Artificial Intelligence (AI) in Real Estate
What is Artificial Intelligence (AI) in Real Estate?
AI technology refers to sophisticated algorithms and data analytics to make accurate predictions about future scenarios. What makes the use of this technology beneficial is the ability of a given piece of software to analyse and interpret that data to the point where it can then automate processes in more intelligent, creative and flexible ways. In the property market, this kind of advancement has yet to fully take place. However, artificial intelligence will re-design the property industry in the near future. In fact, numerous changes are currently underway: residential real estate agencies have now shifted to electronic platforms, artificial process optimisation and robotics are becoming increasingly important in the construction sector, while smart buildings with advanced building control are now prevalent in the field of facility management (Hajnal, 2020).
The real estate AI business is growing with new companies entering the industry at a high pace - from American Bracelet & Skyline AI to German Architrave GmbH and English LandTech. With more startups emerging in the sector, it is worth exploring new career opportunities being created, which we will discuss in more detail later in the article.
How is AI changing the Real Estate industry?
The real estate industry is experiencing a digital revolution that is affecting not only its nature in terms of the markets and work environments but is also influencing its progress. This tech disruption is closely linked with the emergence of a phenomenon known as PropTech. According to Siniak et al (2020), « PropTech is characterised by the massive implementation of emerging technology such as home matching tools, drones, virtual reality, building information modelling (BIM), data analytics tools, artificial intelligence (AI), Internet of Things (IoT) and blockchain, smart contracts, crowdfunding in the real estate sector, fintech related to real estate, smart cities, regions, smart homes and shared economy ». The utilisation of these technologies will not only improve the efficiency of operational tasks but also change decision-making processes. By recognising relationships and patterns in large data sets, the effects of possible future scenarios can be examined more closely.
By means of so-called Smart Contracts, relevant information from contracts and documents can be extracted and used meaningfully. This will increase the transaction speed and reduce the search and sorting effort. Accordingly, algorithms can check virtual data rooms for completeness or, in the case of a sufficiently solid database, identify suitable investment targets according to the portfolio matrix. In asset management, the possible use of artificial intelligence ranges from personalised customer contracts through contract management to intelligent building services management. In addition, property valuation, property management and facility management will increasingly change. Possible applications in these areas include simplified collaboration, peer-to-peer transactions, supply chain management and data management (PwC, 2018).
Types of AI innovation in Real Estate
- Advanced property analysis
AI-powered software can be a solution for improving the ability of a real estate business to provide accurate, comprehensive information about property to clients.
Skyline AI uses proprietary AI to collect data points from a variety of sources and analyses past transactions to help get a sense of which neighbourhoods are up-and-coming and which are heading for a potential downturn. By analysing property owner behaviour, this tool can also help commercial real estate investors find distressed properties, off-market deals, and opportunities for value creation.
2. Real estate brokerage
The residential real estate market is the field where AI has made the most spectacular progress. This section of the real estate market simply moved to virtual reality and numerous sites are increasingly replacing real estate agents’ jobs by structuring, filtering and introducing supply in a variety of ways. Machine-learning interfaces and chatbots are already benefiting a lot of businesses by collecting customer data and helping with improving lead generation and content marketing (Hajnal, 2020).
Springbok AI help organisations of all kinds and sizes get the most out of Artificial Intelligence by optimising their processes and/or exploring new growth opportunities with them. Whether organisations have no prior knowledge of the technology or already have resources dedicated to it, Springbok can help at every step of a company’s journey with AI.
3. Property valuation
The spreading of so-called non-traditional methods has been a feature of property valuation’s evolution over the last decade. Some of these methods include hedonic valuation, the use of nervous system networks and contingent valuation. Since AI has the ability to analyse patterns in vast amounts of data, it can be used to make reasonable predictions of the future value of a property. The methodologies, often described as «mass appraisal», are focused on the systematic and automatic analysis of broad databases, with self-learning models supporting them. The number of property attributes or market data points can exceed tens of thousands, which is definitely a kind of analysis no human analyst or market research is capable of conducting (Hajnal, 2020).
Enodo is an automated underwriting platform for multifamily real estate. Its machine learning capabilities can help clients calculate market rents, find comparable properties, and identify lucrative investment opportunities. For those considering doing renovations, it can also help estimate the future value of any added amenities.
4. Property Management
Real estate businesses can track rental and property listings, requests for maintenance, tenant applications, and other information with AI software. These results of the tracking can help to identify the most common maintenance issues, tenant characteristics and preferences, price trends in certain areas, and seasonal availability.
Proportunity offers a service similar to that of Skyline AI for those in the residential real estate industry. Operating in 50 markets, this tool gathers property value data, crime rates, transportation data, and school district ratings to fuel its automated valuation model and predict which properties and neighbourhoods will give you the highest returns.
