25 April 2019
Big data in the real estate sector
“Big data” is the catch-all term for the explosion of non-personalised data generated in such vast quantities that it cannot be analysed by any one individual. Read on for a glimpse of the opportunities big data affords for the real estate sector.
Big data: a treasure trove of information for real estate agents and developers
There are basically two types of data: information linked to client profiles and information about the real estate market itself.
In both cases, it would be a shame to ignore this valuable information once you see its commercial potential. While an analysis of this data gives us information on buyers’ profiles and the state of the market, we can also use it to look ahead and anticipate the future. This kind of tool can be used to predict client/prospect behaviour, in particular to identify the best time to contact them, based on their profile. It also helps us anticipate changes in market prices.
In the United States, the Zillow portal estimates future developments in market prices by analysing the past and present data of over 40 million residential properties.
SmartZip provides real estate professionals with profiles of the people most likely to use their services, based on information such as their family situation, the year they purchased their property, the mortgage end date, etc.
In Belgium, real estate agents use the Realo platform to identify properties that match their clients’ needs.
Cushman & Wakefield has also made the digital transition, exploiting both internal and external sources (via Eurostat or Oxford Economics, among others). In so doing, they can advise clients at every stage of the decision-making process.
Without big data, the appraiser uses a combination of various data sources to determine the value of a property. This data includes location, services available in the neighbourhood, their accessibility, complementary nature, etc. However, a level of subjectivity is still involved. For example, will the opening of a second grocery store in the neighbourhood increase or decrease the value of the property? What if a third or fourth grocery store opens, what impact will this have? Using big data, we can reduce the amount of subjectivity and refine the data, using an analysis tool to make the necessary conclusions.
Big data on building sites
Big data's added value for developers and builders includes better project planning, cost reduction and an optimum use of sustainable materials and technology.
Unnecessary building expenses represent a significant cost. With big data, developers can reduce this expenditure while improving deadline management (building permit issuing data, coordination of subcontractors, etc.) and project budgets (updating labour and material costs in real time).
They can also do more on the ground, on the building site itself. By equipping vehicles and machines with sensors, and combining the data collected, equipment can be geolocated and its condition checked, making it easy to establish whether a piece of equipment requires immediate maintenance or needs to be replaced.
Zensor is a Belgian start-up that uses collected data to continuously monitor the different installations and send an alert if maintenance or preventive repairs are needed.
Likewise, Predix is a platform developed by General Electric that collects and analyses data from industrial machines, resulting in a more efficient management of building sites.
How many construction projects have experienced delays due to weather conditions? By cross-matching data on the effects of weather on construction against weather forecasts, schedules can be anticipated and drawn up accordingly. On very large sites, this predictive method could also be used for economic or political changes that might affect the price of materials and the cost of labour.
Finally, by analysing this data, we can also determine with a high degree of accuracy which sustainable materials are the most appropriate for a given building, based on its location, weather-related data and the profile of potential buyers.
How can big data be exploited and financed?
That’s a big question! One that involves collecting a significant quantity of data along with the tools and skills required to analyse and exploit it. All of which requires investment and/or knowledge by the appropriate partners. This is where your Relationship Manager can put you in contact with an ING Innovation Banker.
the advice of our expert - Jaime Cuykens
"As Innovation Bankers, we aim to create bridges between our different clients' activities so they can offer each other genuine added value while growing and learning together.
Start-ups often have extensive knowledge in technological innovation, which they combine with a characteristic culture and a dynamic team. Their potential is enormous, as they complement companies that have more traditional activities.
Thanks to their innovative drive, start-ups can help traditional companies venture beyond their comfort zones and develop a better structure for innovation within their business."