As the world moves into an age of information, those who can quantify and analyse large sets of data will always have the market edge over their competitors. Developments in technology are changing business models across major industries, and the transformative effect of technologies like artificial intelligence is driving change towards a more immersive and data-driven approach in various aspects of a business. Machine Learning (ML) and Artificial Intelligence (AI) have the power to revolutionise the real estate sector by making it more innovative and accessible to the larger public. As more and more processes become automated such as in-person appraisals, fillings, and closings, customers are seeking out more virtual options and digital solutions as they are hassle-free, provide transparency, and proper record management. Using AI, the real estate industry can acquire large amounts of data, predict market trends, improve home search experience, intensify lead generation, make efficient mortgage lending, and make real-time population analysis and predictions. Pakistan has also taken steps to regularise the technology and formed institutes for training future tech leaders. Therefore, Artificial Intelligence can revolutionise the real estate industry through its diverse field of application.
Artificial Intelligence (AI) sounds like a complex term, but it is really a remarkably simple process to understand. It is the ability of a digital computer to perform tasks commonly associated with intelligent beings. Computers can be programmed to carry out overly complex tasks such as finding proofs for mathematical theorems and playing chess. Using large sets of data and algorithms, the computer can train itself on certain parameters. Using these parameters to make judgements and predictions in similar cases, the computer can learn from new data sets without human intervention.
By recognising relationships and patterns in large data sets, the effects of possible future scenarios can be examined more closely. Subjective assessments are replaced by actual data and insights, resulting in sound and specific decisions. Modern AI techniques can only be used to automate a single task and are not able to attain a more general intelligence role, such as a human brain. As technology advances, previous benchmarks become outdated, such as recognising text from pictures, which is now considered a normal computer task. The applications for AI are endless and can be applied to a variety of industries and sectors. AI is currently being used in the healthcare industry, self-driving cars, financial fraud detection, and streamline trade and supply chain management. (Investopedia, 2021)
How can Artificial Intelligence Revolutionize Real Estate?
The real estate sector has always been slow in adopting innovations. However, many key players are now starting to realise the importance and potential of artificial intelligence in revolutionising the real estate industry. With the digitisation of services on a massive level, the number of data sources has now exponentially grown. Data on individual profiles and financial rankings is easily available for commercial use. Artificial intelligence (AI) can be trained to gather specific data related to real estate from diverse sources. These large sets of data can later be used to provide prescriptive and predictive analyses of the market which will exponentially increase the decision-making capacity of investors and finance companies associated with real estate.
By integrating the market, every piece of information extracted from any user-generated activity can be tracked and analysed to gain valuable insights. Artificial Intelligence can also be used for smarter real estate management. When it comes to large properties like offices and corporate buildings, underutilisation can take up a sufficient part of the budget. Poorly managed commercial space often leads to employee dissatisfaction. Using sensors and the Internet of Things (IoT) devices, AI can help real estate management professionals in effective utilisation of office space. Using Wifi and Internet of Things (IoT) devices, data can be analysed and turned into valuable insights. These insights can help managers make better decisions about office spaces. People can ‘talk’ to spaces using natural language recognition tools, and AI can ultimately better understand the user needs.
Searching for a new home is also a difficult task as a lot of different factors have to be taken into consideration before buying a new property. Traditional search engines have very few filters and often leave the buyer with many options to search from. This is where AI-based algorithms come into play. With AI-powered personalisation tools, the user’s preferences can be identified, and suggestions made accordingly. There are apps which can scan user photos to extract relevant information such as preferred type of floors, colour palettes, and construction materials. The system can also match the preferences with other similar people and create a unique portfolio for the buyer. ‘Predicting’ the future is perhaps the most prominent feature of Artificial Intelligence. The real estate industry is an industry of high stakes and high rewards, and the ability to predict outcomes is extremely useful. AI systems can investigate past data and trends in the market to provide an accurate prediction of the future market trend.
One of the most successful applications of AI has been in property investment. Traditional agents are accustomed to the standard model of evaluating property using covered area size, renovation quality, and other common features. But when it comes to the high-end real estate market, setting the right price often guarantees the success of a transaction. One problem which usually arises in the real estate market is that of lead generation. AI can be used to differentiate between customers with real intentions to buy a property and those who are browsing out of curiosity. Lastly, a big part of the real estate industry is mortgage lending, which is data-driven by definition. Bank statements, credit histories, proof of income, and many other papers are required for getting a shot at lending. Banks use OCR systems to read documents, but the drawback of such systems is that they cannot recognise unstructured documents. This is where AI can come into play and transform the amount of information which can be analysed before making a lending decision.
The real estate sector is complex. The data circulating within the sector is more so. However, this does not mean that the data is not useful or cannot be used effectively to make the sector more sustainable and user-friendly. Data often carries missed opportunities when not interpreted fully or accurately. Business intelligence is, therefore, a vital process that can provide useful insights into future market trends. It also makes the sale and purchase of property easier and provides for a better consumer experience in the mobile app world. Therefore, business intelligence can be used to revolutionize the real estate sector of Pakistan.
Artificial Intelligence (AI) and Real Estate in Pakistan
Pakistan has taken vital steps that make the application of technology more viable in the country. The Digital Pakistan policy aims to provide a digital ecosystem on the ground to enhance connectivity, improve digital infrastructure, increase digital skills investment, promote innovation and tech entrepreneurship. Under Pakistan Vision 2025 and the Digital policy of Pakistan 2018, the ICT industry size is targeted to reach $20 billion by 2025 (Prime Ministers Office Board of Investment). The local ecosystem in Pakistan is faring in terms of innovation. Companies like Graana are already setting high standards for PropTech based real estate ventures. The company’s success in establishing itself in a widely traditional market speaks volumes for the potential of PropTech in Pakistan. A large consumer base, along with a nascent digital entrepreneurship landscape and not many international players, makes Pakistan an excellent place for investments, said Riyad Abu Jaoudeh of Middle East Venture Partners (MEVP) (Jajja & Khan, 2018). Therefore, PropTech 3.0 is not new to the already booming market and investor interest. To educate students in Pakistan on new technologies, the President of Pakistan, Dr. Arif Alvi, launched the Presidential Initiative for Artificial Intelligence and Computing (PIAIC). The initiative provides free courses in Artificial Intelligence, Blockchain, Cloud computing, and the Internet of things.
The world is rapidly changing and adopting newer technologies. Artificial Intelligence (AI) is a new process through which large sets of data can be analysed and used to predict future outcomes or automate tasks. Although the real estate industry is slow to adopt new technologies, the benefits of AI in the real estate market are immense. The new technology has indeed revolutionised the real estate sector by bringing more information in decision making for investors and providing better property solutions to the buyer, seller, and builder.
Investopedia. (2021). Artificial Intelligence (AI). Retrieved from Investopedia: https://www.investopedia.com/terms/a/artificial-intelligence-ai.asp
Prime Minister’s Office Board of Investment. (n.d.). IT & ITes. Prime Minister’s Office Board of Investment. Retrieved November 6, 2020, from https://invest.gov.pk/it-ites
Jajja, S., & Khan, M. (2018, November 11). Venture capitalists search for opportunities in Pakistan. Dawn. https://www.dawn.com/news/1444865