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Real estate

AI in Real Estate: Innovation in Property Management

6 Oct

4

minutes of reading

In today's landscape, the significance of data in decision-making cannot be overstated, particularly within the real estate sector. Traditionally, real estate has been a slow adopter of technology, but recent advancements in proptech are catalyzing digitalization. As a result, real estate finds itself at the inflexion point of fast transformation and digital disruption.

Whether it's predicting market trends or efficiently managing a property, AI is emerging as a game-changer. In terms of energy efficiency, AI offers transformative solutions that benefit not only property owners but also the environment.

To show you the value of AI in real estate, we dive deeper into proptech and its various applications in real estate.

The influence of proptech on real estate

In response to the growing demands from global leaders for governments and businesses to prioritize sustainability, change is in the air. This commitment reflects both short-term and long-term climate goals set by the EU.

Under the Paris Agreement, EU governments have pledged to reduce greenhouse gas emissions by 40% and enhance energy efficiency by 32.50%. By 2050, the EU is striving to achieve climate neutrality.

Consider this: buildings are responsible for over 40% of global emissions. It's evident that we need innovative technologies to boost energy efficiency. Even if we triple current renovation rates, we won't hit our targets without tech solutions to enhance the efficiency of existing buildings.

That's where proptech steps in, playing a pivotal role in greening the real estate sector and enhancing sustainability. This also underscores investors' confidence in proptech's potential.

Mordor Intelligence estimates the current proptech market at $9.55 billion, projecting it to reach $15.61 billion by 2028, with a robust CAGR of 10.32%. Those numbers show investor confidence in this emerging market.

Two domains of proptech: residential and commercial

The Residential Proptech Sector encompasses all the digital products developed by real estate tech companies to streamline how people own, manage, or rent apartments and houses. This includes platforms for short-term rentals like Airbnb and Lyric, among others.

Whereas commercial proptech aims more to manage and evaluate your real estate, focusing on making it more sustainable. Think about companies like Enersee or Proptech AI.

How to use AI in real estate

The rise of technologies like AI offers new ways to improve energy efficiency and property management.

1. Predictive Analytics

Investors, agencies, and economists use AI to predict where the real estate market is headed, hoping to get an edge on the competition and buy at the right price. Predictive analytics powered by AI offer insights derived from vast datasets.

These insights can range from forecasting market demands to understanding energy consumption patterns. For instance, an AI system can analyze data from similar properties in a region to suggest optimal energy usage levels or anticipate energy spikes and dips based on historical data.

2. Predictive Maintenance

It’s the interplay between IoT data analytics and artificial intelligence that property management can better understand energy consumption patterns and optimize resource efficiency.

So are gone the days when you waited for a system to break down before fixing it. With predictive maintenance, AI tools analyze patterns and signals from building systems to predict when they might fail. This means heating, cooling, and other critical systems are repaired or maintained just in time, ensuring optimal energy usage and minimizing wastage.

3. Energy Efficiency

The energy efficiency of your real estate falls under the ESG evaluation criteria to measure your company’s environmental and social impacts. An example of an ESG criteria is the BREEAM certificate which looks at the smart metering requirements.

To reach a certain BREEAM score, you are obliged to put meters in place. The only way to get value out of the data you collect is by using artificial intelligence.

Apart from the regulations and requirements, energy consumption has been on everyone's mind lately because it remains a firm bite out of your budget. And in addition, there is also a lot of uncertainty about how energy prices will evolve in the coming years. Especially since you always have to consider external factors.

The past pandemic, for example, has caused many more people to start working from home, so parts of your office buildings may consume excessive energy compared to the occupancy of the building.

One solution to this is to centralize your data where artificial intelligence can recognize patterns so you can extract needed insights from your data about the occupancy of your buildings.

In short, improving energy efficiency is not only in line with the 2030 climate and energy framework but also leads to significant cost savings and a smaller carbon footprint.

Time to embrace AI to manage your real estate

The real estate industry is undergoing a profound transformation driven by AI and proptech. Data-driven decision-making is now at the forefront, reshaping traditional practices and catalyzing digitalization.

As global leaders emphasize sustainability, the EU's ambitious climate goals underscore the urgency of change. Proptech emerges as a key player, aligning the real estate market with sustainability objectives and garnering investor confidence.

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