We don’t have to look back too far to recall the biggest milestones in the history of digitalisation – starting with the arrival of the first personal computers in our offices, which posed a major challenge for those of us so accustomed to pen, paper and calculator, trawling through reference books and the arduous task of finding information and conducting analysis.
The arrival on the scene of the computer didn’t exactly make us more organised, but it did make us more efficient and helped us to estimate the value of a property from new approaches: spreadsheets that calculated sums automatically, applications that produced a valuation with relatively little input, PowerPoints, PDFs, the list goes on. Real estate professionals suddenly had access to solutions that they had never dreamed possible, saving them a great deal of time with their work.
Fast forward to today and we can mark another huge milestone in the progress of digitalisation, a way of shifting information and knowledge which has had a hugely positive impact on valuations, allowing us to connect all of our computers to the superhighway of information: Internet and Big Data.
There are currently many sources of useful data available to real estate professionals, along with tools to help them make the most of it: In today’s day and age, data is the new gold dust, and it’s up to each company as to how they make the most of it. For example, some property portals contain a wide range of automated information about property sales and letting prices, by drawing data from user activity online.
Another example is the Spanish Registrar’s Association, which has given real estate professionals access to tools such as MVI (Property Valuation Methodology), which shows the public sales deed prices of the homes registered in the area where the property being valued is located. Although it doesn’t take into account the property’s state of repair, it allows valuers to choose the right comparables to achieve the closest possible value.
Real estate service providers such as CBRE actively use new technology such as AVM, Business Intelligence, Machine Learning, Forecast Analytics and GIS Systems, which automatically allow them to extract and analyse a vast amount of data from different sources and carry out analysis and forecasts.
DVAS (Digital Valuation & Advisory Services), a cutting-edge area of CBRE Valuation & Advisory Services, is actively marketing its own Digital Solutions, creating unique opportunities and providing a competitive edge for its clients. Real estate valuation services traditionally focus on providing valuations and certifications, without offering any added value to companies, but have evolved thanks to their use of technology, which can help them upgrade and improve their traditional services.
For example, DVAS has made hugely significant advances with AVM algorithm models (Automated Valuation Model), which can carry out mass valuations of property portfolios, slashing the time taken to complete a process that previously took months (an AVM can carry out a property valuation every second, with up to 90% reliability). These systems are currently used to complement human judgement, they do not replace the valuer.
Thanks to Business Intelligence, it is now possible to extract all the key information from thousands of documents and reveal new points of view, patterns and relationships, allowing data and analysis to be transformed into dynamic information with significant added value, which can then be analysed and used to make immediate decisions. By combining this with GIS systems, we can geolocalise a large amount of data, establish patterns and analyse different types of data within different contexts of space and time.
Looking to the immediate future, our ability to learn from our successes and mistakes will no longer be an exclusively human trait, as computers are now starting to do exactly this via Machine Learning. This method studies data, predicts future behaviour and conducts analysis automatically, meaning that these systems will improve by themselves over time, without any need for human intervention… Could this signal the end for human valuers?
Project Manager – CBRE Spain