With the recent wave of Artificial Intelligence (AI) reshaping how various industries function, it is no surprise how this has been a welcome transformation for the real estate sector as well. As the industry moves towards a digital, tech-driven future, AI is pioneering the revolution in how stakeholders interact with real estate. In this article, we try to gauge the potential of AI in transforming the real estate industry.
See also: Impact of virtual reality on real estate sector
Improved property search
Moving away from the generic search filters, real estate platforms using AI-based technologies are offering buyers better recommendation engines to simplify the search process. These engines function by analysing large volumes of relevant user data, ranging from price range and preferred location to configuration preferences, to curate personalised recommendations. So bid adieu to manually scanning hundreds of listings as you will now be automatically guided to the most relevant options. While this increases engagement for the platform, it significantly cuts the time spent on scanning the available listings for the buyer.
Automated Property Valuation Models (AVMs)
This super useful tool analyses historical price trends, neighbourhood characteristics, floor plans, infrastructure projects and market activity for you to provide accurate, real-time property valuation. By simplifying home loan appraisals and helping set realistic selling prices, it has emerged as a boon for banks, NBFCs, and developers alike. Not only this, it also helps eliminate underpricing or inflated expectations, resulting in a more transparent and data-driven pricing process.
Predictive analytics
Not only can AI analyse past and current trends, but also identify upcoming hotspots by analysing factors such as demographic shifts, employment trends, infrastructure development, and price appreciation patterns. By alerting investors about an emerging locality before the prices rocket, it facilitates more proactive and smarter decisions and maximises ROI by ensuring early entry.
Chatbots and virtual assistants
More and more online real estate platforms are incorporating AI chatbots as a part of their UI to provide instant responses to user queries regarding a range of topics, such as property availability, price range, legal requirements and more. Since these virtual assistants are operational 24/7, it significantly reduces the load on customer service centres while at the same time, enhancing lead conversion by keeping users engaged in real time. To ensure greater regional accessibility, several platforms also provide multi-language support bots.
Enhanced property visualisation experience
Moving beyond simple photograph uploads, AI is revolutionising how properties are showcased online through 3D virtual tours, panoramic photos and augmented reality. Buyers can now walk through an apartment or villa right from the comfort of their homes. Moreover, virtual staging helps buyers gauge a more in-depth insight into how a property might look post move-in by digitally furnishing empty spaces. For long-distance buyers and NRIs for whom digital impressions are key in their investment decisions, this feature is a godsend.
Better fraud detection and legal due diligence
Several essential tasks that erstwhile had to be done manually, such as cross-checking documents, owner details, litigation history and land records with government databases, are now being assigned to AI models. Identifying discrepancies and red flags has become easier than ever with AI alerting the user, thereby helping reduce instances of land fraud, illegal possession, and forged documentation–a common concern in the real estate industry.
Construction management and risk mitigation
AI is increasingly finding use among developers for efficient project management. It uses drones, sensors and project management software to predict delays, estimate budget overruns and identify safety risks, a game changer in improving project delivery timelines and budget discipline.Â
Property management automation
In the case of rental properties, AI tools are being used to assess potential tenants by analysing rental histories, credit scores, employment verification and behavioural analytics. Even after the onboarding, AI has made property management a breeze by managing rent collection reminders, lease renewals, repair schedules and complaint redressals–all from a centralised dashboard. Handling large rental portfolios has been made easier than ever for landlords with automation.
Smart building system
Seamless integration with Internet of Things (IoT) devices in modern buildings has helped automate energy use, lighting, water management, air quality and security. This can be especially beneficial for commercial buildings and high-end residential complexes, wherein AI can predict maintenance requirements, lower operating costs and improve sustainability.
Urban planning
With the Smart Cities Mission gaining momentum in more and more places, AI is being used for data-backed urban planning. Simulating urban layouts, predicting traffic congestion, optimising public transport routes, and allocating resources efficiently are but a few of the functions of AI in this sphere. The insights gained help create sustainable urban environments that balance housing, infrastructure and ecological needs in the best possible manner. Moreover, in the wake of the recent wave of ecological consciousness, AI also helps assess environmental impact of large-scale industrial projects.
AI in real estate: A double-edged sword?
AI has been revolutionising the real estate industry one step at a time. However, this comes with its share of downside that stakeholders need to be cautious about. Here are some of the main concerns associated with using AI in navigating through the real estate market and what can be done to mitigate them:
Data bias and inaccuracy
Relying heavily on the data they are trained on, AI tools tend to provide inaccurate valuations, flawed predictions and misleading property suggestions if the underlying data is outdated or biased. In a system like India’s where digitised land records and transaction date can vary in quality across states, this becomes especially problematic.
What can be done: Always treat AI as a guide, not the final authority! Cross-verifying the insights with independent research, preferably with professional support, can go a long way in avoiding this.
Insensitive decision making
While AI is highly reliable for technical and logistical aspects, it may miss out on the emotional, cultural and lifestyle nuances. The dependence on large amounts of data might overlook the personal aspects.
What can be done: Make sure to use all the available customisation options for your search preferences and supplement AI tools with hands-on knowledge, seeking support of consultants who understand your unique requirements.
Privacy and data security concerns
Online real estate platforms collect extensive personal and financial data of the users to provide personalised recommendations. If not properly encrypted or managed, this information may be susceptible to data breaches and misuse.
What can be done: Check the data protection policies of the platform you are using and depend only on trusted platforms. Sharing sensitive documents like government IDs and bank statements is a big no-no until absolutely necessary and verified.
Over-reliance on technology
With the rise in automation, complacency is also on the rise. By relying fully on AI to set prices and plan construction, developers may be ignoring on-ground realities. Similarly, buyers might believe AI-driven results to be accurate enough and skip crucial steps like site visits or due diligence.
What can be done: No matter how accurate the results might seem, AI only serves only to enhance your judgement–as opposed to replacing it. Site visits, legal verification and real-life interaction with professionals still remain critical steps in the investment process.
Housing.com POV
Streamlining the property search process, improving valuation accuracy, automating operations and enabling data-backed investment decisions are but a few ways how AI is transforming how real estate is approached. However, as with any technology, its limitations should not be ignored. Reaping the maximum benefit from AI tools is only possible if they are combined with informed judgement and on-ground knowledge, leading to safer and more lucrative experiences.
FAQs
How is AI helping property buyers and renters?
By delivering personalised listings based on user preferences, budget and location, AI is simplifying the home search process for buyers and sellers renters.
Why is AI-driven property valuation better than traditional methods?
AI uses a more vast dataset than it is possible to do manually, including recent sales, locality trends and more to provide more transparent and competitive pricing.
How does predictive analytics support real estate investment?
Taking into account future market indicators like infrastructure projects, population shifts and economic growth allows AI to predict high-potential areas and investors to maximise ROI.
Are AI-powered virtual tours reliable for property assessment?
3D virtual walkthroughs and staging tools provide a realistic feel to the property. While not a substitute for a physical visit, they are useful in the initial stages.
What are the risks of using AI in real estate?
Data inaccuracies, algorithmic bias, privacy issues and lack of human sensitivity are some common issues that stakeholders might face.
How can users protect themselves from the downsides of AI tools?
Independent research, professional consultation and cautious sharing of personal data can help mitigate the downsides of AI in real estate.
Can small players benefit from AI as well?
AI tools find application among smaller brokers, landlords and individual investors as well, who use it for customer support, automated rent tracking or tenant screening.
| Got any questions or point of view on our article? We would love to hear from you. Write to our Editor-in-Chief Jhumur Ghosh at jhumur.ghosh1@housing.com |
