How AI tools can streamline the real estate market
By Betty.Muindi, March 8, 2024Lately, the property market has witnessed some significant advances as more developers turn to technologies to improve the quality of the built environment, and while at it, cutting time and costs.
One of the most disruptive trends real estate companies have invested in is the use of Artificial Intelligence (AI) to completely revolutionise the modern construction site.
According to The Business Research Company’s report, the AI in real estate market size is expected to reach Sh32.5 trillion (US$226 billion) in 2024, showing a Compound Annual Growth Rate (CAGR) of 37.4 per cent compared to the previous year.
Another report by multinational accounting and auditing firm PricewaterhouseCoopers (PwC) says AI could add Sh2.2quadrillion (US$15.7 trillion) to the global economy by 2030.
Improved performance in business and competitive advantage are the key drivers of accelerated AI adoption in the sector. In particular, businesses adopting custom real estate software equipped with AI algorithms can improve tasks, such as document management, market research, and marketing. AI tools can also be adopted in sites to monitor real-time interaction of construction workers and machines, give warnings about productivity challenges, arising safety issues, and other construction errors. Property investors, asset managers, and sellers also benefit by having their efficiency enhanced by AI tools.
Property appraisal and valuation
AI-powered software can automate property valuation and appraisal, one of the most critical yet time-consuming tasks in the real estate business. These systems can analyse large volumes of data collected across various sources, including those from property data collectors or news and social media to run comprehensive real estate valuations. Such data can, include age, size, capacity, and other physical characteristics of the property, property ownership data, such as foreclosure or historical mortgage rates and proximity to public transportation, hospitals, educational institutions, as well as other location-related features.
It can further analyse historical price dynamics, sales prices of similar properties, and other indicators related to the real estate market conditions, as well as location’s crime records, environmental conditions, noise level, and other external factors. Based on this information, an AI system can estimate the value of real estate much faster than human workers could do it manually. In addition, AI analysis allows real estate professionals to identify and assess particular property investment risks, helping make better business decisions later.
Real estate due diligence
Real estate due diligence is a very important part of any property transaction. It involves analysing and verifying property information, legal documents, financial records, and other relevant data to ensure that the property is legally and financially sound. According to a report by Jumia House, the real estate industry is a major contributor to the economy in Kenya, accounting for around eight per cent of the country’s Gross Domestic Product (GDP). AI-powered tools like ChatGPT can simplify and streamline this process by automatically extracting and analyzing data from various sources. This saves time and resources while ensuring accuracy and completeness. Furthermore, ChatGPT can help identify potential issues with a property that may not be immediately apparent, such as zoning violations or a claim or legal right against assets.
Market research
Market analysis is one of the most critical yet complex aspects of the real estate business. Real estate professionals have to monitor market dynamics and research any emerging trends carefully in order to forecast property demand and prices more accurately and make the right investment decisions in the future.
Implementing AI-based software equipped with analytics automation allows businesses to streamline market forecasting and enhance the forecasts’ accuracy. For example, such a solution could be equipped with predictive analytics to forecast future price dynamics in the real estate market.
Such an AI solution would be fuelled by historical data on global or local price changes, сoupled with currency fluctuation and gross domestic product data for a more comprehensive analysis. Based on this data, an analytics solution can provide recommendations to help real estate specialists improve their business strategies.
Marketing and advertising
Marketing is another essential business function that can be labourious and time-consuming if approached manually, and AI can help real estate companies streamline it. In particular, you can analyse competitors in the real estate market with AI. A marketing specialist can identify the key marketing channels the competitors use, understand which products and services they offer to customers, and highlight their pricing strategies. This data enables companies to refine their promotional methods and thus gain a competitive edge. Further, generative AI can help real estate specialists automate content creation, be it landing page text, promotional material design, or real estate listings published on social networks. AI also allows employees to automate and personalise promotional emails or text messages, which can result in improved sales rates. You can automate content distribution as well. For example, AI-powered social media marketing and advertising apps can distribute property listings across a company’s social networks, showing them to potential clients at the optimal time.
These apps can be integrated with many platforms, including Facebook, Twitter, or LinkedIn, which allows a company to publish content to multiple social networks simultaneously and increase its audience reach.