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June 19, 2024
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Impact of artificial intelligence on real estate – Digital Transformation News

By Jerry Kingsley

Artificial Intelligence (AI) is an interdisciplinary field that involves the application of intelligent technology capable of performing tasks with minimal human intervention. The potential for AI to revolutionize businesses, industries, and society has been steadily growing for many years. However, recent advancements have brought AI from a specialized area of study to the forefront of mainstream adoption. The proficiency of AI in various domains, including writing, drawing, coding, and composing, has prompted corporate leaders to carefully evaluate the opportunities and risks that AI presents for their future.

In the commercial real estate sector, it is evident that embracing AI strategically could lead to transformative changes. According to JLL’s 2023 Global Real Estate Technology Survey, AI and generative AI were ranked among the top three technologies expected to have the most significant impact on real estate over the next three years, as indicated by investors, developers, and corporate occupiers. However, there is still a lack of clarity regarding the specific implications of AI for the industry. Respondents displayed the least understanding of AI and generative AI compared to other surveyed technologies such as blockchain, virtual reality, and robotics. AI can be utilized in various areas within commercial real estate, including intelligent property search and recommendation, predictive analysis for market analysis, property management and maintenance, and enhanced marketing and advertising. Despite this uncertainty, industry leaders in real estate are keenly aware of the imminent changes and are actively exploring ways to harness AI’s transformative possibilities.

The integration of AI in the real estate market signifies a significant transformation in the way real estate is acquired, managed, and analysed. Professionals within the real estate industry not only acknowledge the advantages and possibilities that AI technologies offer but also understand the significance of leveraging data to achieve profitable outcomes. AI tools facilitate more informed decision-making by extracting valuable insights from patterns in data through machine learning techniques. In the realm of real estate, artificial intelligence has a wide range of applications, including investment analytics, streamlining processes, and enhancing customer experiences. Machine learning assists agents in efficiently addressing customer inquiries, while brokerages optimize their listings. A few examples of the benefits that we will be able to see include improved sales process, lead generation, and data collection. Agents and brokers may make better judgments and enhance their marketing and customer service strategies by using AI to gather data on consumer preferences, behaviour, and feedback. AI-powered automated valuation models compete with traditional appraisers, and mortgage lenders utilize AI for risk assessment calculations. Additionally, developers rely on AI platforms for predictive analytics to provide location recommendations based on detailed local zoning regulations, market trends, pricing and demand which allows them to make more informed decisions.

AI empowers experts within the real estate industry to make well-founded decisions by extracting insights from the vast amount of real estate data available. By analysing historical sales data, market trends, and other critical factors, AI algorithms provide valuable insights that shape data-driven strategies, from identifying potential investment opportunities to establishing competitive property prices. 

The incorporation of AI in real estate opens up avenues for success by harnessing the potential of data, leading to improved productivity, enhanced customer service, and more informed decision-making processes. As this technology continues to develop, the real estate sector can expect numerous opportunities for growth and a way to potentially revolutionise the sector on the whole. 

The author is head, strategic consulting, value and risk advisory India, city lead capital markets, Chennai

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