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Showcasing spaces that don't yet exist is an increasingly popular way to sell high-end homes across the world.
One of the tallest residential skyscrapers in the UK is under construction. Come 2021, London's South Quay Plaza will comprise 888 apartments in 68-storey and 36-storey tower blocks. Alongside the requisite marketing arsenal of brochures and floorplans to woo purchasers, they will be able to explore sample apartments in high-definition, virtual reality.
"Virtual reality technology is allowing realtors to bring homes to life for potential buyers," says Nick Whitten, Associate Director, UK Research at JLL. "Rather than trying to persuade someone of the fantastic top-floor views, you can show them."
Take Seattle condominium high-rise, The Luma. VR tours created by San Francisco virtual experience developer Studio216 started last summer when real-world construction had barely begun. Interested buyers would strap on Oculus Rift headsets connected to powerful computers in the sales office, then walk through simulated units and peer out of virtual windows at accurate views captured by drones.
Fuelling interest among overseas investors
Sotheby's International Realty has been experimenting with VR to sell multimillion-dollar properties in Los Angeles, the Hamptons and New York City.
Using the Samsung Gear VR, a lower-cost headset powered by compatible Samsung phones, prospective buyers can explore 360-degree, immersive environments. A realtor also wearing the headset can join the tour from wherever they are, see what the buyer is focusing on, and offer extra detail over an audio link.
"Down the line, there's nothing to say why an agent couldn't sit in London and conduct tours of properties in Hong Kong, Vancouver and San Francisco," Whitten says.
For off-plan investors who are considering putting funds into a building that doesn't exist yet, virtual reality tours could become an indispensable part of their investment process.
"In its early stages, VR technology is great for piquing the interest of overseas investors looking at properties in markets such as London, New York City or Sydney – places that attract higher levels of outside market investment," says Whitten. "The majority of people still need something tactile to purchase a property."
The virtues of virtual
ZipMatch, a Philippines-based real estate marketplace, says it is the first company in Southeast Asia to undertake VR home-viewing on a large scale. It shows virtual spaces in metropolitan Manila, as well as provinces Cebu, Davao, and Bacolod, where heavy traffic means shuttling between house viewings may take hours.
"VR could help homebuyers save time and money by reducing the number of physical trips to potential locations," says Hannah Pham, Research Analyst for JLL Singapore. Agents can similarly avoid long travel times and increase the number of showings in a day, as well as connect with prospective buyers from further afield.
Developers, in turn, can make a visually compelling case for buildings under construction. "Virtual reality gives buyers an extra route to understand what a property is all about," Whitten says.
Take StartVR's tours of the Sydney apartment complex EDGE28, which use architectural renderings and drone footage of views at different times of day for a sleek, photo-realistic experience, coupled with the sound of wind and street noise for extra verisimilitude. A "finishes" photo gallery allows close-up inspection of fixtures.
Software is also available that layers data onto flatplans and photos, helping buyers to imagine their future homes. Augment is a platform for companies to build apps where users can digitally customise built and simulated spaces – from changing paint colours to removing entire walls.
"Augmented reality apps can be of great benefit to DIY conversions, currently one of the biggest construction sectors," Whitten says.
Down the line, real estate marketplaces like Zillow or Rightmove could use their gargantuan databases on house prices and interior details to build augmented reality apps where customers can point their phones down the road to glean additional information where they stand.
"The bottom line is using data in innovative ways to enhance the home-buying experience," Whitten says.
The cost of such technology has so far restricted its use in the market. "The application of VR technology has been largely limited to the marketing of luxury properties and large-scale developments," says Pham.
In Singapore, even though realtors commonly offer 360-degree tours, these are often viewed on tablets – not headsets, nor via the latest VR tech.
Whitten estimates a virtual rendering costs £20,000-£30,000 for an apartment tower. "It's not a lot of money compared to the cost of a show home – but it can't replace the show home yet," he says. "It's an added-value exercise, rather than a crucial part of the sales process."
Meanwhile, the Oculus Rift, HTC Vive and soon-to-launch Sony PlayStation VR cost hundreds of dollars and require tethering to powerful – and expensive – computers.
While the $99 Samsung Gear VR (or Google's £15 Cardboard, a folding viewer made of, yes, cardboard that works with smartphones running an associated app) could be a breakthrough moment for VR, there hasn't so far been the VR content to make it a must-have for most. "At this stage, VR tours represent only the first 10 percent of the sales journey," Whitten says.
Seeing the future
One report from Greenlight VR and Road to VR predicts there will be 2 million (non-cardboard) VR headsets in use by the end of 2016 – and 36.9 million by 2020. "We're not too far off a critical mass and advancement in technology that would catalyse mainstream adoption – and what you can imagine VR could do is exciting," Whitten says.
Think VR headsets linked to walking pads that allow users to stride virtually around a prospective home; wearable exoskeletons that can impart pressure and feeling; and smell sensors for the aroma of baking bread and fresh flowers.
As VR technology matures and engages ever more of our senses, virtual spaces have the potential to feel as real as brick-and-mortar places – and in a not too hazy future, a buyer in London could just sink into their couch and open the door of a Miami duplex.
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LL (NYSE: JLL) is a leading professional services firm that specializes in real estate and investment management. A Fortune 500 company, JLL helps real estate owners, occupiers and investors achieve their business ambitions. In 2016, JLL had revenue of $6.8 billion and fee revenue of $5.8 billion and, on behalf of clients, managed 4.4 billion square feet, or 409 million square meters, and completed sales acquisitions and finance transactions of approximately $136 billion. At year-end 2016, JLL had nearly 300 corporate offices, operations in over 80 countries and a global workforce of more than 77,000. As of December 31, 2016, LaSalle Investment Management has $60.1 billion of real estate under asset management. JLL is the brand name, and a registered trademark, of Jones Lang LaSalle Incorporated. For further information, visit www.jll.com.
JLL has over 50 years of experience in Asia Pacific, with 36,000 employees operating in 94 offices in 16 countries across the region. The firm won the 'World's Best' and 'Best in Asia Pacific' International Property Consultancy at the International Property Awards in 2016 and was named number one real estate investment advisory firm in Asia Pacific for the fifth consecutive year by Real Capital Analytics. www.ap.jll.com.
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