PROPTECH-X ‘Proptech & Property News’: Should We Allow AI to Become a Decision-Making Force in Real Estate?

AI is not a thing to be feared, but it does need to be regulated, says Andrew Stanton.

The title of this piece suggests that, somehow, we can wind back the clock sixty-five years and stop the advance of artificial intelligence, the replication of the neural pathways of the human mind in machines. 

Take a look around. As Amir Husain from Spark Cognition puts it: “Artificial intelligence is kind of the second coming of software,” and its tendrils are everywhere. 

AI is deep inside the real estate sector, planning, design, built environment, smart cities, the sale or rental cycle of properties, and the management of the built environment in general. AI is composed of a number of components. 

Machine learning is the processing of large amounts of data speedily, with algorithms that adapt processes over time. Deep learning is where data is contextualized more in-depth and with a better application, utilised in a higher manner. 

Also, you have the four horsemen of the digital apocalypse; automated, supporting, expanding and, the most feared, autonomous intelligence, where machines, not humans, make the ‘best’ decisions. Now we could say this is terrible, but just as fintech showed us, AI augments what humans can achieve and drives efficiencies, which increases profit.

Having spent over three decades doing the same repetitive sales procedures, the thought of those processes being performed more quickly and more accurately and whilst I’m away doing something more important, seems a winner. 

Legal documentation that humans would take days to process can now be read in minutes by machines.

In fact, due to the legacy-driven, repetitive and admin-heavy nature of much of the real estate industry, the digitisation of the written word plays effortlessly to the strengths of AI. Take for instance the archaic conveyancing process in the UK. At a recent seminar given by Taylor Wessing in its London office, it was confirmed that legal documentation that humans would take days to process could now be read in minutes by machines. 

Go a step further and you have Yourkeys, co-founded by Riccardo Iannucci-Dawson and Craig Massey. They can get new homes exchanged in seven days, or 168 hours (not seven working days). Without AI in the mix, this proptech gold-winning feat wouldn’t be possible.  

In day-to-day terms, in the customer-led environment, making the customer journey quicker, easier and more enjoyable is also a party trick of AI. And the advance in software systems for realtors all over the world gives more time for the sales force to be empathetic and human, closing more business, rather than being over-stretched with the sales job and the paperwork. AI gives a commercial edge to real estate businesses. Late adopters will suffer the consequences. 

I have many who ask me will technology, specifically AI, replace them? I answer yes. Look at the number of banks that have closed and the huge amounts of staff redundancies. It will not come overnight, but it is an inevitable consequence of progress. 

The use of AI in planning design and property maintenance is paramount. The management of buildings, via control and sensor systems, allows the structure to look after itself with minimal human intervention. Wasted or lost construction time can be influenced by removing the human factor. Supply chains become more efficient, driving cost down.  

In recent weeks, James Dearsley, co-founder of Unissu, has asked if mortgage lending information would be better suited to a fully automated system, given the numbers-driven, analytical nature of the ever-changing matrix of lenders wanting to provide differing rates for different types of clients.

Many humans thought it unlikely in the short term. My thoughts were that it is a perfect fit for the on-the-go Gen-Z, about to come of age and enter the housing marketplace. They will want mortgage budget figures at 2am, a time most humans will be sleeping. AI never sleeps.

AI’s intervention in the real estate decision-making process will quicken, as more and more data is collated and analysed, sense will be made of this vast amount of data, guiding humans with new answers to questions they had never thought of. This may sound utopian or dystopian, but surely technology is just a tool that allows the human to exist in their higher form?

Machines, not humans, can make sense and discern patterns in data that helps us to make the right decision every time. Yes, there will be human bias, and systems are only as good as the data supplied, and there will be a need for standardisation. 

But, with technology doubling in its reach annually rather than on a linear progression, the future looks positive, aided by technological advances and the cost of tech coming down in real terms. For example, in the 1960s IBM computers sent us to the moon, and the IBM computer of 2020 capacity wise is many thousand times more capable.  

AI is built upon mathematics, statistics, probability…hooked up with applications to then perform processes. It is not a thing to be feared, but it does need to be regulated

There is of course a flipside to the vast use of data and AI and the encroachment on the private individual, as we saw recently in Davos 2020, where Professor Harari said: “The #AI revolution might create unprecedented inequality. We need to take action to distribute the power and the benefits of AI equally between all humans.”

Taking this thought into the business sector and more specifically real estate, I am not sure the AI revolution creates unprecedented inequality, I just think it is a new prism through which the world order is now being viewed. 

I totally feel AI has the power to bring about a balanced and fairer society, and it should, but the reality is that commerce and capital run the show. The disenfranchised and poor are unlikely to fund multi-million dollar machine learning initiatives. It’s commercial organisations doing this.

There’s a necessary balancing point to the encroachment vs utilisation of AI. Will the proficiency of machines come at a cost if they transgress ethical or moral human codes? Could the algorithms set within artificial intelligence be used in corrupt or questionable ways?

This leads back to the question of how much of real estate should be on autopilot, however super bright that autopilot is.

Many pundits follow a middle ground feeling that harmony between human interaction in real estate and AI will be the future model. If you follow the trend, given that AI will be able to teach itself to be even more clever, humans will become even more marginalised.

What will happen to humanity, hopefully, if the boring mundane sand that clogs up our everyday life is filtered by AI, is we will be able to focus on some bigger problems, as Professor Harari suggests; saving the planet, looking after those in need of care. It will just take a re-adjustment of some of our own neural pathways to learn different and better ways of doing things.

Simply put, AI is built upon mathematics, statistics, probability, information engineering, hooked up with applications to then perform processes. It is not a thing to be feared, but it does need to be regulated, standardised, and follow the ethical codes of humanity and the business environment which are not always easy bedfellows.

Originally published on Unissu, 20th February 2020

Andrew Stanton is the founder and CEO of Proptech-PR, a consultancy for Founders of Proptechs looking to grow and exit, using his influence from decades of industry experience. Separately he is a consultant to some of the biggest names in global real estate, advising on sales and acquisitions, market positioning, and operations. He is also the founder and editor of Proptech-X Proptech & Property News, where his insights, connections and detailed analysis and commentary on proptech and real estate are second to none.

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