Is real estate becoming a data-powered industry?
Fresh cookies on a well-polished kitchen counter might help realtors close a deal. AI (artificial intelligence) can’t compete in that regard, but a new wave of ‘PropTech’ (property technology) is promising to transform real estate as we know it.
According to research by the Canada-based Altus Group, the real estate industry is on the verge of realizing meaningful returns from digital investments. And while PropTech has arguably been around for the last decade — consumers now expect filters and interactive maps, as standard, for example — the rising adoption of cloud computing and AI is taking things to the next level.
The survey turned to 400 C-Suite executives in the commercial real estate (CRE) industry to explore how the sector is adapting to the age of digital. It found that 75 percent of CRE leaders believe that hyper-automation will replace human roles. At the same time, another 71 percent believe that emerging applications of AI technology will shift the paradigm of real estate agents towards taking higher-value tasks.
AI technology is now being applied across all areas of the industry — from construction to financing — but the impact of predictive analytics, in particular, is drawing much of the attention. Here, automated valuation (AV) models can make pricing decisions based on structural characteristics and geological factors with little or zero human intervention, or be used to predict default rates for commercial real estate loans.
But while concerns clearly abound among the realty community when it comes to the entrance of automation, such technological advancements are more likely to create new opportunities in the real estate market than lead to workforce redundancies.
For instance, with the industry rapidly recognizing the value of big data in uncovering new trends and hidden insights, investing the funds to mine the data is one step, but recruiting a team of ‘miners’ and other data specialists will also be necessary. As insights are churned out by machines, human agents are irreplaceable in closing the customer journey loop. Instead, the mass adoption of automation will drive realtors to develop digital skills and leverage technology to their advantage.
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Data is being made available from more sources than ever before, and that includes insights generated by Internet of Things (IoT) technology. Smart devices and sensors are collecting and transmitting information in real-time.
Going beyond alerting owners or property agents of potential problems, more advanced systems could enable predictive maintenance. In the near future, this new wealth of data could be packaged to the consumer in value-add services. Interested buyers could download a comprehensive copy of a home’s maintenance history, for example gathered from smart devices connected to the electrics, HVAC, and plumbing.
Big changes are coming and the real estate market is poised to benefit from technological advancements. Instead of eliminating jobs, new trends are set to encourage the workforce to enhance their digital skills and utilize digital solutions to optimize their workflow, bringing forward a new set of opportunities to the market as a whole.