REAL ESTATE

Residential Real Estate in the 4IR Era

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The Fourth Industrial Revolution (4IR) – powered by technologies like Artificial intelligence (AI), Blockchain, Virtual reality (VR) and the Internet of Things (IoT) – is transforming industries, economies and societies. The real estate sector has not been spared, with digital transformation of the industry moving apace - especially since the establishment of the very first PropTech company in 2016. Now, four years on, how is the PropTech movement harnessing these technologies to further disrupt the real estate space?

Andrew Price, Director of MortgageMe - a fully automated bond aggregator – unpacks four of the technologies transforming residential real estate in particular:

Big Data is defined as extremely large data sets that may be analysed computationally to reveal patterns, trends and associations, relating particularly to human behaviour and interactions.  This is now helping both buyers and sellers make better decisions based on information such as neighbourhood selling trends, traffic data and demographic information. Potential homebuyers can also get access to historical data specifically about the home including information about prior occupants and improvements made to the property, along with the average prices of similar homes in the area.

AI is a wide-ranging branch of computer science concerned with building smart machines capable of performing tasks that typically require human intelligence. Currently, this is being applied to online real estate portals which offer sophisticated and user-friendly comparison tools.  It is predicted that, in the future, these portals won’t make recommendations based on things like number of rooms, price or square meterage of properties. Instead, properties will be matched to individuals based on personality traits and preferences. What this means is that portals will produce fewer results, but these will be based on things that really matter to the consumer. 

Chatbots are AI tools that simulate and process human conversation (either written or spoken), enabling humans to interact with digital devices as if they were communicating with a real person. At their simplest, chatbots can answer queries with one-line responses, or they can be so advanced that they serve as digital assistants which learn and evolve to provide increasing levels of personalisation as they collect and process information. In the realm of real estate, these bots can help potential buyers by supplying them with information about investment options, housing prices and open houses as well as assisting them with focused property searches that take more than just price or area into account to help them find their ideal home.

Blockchain is digital information (the block) which is stored in a public database (the chain). In essence, it is a reliable, difficult-to-hack record of transactions. One of the ways it can assist buyers and sellers is by expediting the process. This is because it has the potential to cut out the need for transfer attorneys who hold things up due to the financial verification element of the sales process. While having them as a safety net to make sure both parties keep their end of the deal is undoubtedly important, using a blockchain distributed database to prove authenticity will enable homeowners to legitimately transfer ownership immediately without the need for third-party verification. Doing away third-party verification also saves the buyer money since this comes at a cost — normally 1 to 2 percent of the total value of the property.

“While buying and selling homes is ultimately a physical endeavour, the future of these transactions is digital and as, 4IR technologies evolve, the more these will be applied to making the process that much easier for all involved,” concludes Price.

For more information about MortgageMe, and the technologies it uses to help homebuyers get the best deal on their mortgage, go to https://mortgageme.co.za.

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