Revolutionising real estate using AI

January 14, 2024

The real estate sector could reap major benefits from AI

Revolutionising real estate using AI


The real estate sector, a key pillar of Pakistan’s economy, is expanding, particularly with a boom in housing and commercial projects that drive infrastructure and industry growth. Overcoming its challenges with digital innovation, the sector is gaining renewed confidence from consumers and investors as it embraces technologies like artificial intelligence and machine learning to reach its full potential. While projects like Capital Smart City, Imarat Downtown and many others in the Punjab are using smart technologies to improve residence and lifestyle, there remains a gap in its use in other real estate practices.

Artificial intelligence could significantly streamline the process for real estate professionals to assess property values, liabilities, renovation history and some personal details of homeowners swiftly. The home purchasing process is made more efficient with computer programmes capable of analysing millions of data points in moments. Machine learning uses extensive data to formulate optimal pricing strategies.

These advancements in technology are revolutionising property development, transaction simplification and the home searches. Digital tools are being integrated into everything from consumer purchase and sales tactics to the investment in and development of sizeable commercial ventures. Implementing AI and ML technologies in Pakistan’s real estate sector has the potential to greatly enhance the trustworthiness and efficiency of business operations.

The real estate industry has become increasingly complex over time. Technological advancements, especially AI, have revolutionised the sector by making a wide range of information readily accessible. The Covid-19 pandemic underscored technology’s vital role in sustaining industries and urged a re-evaluation of its importance, with AI playing a key part in overcoming challenges and ensuring business continuity.

There are various innovative ways AI and ML can transform Pakistan’s real estate sector. AI processes extensive datasets to forecast market trends, enabling stakeholders to make well-informed decisions. This use of predictive analysis helps in understanding the future dynamics of the real estate market, ensuring that decisions are based on data-driven insights.

For example, SmartZip offers predictive marketing services, using AI to analyse various data points to predict which homeowners are more likely to sell their properties soon. By utilising ML algorithms, property valuation becomes more accurate.

These algorithms consider a wide range of factors, leading to transparent and fair pricing. This advancement is crucial in establishing a more equitable real estate market. Such use of ML is already on by Zillow for various purposes, including their Z-estimate feature, which provides an automated estimate of a home’s value based on public and user-submitted data.

Another real estate company in the USA, Redfin, uses AI to provide property value estimates and to offer personalised property recommendations to its users.

AI systems can also present users with property suggestions tailored to their search behaviours and preferences. PropTiger uses AI and ML for personalised property recommendations and real-time property valuation. Compass employs AI in its real estate platform to help agents and clients make more data-driven decisions. They use AI to analyse market trends and provide insights on property listings. Moreover, companies like OpenDoor utilise machine learning algorithms to make instant offers on homes, allowing homeowners to sell their properties quickly and efficiently. REX Real Estate uses AI to bypass the traditional ML system, targeting potential buyers directly with sophisticated digital marketing strategies based on predictive analytics.

…the road to fully embracing advanced technologies, particularly in Pakistan’s real estate sector, is steep. It presents a significant gap but also a potential market opportunity.

AI could also enable better management of properties through tasks like energy saving, predictive upkeep and security improvements. For example, BuildingLink is an innovative property management software widely used in residential buildings, especially in the United States and other countries. It incorporates various AI-driven features to enhance the efficiency and effectiveness of property management tasks.

Various AI mechanisms allow prospective buyers to undertake virtual tours of properties, aiding those who are abroad or cannot visit in person. Aiwujiwu is a Chinese real estate platform that uses AI for various purposes, including virtual property tours and intelligent property matching.

AI could also redefine due diligence and regulatory processes if used to simplify the verification of documents and ensure adherence to local laws, reducing fraud risks and expediting transactions. To illustrate, Kira Systems is a company using AI for document verification and legal compliance in various sectors, including real estate. Kira’s AI-powered platform is designed to analyse and extract information from contracts and documents, helping real estate professionals ensure accuracy and legal adherence in their documentation.

Combining AI with blockchain can also lead to smart contracts that automate the contract execution process, thus saving time and reducing transaction costs. Propy, a Californian company utilises blockchain technology for executing secure and efficient property transactions through smart contracts

By adopting AI and ML, Pakistan’s real estate sector could amply advance in efficiency, transparency and customer satisfaction, propelling growth and fostering innovation within the industry.

However, the road to fully embracing advanced technologies, particularly in Pakistan’s real estate sector, is steep. It presents a significant gap but also a potential market opportunity. Adopting AI and ML in Pakistan’s developing real estate market can encounter numerous hurdles, including technical, economic, regulatory and cultural barriers.

The country’s limited digital infrastructure, including issues with internet access, data storage and processing, can impede the uptake of these technologies.

AI and ML need vast amounts of structured, quality data, a challenge in Pakistan’s real estate due to unorganised data and inadequate digital records. Much of the land in Pakistan remains unregistered, unconsolidated which in itself is a hindrance to the presence of a digital record. Additionally, there’s a lack of AI and ML expertise, a hurdle for the deployment and upkeep of these systems. Furthermore, Pakistan’s legal and regulatory provisions for data privacy and technology are not fully equipped to manage AI and ML’s complexities in real estate, and there’s often resistance to change in long-established sectors.

Cultural and social factors have resulted in Pakistan’s real estate market remaining, although lucrative, immature. Land mafia and landlord culture may lead to hesitation in adopting new technologies due to its increased transparency and diligence.

If accepted, the increasing reliance on digital platforms, the risk of cyberattacks and data breaches will become a significant concern. Ensuring robust cybersecurity measures is crucial but can be challenging.

The general public’s perception and acceptance of AI and ML interventions in real estate transactions could impact the adoption rate. Some people might prefer traditional methods over technology-driven approaches due to trust and familiarity issues. Therefore, to effectively implement AI and ML in Pakistan’s real estate, a combined strategy of government support, industry partnership and strategic investments in infrastructure and education is essential.

The writer, a lawyer, is the CEO at ZAKCasa and Verde as well as a managing partner at Lex Mercatoria

Revolutionising real estate using AI