10 Ways AI Will Transform the Real Estate Sector
Real estate is a complex sector involving many different stakeholders, functions, objectives and challenges. Anyone who has tried renting a property will know the experience is not always straight forward, and things only become more challenging when the goal is to build a new building. Fortunately, the sector is rapidly evolving as technology finds new ways to transform the various areas and improve the experience and value for everyone involved.
Real estate is a part of all our lives, so it’s useful to understand some of the way that AI is changing it for the better. Let's have a look at a few examples of AI in real estate.
Guide smart investment in real estate
Investing in real estate is a big decision requiring careful consideration of many different factors. People new to the real estate game and making their first purchase or even second investment are often overwhelmed with the amount of information to be processed and the number of small decisions that must be made.
AI can help strip complexity from this process by analysing the available data on a property and creating a clear picture of the opportunity with regards to features such as energy efficiency, safety of an area, recent property purchases in the area, the sales price and even using trend data and data on local investment and development to predict future valuation.
Predict property sales value
The valuation of a property is based on several factors, such as the size and location of a property, number of rooms and bathrooms, recency of renovation and proximity to amenities. However, a luxury, exceptional or unconventional homes which defy the market norms. This creates a challenge of how to objectively value the property to avoid over or under-valuation.
The ability of AI to detect patterns could be the key to this challenge. By working with historical data of luxury and premium properties with similar characteristics, agents can accurately gauge a fair selling price.
Property recommendation based on customer preferences
Many customers spend hours trawling property websites online and entire weekends visiting properties that don’t fit their needs. Combined with a hyper-competitive market that sees great properties sold days after they go on the market, it can be very difficult to find and buy the right property. This also creates a challenge for real estate agents who may invest time and energy coordinating viewings with prospective buyers for a property that doesn’t fit their needs.
Recommendation engines are a powerful tool that can help overcome this challenge. By analysing prospective buyers desired specifications (e.g., location, cost, size etc.) agents can personalize property recommendations but also highlight the criteria the property matches that demonstrates it’s a good fit. This helps reduce the search burden on customers, helps them find the right property and can help estate agents to increase their sales.
Enable smarter real estate management
Estate agents have a highly demanding job and must deal with multiple enquiring, such as rental and property listings, tenant enquiries, maintenance, sales and much more. In addition, agents are challenged to constantly stay connected and provide insight into rental and sales trends across a large geographic area. AI can assist with automating many of the highly repetitive and manual but nonetheless critical tasks that agents are meant to perform, such as automating appointment setting, managing maintenance requests and even providing market intelligence by identifying trends across a certain geographic area.
Streamline document processing and due diligence
Real estate agents, and sometimes other stakeholders such as banks and lawyers, are required to complete a time consuming and repetitive due diligence procedure to facilitate the rental of a property. This process is even more complicated in commercial real estate, which requires a review of the organization’s financial credentials rather than an individual. Completing this due diligence requires many back-office processes to facilitate the request, submission and verification of documents (e.g., proof of identity, evidence of income, mortgage offer, contracts etc.) across multiple party, which can be a highly repetitive process and one that can have significant consequences in terms of delays or applications being refused. Intelligent process automation can help to simplify this process, reduce human-error and provide a better experience for all the stakeholders involved.
Facilitate post-construction maintenance
A construction project doesn’t end when the building is completed or even sold. Post completion, the project transitions into a stage of maintenance and management. AI and IoT can support post construction maintenance by gathering multiple pieces of information about the structure from sensors or photographs (e.g., drones), AI can provide valuable insight into functioning and of a building, identify causes of concern quickly and even proactively recommend preventative maintenance.
Address labor shortages with smart construction
A shortage of skilled labor is an endemic problem in the construction sector. The consequence of this is project delays, inefficiency and poor productivity. Fortunately, there are several ways AI can assist with project management to improve efficiency, productivity and delivery to budget. For example, AI tools can assess progress and identify potential issues such as material sourcing or deviations from the schedule and inform proactive measures to minimize project disruption. In the future, we will likely see a rise of AI combined with robotics to power intelligent autonomous agents can be used to automate highly physical tasks such as concrete pouring or bulldozer and forklift driving. For a sector as diverse as real estate and construction, there are many opportunities for AI to streamline and automate many different tasks.
Empower automation to design better buildings faster
Take a moment to think about the physical, digital and virtual worlds: design is everywhere. The importance of design is particularly important in real estate, with people being attracted not only to aesthetic beauty but functional design. Architects, designers and engineers are increasingly relying on intelligent tools to help plan, design and build projects faster and cheaper without sacrificing form or function. AI has a powerful role to play in creating alignment and consistency across different functions and groups of stakeholders by identifying and helping avoid conflicts between conflicting designs and avoiding rework. AI can even proactively generate design concepts based on specified constraints, such as the design automation platform Daisy AI, which automates the design of timber floorplans for residential builds.
Identify the best development locations
The starting point for many construction projects is developing an understanding the land that must be developed, as this will influence the project plan. A thorough assessment must be completed addressing numerous questions, such as risk of landslides or flooding or the type of material that forms the foundation, environmental impact assessment and evaluation of the scope of residential and commercial development. This is a highly manual tasks that involves a combination of on-site surveyance and other available data. AI can help expedite this process by assessing similar project and areas to assess suitability of sites under different capacity scenarios. This can help to give developers a wider choice of sites to develop and make more informed decisions as well as help councils and governments achieve their housing targets more easily and cost effectively.
Prevents budget overruns
Construction projects are frequently prone to poor forecasting and overspend. Almost all completed construction projects are over budget, often due to unforeseen circumstances. This can lead to a funding shortfall, project delays, project abandonment and even companies becoming insolvent. AI can help solve this problem through superior planning and alerting project managers to problems as they arise. AI allows project managers and engineers to react immediately and in time to any current or future problems and even save on the planned budget. AI can help save time, mitigate risk and prevent budget over runs.
Construction is an exciting space for AI and promises to create extensive value for all stakeholders involved. As the industry becomes increasingly digitalized and the quantity and quality of the data grows, you can expect to see a number of these use-cases transforming the construction sector to the benefit of everyone.
Written by Augustin Baduel