Barely a day goes by at the moment, without a media story on potential impacts of artificial intelligence (AI) and how it is going to change every aspect of our daily lives, both personal and professional.
In this article, we examine the use of artificial intelligence within the real estate industry, pulling together certain themes and trends, and considering future impacts.
No discussion on this topic would be complete without considering the question "what is artificial intelligence?" The Oxford Dictionary defines artificial intelligence as the theory and development of computer systems able to perform tasks normally requiring human intelligence.
In practice, we have found that the term is often used to encompass a wide range of computer-related assistance. The majority of products currently available are not truly artificial intelligence, but instead sophisticated systems for the collation and analysis of data, providing conclusions and answers based on that analysis.
There are very few systems that actually apply "intelligence" in the sense of exercising what we might describe a human judgment call, but it can only be a matter of time before that gap is closed. The systems are, we should stress, no less useful or beneficial for that apparent "gap".
Within that context, what are the current trends and potential uses of AI within the real estate sphere, given comments such as "rather than….being a differentiator, [it] is now an essential cost of participation in the property market" (Altus Group).
The ability of AI to assess data across a portfolio or range of asset classes makes it a powerful analytical tool in the management of investment portfolios. AI is being used for purposes including:-
AI has a significant role in the design of the built environment and again, allows for the analysis of significant data in the evolution of building design. AI has particular benefits including:-
The benefits of mass data analysis within the investment sphere are apparent, with systems that can analyse data from multiple sources (including non-traditional sources) and distil it into information that investors need to know. In this sphere, AI has the potential to make investment much more research led and it may even be beneficial that the “human element” is removed from the decision-making process.
AI can assess and evaluate a range of data that would otherwise be impossible to consider, before making recommendations based on that data:-
As with any new technology, for every innovation, there are obstacles and AI is no different. As set out above, much of AI concerns data gathering, manipulation, assessment and decision making without human intervention. These will bring challenges under the UK legal framework, including the UK laws on data protection, confidentiality, intellectual property, financial crime, fraud prevention and equality. There will need to be an assessment of compliance with the legal framework, which itself is likely to require significant updating to keep up with technological advances.
The extent to which we "handover" responsibility to AI will be a key consideration, particularly when (as solicitors) we consider questions of liability and who should be responsible for the inevitable mis-steps that will arise. There is likely to be a significant raft of regulatory and legal challenges as this technology becomes more embedded in the real estate sector, and the question of who should be accountable gets scrutinised: the developer building the AI tools, the property experts assisting in training AI, the property companies responsible for using the products?
AI is very definitely here to stay and it can clearly drive very significant benefits at every level of the real estate sector. It might come as a relief to some that there remains a place for "human intelligence" to exercise a value judgment on the output created by such AI systems. However, it remains to be seen if even that role starts to be encroached upon. We live in interesting times!
Many thanks to Paul Rogers and Richard Angliss of leasle for taking the time to chat to us and share their thoughts and insights.
For more information, please contact Robin de Wreede.