Around a third of Australia’s real estate professionals believe artificial intelligence will have a “revolutionary impact” on the industry, but the same number again have not taken any steps to implement AI.
This is the key finding from the latest Yardi/Property Council of Australia technology survey – the fourth in an annual series that tracks the attitudes and practices of investors, fund managers, developers and consultancies, and offers deep insights into technology adoption.
“The AI genie is out of the bottle,” says Property Council Chief Executive Officer, Michael Zorbas. He believes AI will “transform the property sector for the better”.
“With the disruption caused by automation, artificial intelligence, smart building systems and intelligent devices at every stage of the real estate value chain, business as usual is shifting,” Mr Zorbas says.
AI awakening
The global AI market size was valued at US$196.63 billion in 2023 and is projected to expand at a compound annual growth rate of 37.3% between now and 2030.
However, not every real estate company is moving at an accelerated pace, the Yardi/Property Council of Australia technology survey reveals.
The survey, completed voluntarily by 341 industry professionals in November 2023, found 31% of respondents hadn’t taken any steps to adopt AI and 62% thought real estate, in general, was lagging other sectors for technology adoption. Just over 40% were preparing to leverage AI and 26% had implemented systems.
The impact varies across sectors, with 63% of respondents from financial institutions seeing AI as revolutionary compared to only 18% of fund managers. Why is this? The finance sector has been an early adopter of AI and automation for everything from fraud detection to customer service, and this could explain the optimistic attitude.
Similarly, Yardi’s companion survey of Asian property professionals found 56% of respondents from Mainland China – where investment in generative AI has exploded – expect a “revolutionary impact” on real estate. In India, where tech companies are positioning the country as the largest pool of AI talent on the planet, a massive 67% expect radical change.
Methodical moves
Julian Kezelman, Innovation Director at Taronga Ventures, says there are various explanations for why Australian real estate companies are taking a wait-and-see-approach to AI, including “issues with data management, gaps in technical capability and a lack of clarity around key use cases”.
Given these reasons, it is “actually sensible for the sector to wade into the possibilities of AI relatively slowly,” Julian says. With care and caution, real estate companies can ensure they have the “building blocks in place” to determine the highest and best use cases for the technology.
According to Yardi’s Bernie Devine, Senior Regional Director of Asia-Pacific, the survey data suggests Australia’s real estate industry is concerned that it is trailing rather than trailblazing with technology.
“Just nine per cent of respondents feel Australia is leading the way, in stark contrast to our neighbours in Asia. However, swift advancement and implementation of AI and tech solutions is prompting companies to reassess their technology strategies to keep up with the pack,” Mr Devine says.
The path to progress
The most popular use cases for AI in 2024 are to respond to messages, answer financial questions, plan travel itineraries and craft social media posts, according to research by Forbes.
Yardi is already incorporating AI into its platforms. Yardi Rentcafe, for instance, features a chatbot that can communicate with prospective build-to-rent customers, do the legwork for leasing agents so they can spend more time forging human connections with qualified customers.
“AI chatbots are simplifying lease negotiations, rent collection and maintenance scheduling. These are merely a glimpse of what lies ahead,” Mr Devine says.
Alice Drew, Lendlease’s Head of Place Futures Alice Drew, agrees. “Technology, even generative AI, won’t be able to do our jobs for us, but will enable us to do our jobs better, by extending our personal creativity and helping us move beyond our limitations.”
Mr Devine says Yardi is in lockstep with other organisations around the world calling for transparency, scrutiny and regulations around AI development to ensure it is used ethically.
“While there is no question real estate companies must proceed with caution, most respondents to our survey acknowledged AI as a game-changer that can help them deliver better services and create better places for people.”
For more insights, download Yardi’s Digital Transformation Report 2024.