you take that away from an agent, developers won’t want to pay the same rates.
Now, ask yourself this. How many real estate agents will want to work with property developers who pay less because they use virtual tours?
It’s possible that the early adopters of virtual tours will alienate themselves from real estate agents. That may not be a problem when it comes to viewings. But what about all of the additional communication that typically goes into a property sale?
Issue #3 – It Doesn’t Change the Basic Sales Process
Virtual tours may help developers to attract investment. But do they provide enough of a change to the simpler process of selling a house?
In the current model, the process is quite simple. A buyer finds a property and checks out the information related to it. They then contact the real estate agent and arrange a viewing. From there, they decide whether to put an offer in.
A virtual tour may eliminate the need for a physical viewing. But it’s still the same process. A buyer who wouldn’t have liked the property when visiting it will also not like its virtual representation.
That leads to the key question:
Will VR help developers and agents to sell more homes?
If it doesn’t, there’s no need for the property industry as a whole to adopt it. VR may still find its place, particularly for developers who want to pitch to investors. But it may not find wider use if it doesn’t lead to more sales.
Issue #4 – Problems for Universities
Constantly evolving technology presents issues for universities and schools. Every time another technology emerges, they have to decide whether to add it to the curricula.
If they do and the technology doesn’t catch on, they’ll have wasted their students’ time. If they don’t and the technology does catch on, they’ll have left students ill-equipped to enter the industry.
This major choice is enough of a problem for universities. But there are other problems that emerge from it.
Let’s assume that you decide to start teaching VR as part of your digital design courses. This means that you have to invest in all of the hardware and software required to teach it. That’s a huge expense.
On top of that, tutors also have to learn how to use the technology. You can’t teach something that you don’t understand. As a result, universities have to invest in training for tutors.
Then there are the more practical issues. Where does VR fit into the curriculum? What does it replace? Should you dedicate entire courses to it? How do you judge student competency?
VR presents issues for universities because it leaves them with decisions to make. Getting these decisions wrong can have a huge effect on the quality of teaching they provide to students.
As you can see, virtual reality in property development may not be the golden goose that some think it to be. There are several issues that may serve as barriers to adoption. Opposition from real estate agents could prevent the wide-scale use of the technology. There are also costs involved that could do the same. All of this combines with a lack of tangible proof that VR actually helps developers to sell properties.
On an educational level, these unanswered questions present problems of their own. Key among these is how universities should adapt to the rise of VR, should it become the industry standard.
Thankfully, that’s something that Archistar Academy can help with. We offer a wide range of digital design courses that help to take much of the burden off the shoulders of university tutors. We’ve designed our courses to help your students develop the key competencies that prepare them for the future of the industry. Moreover, we remove the need for tutors to develop expertise in every software package that becomes available.
This means that we’re here to help if you’re thinking of adding VR training to your courses. Get in touch with Archistar Academy today to find out what we can do for you.
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Posted on 10 Dec 2018