Real estate industry

Why should Big Data change the real estate industry?

Jadd Elliot Dib, Founder and CEO of Pangea X, writes how big data is changing the world with insights and analytics that were unobtainable ten years ago. The real estate sector is one of many that is expected to evolve significantly with the use of Big Data. Here’s how Big Data can catalyze this evolution.

The real estate sector has been one of the main engines of economic development in the world. Today, the industry has various segments that cater to many areas including housing, hospitality, and entertainment among others.

Although the sector has provided crucial economic stimulus over the century, it has remained largely unchanged. However, on the 21st century, endowed with the excellence of the 4and industrial revolution will ensure that customer empowerment will radically change the industry.

Real estate developers who in the past based their decisions on customer preferences based on their understanding of the market will now be able to provide customers with exactly what they want by basing their decisions on hard facts from big data.

The benefits of Big Data are numerous and can act as crucial catalysts in the evolution of the real estate sector. The real estate sector in the United Arab Emirates is booming after the pandemic and investors around the world are eager to invest in this growing market. Big Data can provide investors and developers with the tools to deliver consumer-centric offerings that lead to new investment and economic development in the UAE.

Decision making

For investors, developers, agents and others involved in the real estate industry, accurate data could be the difference between making a fortune or going bankrupt. For decades, these stakeholders have relied on human intelligence to determine opportunities and associated risks.

However, without hard facts, several developments have shown poor results. Through the use of Big Data, key differentiators for property development such as price appreciation, economic development, visitor statistics and crime rates can be easily extracted. This data can be analyzed and used to make critical business or government decisions. Data can map known opportunities and risks in the area and allow decision makers to make more informed choices.

Real estate estimates

Real estate valuation is perhaps the most important problem big data can solve. Assessments are, although based on some intelligence, subjective in nature as individuals and companies view growth prospects differently.

With such partial precision and arbitrary techniques, the value of real estate can be difficult to determine and may not provide estimates of fair value. Big Data can provide accurate data sets that can be fed into predictive models that can define an average real estate property value. The real estate industry can greatly benefit from these fair value estimates and provide a better understanding of supply and demand trends, which further strengthens industry players.

Real estate transactions

Finding the target audience for a property is a challenge for developers and agents as consumer preferences keep changing and the right client is hard to find for the right property.

With Big Data tools, sellers or brokers can analyze customer preferences and target their employees by matching their inclinations with the property’s main selling points. For example, a person looking for a semi-detached apartment in the heart of the city may be specifically targeted by sellers offering similar apartments. Such targeted marketing improves ROI for sellers and facilitates a smoother journey for buyers.

Risk and Insurance

Risks are an important aspect of any investment. Real estate developments can carry significant risks such as natural disasters and crime rates in the areas. Although most obvious risks can be mitigated or factored into pricing, an accurate risk assessment can be difficult to estimate.

Insurance due to such risk factors can force homeowners to pay unfair premiums resulting in loss of wealth and real estate value. With Big Data, predictive analytics can analyze a wide range of investment risks and provide an accurate estimate. Insurance companies can accurately estimate risk using Big Data and help the potential buyer make the right property valuation.

Technology adoption is still in its infancy, but as the benefits become apparent, more and more stakeholders are expected to embrace big data for their real estate projects.

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