Impact of AI on real estate recruitment
Although digital transformation in the real estate sector is still in the early adoption stage, the industry is nonetheless facing seismic shift (Piazolo et al, 2020). The implementation of technologies such as data analytics, artificial intelligence, machine learning and robotics are changing operations. Highly administrative roles and tasks that need a human effort (property agents for example) are becoming largely obsolete. This statement underlines that a task-based approach demonstrates how high the percentage of jobs is concerned: almost one in two jobs in the property sector.
However, thanks to the emergence of new technologies, new jobs will be created in the real estate sector as well. For example, the real estate industry has reaped tremendous benefits and development from data analytics and photo capturing technologies. As mentioned, digitisation is also driving employment and many new jobs will emerge as a result.
Some of the AI real estate companies currently recruiting are:
- LandTech, the UK’s fastest-growing Proptech company. Simplifying planning research and giving planners and architects all the information they need on a single platform. LandTech is currently looking for a Senior Software Engineer, who will be working in a cross-functional product development team, reporting to the Head Of Engineering.
- Architrave GmbH leads the digital transformation in Real Estate Management. They use high-level automation through Artificial Intelligence, efficient workflows and data-based decisions that significantly increase productivity with a fast ROI. Advantages other industries are now also benefiting from. Architrave is currently looking for a Senior JavaScript Engineer as well as a Customer Support Agent.
- Wayhome offers a completely new way for people to get on the housing ladder without needing to take out a mortgage. Homeowners get capital to buy a home worth up to eight times their income with only a 5% deposit. The open positions are in Tech (e.g. Senior Frontend developer) and Engineering (e.g. Senior Devops/Secops Engineer).
- Unity Technologies is the world’s leading platform for creating and operating real-time 3D (RT3D) content. Unity’s platform provides a comprehensive set of software solutions to create, run and monetise interactive, real-time 2D and 3D content for mobile phones, tablets, PCs, consoles, and augmented and virtual reality devices. Unity is currently looking for Senior Data Scientist, Software Engineer…
- Beyond Pricing is the #1 Revenue Management Platform for short-term rental owners and managers to acquire, keep, and grow revenue. Beyond Pricing are always on the lookout for talented developers and engineers.
- Localize is the world’s first real estate marketplace designed to level the playing field for homebuyers and renters — arming them with information once reserved only for savvy real estate pros. Localize is now hiring for Senior Data Scientist, Backend Engineer, Senior Business Analyst, and Client Success Manager.
It is important to mention that the IT positions require substantial previous experience, companies expect candidates to demonstrate varied knowledge of programming languages and a relatively impressive record of projects. On the Business Development side, positions mainly target senior-level professionals as the startups are expanding and therefore are seeking experienced leaders who would take the business to the new level, this is particularly true for the companies going global. Finance-related positions are quite rare in the sector with nearly all the positions centred around companies focused on financial solutions for homeowners.
Find the latest job opportunities in the PropTech industry on our website. We combine new technologies and human expertise to provide our clients and candidates with the best quality of services.
Sustainability & Emerging Technologies
Sustainability & emerging technologies: a revolution in the real estate industry
The push towards sustainable living has become tremendously prominent in the last decade. Not just amongst activists, but support for the cause has extended its roots into business models of startups, and investment decisions made by Venture Capitalists (VCs). New players are constantly emerging in the fight to combat climate risk by providing sustainable living alternatives, and the growing number of Proptech companies across the globe are at the heart of this change.
Today's real estate industry is more dynamic than ever, and the need to adapt is imperative. The Proptech sector has been and will continue to be a catalyst in propelling real estate to the next level. To further aid the growing trend of sustainability within Proptech, sourcing the right experts and creating a culture to foster awareness and education about sustainable opportunities in property is vital in keeping the industry alive. As we now transition into the post-pandemic phase, we need to re-imagine the world of real estate in 2020 and beyond. With these efforts, Proptech can be navigated as a powerful tool to work in tandem with the changes happening in the world, instead of against it.
Sustainable real estate- the way forward
"Sustainable development calls for concerted efforts towards building an inclusive, sustainable and resilient future for people and planet."- The United Nations (UN)
With its densely populated nature cities around the world have contributed to at least 75% of global greenhouse gas emissions (CO2). According to the C40/Arup Deadline 2020 report, energy usage in buildings accounts for more than 50% of total city emissions. High levels of emissions can be attributed to the inefficient management of buildings that come from the heating, cooling and electricity usage. The World Green Building Association (WGBA) particularly notes that ''upfront carbon- emissions released before a building enters its use phase- accounts for approximately 50% of the entire carbon footprint for new construction occurring in the next 3o years".
Buildings no matter what form, are here to stay and working towards creating and maintaining a resilient built environment is important. It is crucial to decarbonise buildings by adopting energy-saving and clean energy strategies to meet the goals of the Paris Agreement.
