Is the Prop-Tech revolution in Germany a myth?

Is the Prop-Tech revolution really happening in Germany? A recent conference in Hamburg, jointly organised by academic institutions EBS Real Estate Management Institute and the IMMOEBS e.V., asked just how much is changing in Germany's drive towards digitalisation in the real estate industry.

Despite all the hype surrounding what is being identified as a Megatrend, the more than 50 real estate experts who'd gathered in the Hamburg office of lawyers Freshfields Bruckhaus Derringer seemed less than convinced that the new prop-tech interruptors were truly a driving force for revolution in the industry.

The evergreen Dr. Thomas Beyerle of Catella Property Valuation said that the digitalisation of the real estate industry was striding continually forwards, but any real change could best be described as "revolution-lite". We are seeing somewhat of a prop-tech boom in Germany, he said, but "There's a lot more talk about the opportunities provided by digitalisation than real concrete products."

A new study by German job search engine Joblift throws an interesting light on where companies are really looking to fill jobs, despite all the hype about prop-techs and digitalisation in the still somewhat conservative real estate industry.

Joblift have analysed the jobs advertised related to real estate over the past two years in German media. They found that 4,678 jobs were from prop-techs, while the "classical" real estate industry published ads for 62,432 positions. Of these jobs, property internet portals accounted for 24% of the vacancies, followed by short-term rental platforms such as AirBnB at 21% of ads, and in third place broker platforms such as McMakler with about 11%.

Joblift's study shows that start-up mecca Berlin accounted for 41% of the prop-tech ads, followed by Berlin at 29%. These two cities make up 36% of the 'classical' real estate jobs advertised, with North-Rhine Westphalia at 18%.

Classical real estate jobs, seeking candidates with business backgrounds (11%), broker experience (8%) and office administration (6%), required in 67% of cases vocational training (Berufsausbildung), and in 33% a university degree. Prop-techs speicfied a Berufsausbilding in 27% of cases, and a university degree for 35% of advertised jobs.

Analysing the ads published, says Joblift, shows that the focus of prop-techs is still very much on optimising traditional processes, rather than pursuing radical break-throughs. Such fields as developing software for virtual site or building visits impacted only 7% of job ads placed by companies with so-called 'innovative' business models, while only 16% of ads could be said to be seeking personnel to address identified 'Megatrends'.

The terms "Big Data" was mentioned 302 time isn ads over the past two years, "Cloud-based Applications" appeared 263 times, and "Virtual Reality" was identified in ad text 122 time. Other technologies such as "Blockchain" merited 45 mentions, while "Artificial Intelligence" as a term appeared only eight times over the two-year period.

Joblift goes so far as to conclude that the stable German economic environment is actually lowering the pressure in the industry to innovate, and that companies are in big danger of losing out to more fleet-footed competitors if they don't innovate and adapt to market forces sooner. German companies need to sharpen up, is the clear message.