Developers are making strides but digitalisation is slow

By Yanika Liew

For the average person, social media today has rapidly taken over the role of information broker. With its own ecosystem for news ranging from celebrities to real-time business upheavals, platforms such as Instagram, Twitter and TikTok spearhead hot-button issues of today’s culture. 

So it comes to no surprise that artificial intelligence (AI) technology is creeping into the real estate industry. Such systems learn the pattern and behaviour of human users, so imagine its capabilities in the future, Ian Scott Inteltech managing director Mohd Izharudin Amanudin said during the 31st National Real Estate Convention.

The AI system receives more data through constant usage and in turn, becomes more enhanced. Today’s algorithms are only the beginning. In real estate, AI can offer solutions to streamline processes like property valuation, enhance customer experience and identify valuable opportunities, Izharudin said. 

He pointed to increased lead generation. Through predictive analysis, AI could identify potential buyers. When it comes to repeat clients, the system would be able to learn the intricacies of customer preferences and provide personalised solutions.

The AI can improve the homeownership process, where a system can keep track of loans and other factors that impact homebuyers while retrieving and analysing data on the property market.

“Property valuation and pricing can be much more precise based on market demand and historical data, there is a lot of historical data by the system,” Izharudin said.

He pointed out that these insights could feasibly provide risk mitigation. Investment in AI would also mean investment in a system that has the tools to identify solutions to these risks.

“These systems provide a competitive advantage in identifying emerging trends. For example, in new housing areas, they have a new lifestyle, what do they want? You learn the pattern. So we need a new system to enhance – not to take over the job – but to enhance the job,” he added.

This is similar in the case of marketing, especially when it comes to digital platforms and applications targeted to home solutions, Izharudin said.

Developers today have already begun promoting applications for property management, encompassing homeowner tasks such as rent collection, maintenance scheduling and visitor registration. While these are not yet in the scope of AI, it is easy to see how improved technology would be able to further enhance the homeowner experience.

Analysis of large chunks of data could be done very quickly, utilising the system instead of human resources. This could also add to cost-saving measures as the cost of human resources increases. The system would be able to monitor amenities such as the water tank, lift and other utilities.

With a detailed map of each property, security would easily be manageable through the AI system. Whether in the form of facial recognition, identification or safety measures, Izharudin noted that the system would make it easier to monitor fire hazards or detect firearms.

A developer problem

“The shift from the brick-and-mortar way to digitalisation of the sales process is inevitable in Malaysia. It shows that the technology is an enabler for us to unlock the next level of the business potential,” PKNS general manager of corporate finance and strategy Netty Hezreena Abd Malek said.

“We as a property developer in PKNS face two main challenges when it comes to sales and marketing, so first, end financing challenges and the second one is lack of adoption of digital marketing tools,” she pointed out.

Based on a 2022 Real Estate And Housing Developers' Association (Rehda) Institute report, a significant number of total loans applied for residential purchases were not approved due to ineligibility, lowered margin of financing, as well as inadequate documentation. 

However, real estate agents and developer sales teams would have no way of knowing this information beforehand. 

“This process frustration is wasted time for our sales team, so if we can screen the prospect earlier, then it will allow us more time for us to focus on closing high-quality leads,” Netty said.

She pointed out that according to the report, 48% of property developers spend less than RM400,000 on digital marketing tools, despite 67% acknowledging the impact of digital marketing initiatives.

The factors that contribute to a lack of investment in digital marketing tools is because of the lack of competent people handling the technology platform. The second is the high cost of the software itself, Netty noted.

“So we came up with a good solution for us to try to establish a centralised function of marketing and sales. With this, it allows us to leverage on the right competencies plus the technology to be advertised to a larger base,” she said.

PKNS’ centralised digital platform, PKNS Hartanah Elite, is part of the developer strategy to include the closing of the sales process in digitalisation. From the signing of listings to buying inventory, the platform can give value to stakeholders across transactions.

“This is how we want to improve our profitability and enhance our asset valuations. We are using Proptech as a service. This platform has improved in terms of capability in project management. We understand that the most effective lead generation is coming from the agent, so we are focusing on facilitating agents that we have on board,” Netty said. 

The platform would allow the agent to upload, manage, track and use a single price chart. It was also equipped with a developer dashboard, with live price charts, real-time project health, appointment, booking, loan applications and advanced analytics by demographic.

The application would be included to display the margin of financing for a certain area, as well as individual bank approval rates.

“So, out of this dashboard, we have sales management and financial institution integration, so buyers can proactively select and apply for products from various banks. Instead of submitting multiple applications, buyers can submit a single application that will be transmitted to multiple banks,” Netty pointed out.

Through seamless digital integration, stakeholders from homebuyers, agents, banks and developers, will be able to enjoy increased operational efficiency.

Missing parts

While digital marketing and AI progression promise efficiency, Izharudin noted that there are still challenges and limitations to implementing AI and digitalisation in real estate. 

“Data bias. It can be right, it can be wrong, it may not be accurate, again it depends on the data that it receives,” Izharudin said.

ChatGPT itself is notorious for hallucinating information, and as it stands, there is an increased concern for data security. Lack of proper regulation stifles the environment from which such strides in technology can flourish.

“There is a difficulty in trusting their decision, sometimes the decisions made by the AI itself can be questionable because again as I said, the machines are still learning. When we design the system, the data that we receive must be accurate,” Izharudin said.

“Do we still need humans? Yes, to decide what to ask and how to provide context, legal compliance, et cetera. To compensate for AI weakness, we need humans,” he added.

There are still challenges and limitations to implementing AI and digitalisation in real estate, Izharudin said.

An efficient process will allow agents more time to focus on closing high-quality leads, Netty said.

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