In the light of this, whilst we cannot completely eradicate the negative consequences of climate change, initiatives have come forward to encourage and inspire developers to innovate and improve how development processes are carried out from manufacturing, transportation of materials for construction and end of life phases of all built assets. Notably, BREEAM is a globally recognised method to assess the level of sustainability of new developments against a set of standards established to measure the environmental performance of buildings. A key part of BREEAM is its focus on sustainable values for built assets in three areas:
1) Reduction of carbon emissions
2) Low impact & high-quality design
3) Adaptability to climate change
4) Protection of ecological value and biodiversity
Proptech as a solution
Opportunities to take sustainability to greater heights are immense and the PropTech world stands to be a key player in this realm. The UK Proptech Association also highlights that COVID-19 has brought about a change in real estate where Proptech has prevailed in comparison to traditional real estate.
Investor appetite in the RE industry is also being influenced by climate change as we witness the general tightening of environmental, social and corporate governance (ESG) requirements. A 2020 PwC Emerging Real Estate Trends Report echoes similar sentiments, where "shareholders enquiring about the environmental impact of buildings has gone up five-fold". Clearly, investors are drawn to seek out solution-based companies.
Core values of these companies can be strengthened through building capacity from within by hiring talent to push forward their environment and social responsibility goals. At the end of the day, the people are the pillars of an organisation and embedding a strong culture of innovation amongst individuals will provide a comparative advantage.
When considering the issues that sustainable Proptech companies aim to solve, we can take a look at particular technologies that have been implemented.
Firstly, blockchain technology is a receiving interest amongst property professionals for smart contracts. To put it simply, smart contracts allow for the digital execution of deeds over a distributed ledger platform. Leaxcoin, for instance, is a global currency using Ethereum to manage real estate transactions from purchasing real estate to property registry. All of which can be done online! This can effectively reduce paper usage as well as speed up transaction processes which can then translate to cost-saving measures.
The Internet of Things (IoT) is another tool that is growing in popularity to incorporate sustainability into a building after it is built. For example, Google Nest is a proptech solution that is specifically consumer-focused on creating an energy-efficient home. The smart thermostat monitors your activity and builds a schedule around this data through sensors.
CarbonCure, a Canadian startup has developed a system to contain carbon dioxide within the cement used for buildings. As CO2 is injected into the cement during the mixing stage, minerals are formed to improve the compressive strength of the concrete. With stronger concrete, concrete producers can manufacture high-quality building materials and but also use less cement. This not only reduces emissions but also save costs due to lower quantities of cement being used.
When it comes to building and planning, VU.CITY uses 3D modelling techniques and data analytics, allowing city planners and developers to create models and immediately test their proposals within an accurate context. The platform essentially helps people visualise, analyse and collaborate to make better decisions for future built environments.
Skills and technology are complementary
We can agree that in an increasingly digitised world, many operations are becoming automated. It saves money, time, energy and the environment. However, technology is certainly not a substitute for human interaction. A candidate with the necessary core skills to understand, deploy & manage the technology will be a key differentiating factor generating problem-solving strategies.
For clean energy companies such as Greenbird and Arbnco, data is at the core in creating sustainable building technologies and smart cities. Implementing solutions based around the needs of customers are important for these companies and this is where software developers play a major role. Developers with a solid foundation in programming languages like Java and the ability to build backend services in a cloud-based environment are very much desired skills and are always in demand.
Whilst a good understanding of technology is needed, the changing landscape of real estate has prompted the need for a diverse skill set. Particularly within the aspects of sustainability, Proptech solutions need to be implemented at a strategic level and the robustness of this can be determined by hiring Innovation and Sustainability directors, as some large real estate management firms have done. These roles will be crucial and keeping up to date with the progression of the industry in the digital age and what tools can be used to examine the customer experience and the value extracted from real estate.
Overall, from an employment perspective, a high proportion of job roles within Proptech start-ups have remained live despite the uncertainties over the COVID-19 pandemic. Over the next few years, we can anticipate higher demand for specialists who will bring fresh knowledge and expertise to the forefront of the sustainable Proptech business.
Looking ahead...
Sustainable Proptech is a growing sector, and there is no denying that talent & expertise from other industries will be seeking out new opportunities in high-growth startup environments.
Human needs are constantly changing and Proptech companies offering sustainable solutions will place them in an advantageous position. But, the key difference here is the ability of these companies in carrying out strategic talent acquisition. This will help to build a talent pool that will support the values and growth of their business over time. Proptech startups must also ask themselves whether they are doing enough to develop a culture that people will want to be a part of in the long term?
The real estate industry is being shaken up and companies need to remain agile and get up to speed with current technologies in this environment. Proptech companies planning for the future should work towards attracting and retaining highly skilled experts as they venture into an age of embracing digital transformation.
