Property industry on AI precipice as millions invested in new technologies

The property industry is on the precipice of AI development and transformation as businesses scramble to make their mark in the technology space.

The property industry is pumping massive investment into artificial intelligence technology and machine learning, but experts in the space are warning funders to be deliberate and considered through the upcoming development waves.

The popularity of consumer-focus generative AI has exploded in the past two years after the launch of Chat GPT and Bard made the technology accessible to the masses.

But for many in the property industry, it is not new technology. International and local businesses have invested significantly over the past decade to streamline operational efficiencies and improve the customer experience.

Proptech BNE founder Isaac Coonan says the industry is on the edge of significant advancement in the space.

However, businesses must first identify the problems they want to solve and whether AI is the answer.

“We can see the horizon,” Mr Coonan said.

“What’s exciting about it is we can see what it can do and what it can solve for us. Now, we need to get the next two steps before that right to optimise and maximise AI’s impact. Otherwise, we’re going to be solving solutions that we don’t know the root cause of the problem.”

Those businesses leading the AI charge in the sector have put the entire life cycle of a property under the microscope, developing tools for leasing, building management and lead generation.

The property industry is on the precipice of AI development and transformation as global and local businesses scramble to make their mark in the technology space.

For global commercial brand CBRE, AI is about doing things differently and better.

Led out of the US by chief digital and technology officer Sandeep Dave, the business is deploying transformative technologies at scale, with more than 1bn square feet of property being governed by CBRE’s Smart Facilities Management program.

“We’ve been trying different things,” Mr Dave said.

“We have succeeded in some, and we continue to try more.

“A building is generating enormous amounts of data. How can you use that data to manage the building more efficiently?”

AI is also top of mind for commercial agency JLL, which has already implemented AI products and services that range from debt advisory to energy management.

Global chief technology officer of JLL Technologies Yao Morin anticipates greater advancement in automatic property valuations, energy conservation, space utilisation and building self-optimisation in the years to come.

“The transformation we’re seeing in real estate – accelerated by AI – is that vast quantities of data can be generated, harnessed, and analysed to improve real estate outcomes for both investors and tenants,” Ms Morin said.

The technology boss noted an increasing use of 3D visual renders of a property, called digital twins, which is often paired with augmented reality. It’s not just global businesses in the uptake, either.

REA Group is no stranger to artificial technology and machine learning, which has been commonplace within the company for a decade.

The ASX-listed company operates the largest online property marketplace, realestate.com.au, which attracts 12 million visitors monthly across its platforms, allowing the business to leverage more than 1 trillion data points and 45 years of data to inform its tech development.

“We do believe this is an area that we are putting a lot of investment in over the next two to three to five to 10 years,” REA chief product and audience officer Melina Cruickshank said.

“But, it won’t be investment that’s for the sake of it. AI’s actually going to have commercial tangible outcomes.”

PropTrack boss Melina Cruickshank.

Ms Cruickshank said the most successful development to date has been its Automatic Valuation Model, which provides real-time property valuations for homeowners nationwide.

But, the “missing link” at the moment is renovations. Home improvements are often only recorded when the property is put onto the market, which may occur years after any updates are made.

“At the moment, we can show comparables and comparable sales,” she said.

“Our ultimate goal would be to get homeowners to upload images of their own property which would then show the renovation because that’s the missing link,” she said.

One thing residential property companies are trying to do with AI is accurately predict when someone is looking to buy, sell and refinance.

REA is in the midst of building a “propensity model” to help find listings and identify new customers for its brokerage Mortgage Choice.

National real estate agency Ray White has also invested tens of millions of dollars into its own technology, called NurtureCloud, which it hopes will help agents with lead-generation and improve the customer experience.

The private company acquired the technology in 2019 and has continued to develop it in-house.

Ray White managing director Dan White said it was about replacing the old school “rolodex” agent model with a more sophisticated system.

“We have so many different ways in which we come into contact with our customers,” Mr White said.

“That’s what this system has been developing, taking all those different levels of activity and then being able to distil it into one complete picture. We’ve got to use the value of AI to actually give a better service … and give them more targeted information rather than just being spammed with phone calls or emails.”

One of the pitfalls of pushing into a new space is the risk of chasing the proverbial golden goose. CBRE’s Mr Davé advised to onlyjust focus on tangible problems.

“The one risk factor is chasing the shiny object, and that becomes tricky unless you are anchored and grounded on what is the business problem you’re trying to solve,” he said.

“Our strategy is to be focused on the most high-value use cases that will deliver us the most meaningful returns. We look at it from an impact and a feasibility perspective.”

“Across this whole spectrum of efficiency through transformative ways of working, we’re only scratching the surface. There’s a significant efficiency gain to be had.”

The sentiment was echoed by REA’s Ms Cruickshank.

“You can use technology for the sake of technology sake and go and play and create all these kind of really interesting generative AI features that don’t add value,” she said.

“You need to keep bringing it back to how is this going to deliver a better experience, a faster way of operating.”

“We’ve got to use the value of AI to actually give a better service.”