Ahead of the Curve: The potential of generative AI for real estate

Back in 2022 when ChatGPT first made its appearance, artificial intelligence (AI) was still considered a novelty in many industries. Since then, we’ve seen a surge in the popularity of AI assistants and, more broadly, in other generative AI (GenAI) tools that can be used across a wide range of applications and business contexts.

With these new technologies starting to settle into general use, the questions that are top of mind for many in the commercial real estate (CRE) industry are: What value can these kinds of tools add to dealmaking? And how is GenAI adoption shaping up in the real estate space?

A GenAI primer
Given that artificial intelligence is something we’ve been hearing about for years, the first step in answering those questions is differentiating GenAI from traditional AI.

Traditional or “narrow” AI typically focuses on performing certain set tasks – for example, IBM’s ‘Deep Blue’ grabbed headlines by beating a world chess champion. Other familiar examples would be AI used to diagnose diseases, translate languages, or recommend content on platforms like Netflix.

In a business context, this means traditional AI can be used to make predictions from data sets or to analyse data to find trends or make connections a human might not. Generative AI takes a more creative approach. Unlike traditional AI, it can create new content, new insights, and new patterns, from existing data. This means that GenAI can produce a new take on something familiar and old – for example, finding ways to optimise project planning or to connect buyers and sellers in a specific market.

GenAI in commercial real estate
Despite the potential of the tech, at present, the use of GenAI in most commercial real estate firms across New Zealand is still very limited. With that said, this promising new tool is starting to make its way into top proptech solutions, including many of the tools already used in the CRE community.

Other applications, like using GenAI to reduce risks and improve the level of service and customisation available to tenants, are also starting to make their way into the industry, as real estate and tech professionals alike begin to realise the potential this tech has for transforming the way the industry does business.

Looking ahead
With all the above said, it is worth sounding a note of caution. One of the challenges currently facing GenAI is that the technology is still not completely reliable – and is prone to inaccuracies.

Bryan Thomson, Managing Director Harcourts New Zealand said, ”Overall, GenAI has the potential to revolutionise the commercial real estate industry in New Zealand by improving decision-making processes, enhancing operational efficiency, and delivering superior value to stakeholders. However, it's essential to approach AI implementation thoughtfully, considering ethical considerations, data privacy concerns, and the need for human oversight and expertise.”

This means that the information produced by these tools should be carefully vetted and that they certainly aren’t a replacement for due diligence on what makes a sound deal or investment.

GenAI can be considered as a copilot for brokers. One with the potential to not only remove some of the tedium from time-consuming tasks but to also add value to day-to-day operations and the industry at large.

Source: NAI Global