The advent of artificial intelligence (AI) continues to bring remarkable advancements across various industries, and the PropTech and Built Environment industry is no exception. AI is revolutionising the way we design, construct, manage, and experience real estate and infrastructure, and carries the potential to enhance efficiency, transparency, and data-driven decision-making.
Our recent LinkedIn poll asking our network what part of the real estate industry they think AI has impacted the most found 39% vote property management services, 33% agents and brokers, and 25% vote construction operations. The convergence of AI and PropTech has introduced a new realm of possibilities, transforming the way properties are bought, sold, managed, and experienced. From enhancing design and planning to optimizing construction processes, energy management, and user experience, AI brings numerous benefits, and as it continues to evolve, it has the capacity to unlock further opportunities in the industry, driving innovation, sustainability, and efficiency.
On the back of technological advancements in AI last year, $49 billion in venture capital was invested in AI in 2022 – 40% more than a year earlier. As it stands, there is more VC investment going into Built World AI than FinTech AI, where over the past ten years, AI-enabled Built World startups in Europe and North America have received a total of $18.6 billion in venture funding, over half of which was in the last two years.
AI’s ability to analyse vast amounts of data allows predictive analytics and market insights for the Built Environment. By processing historical data, market trends, economic indicators, and social factors, AI systems can generate accurate forecasts related to property prices, demand, and investment opportunities, which in turn helps real estate professionals make informed decisions, identify emerging market trends, and mitigate risks associated with property investments.
AI algorithms can analyse numerous variables such as property size, location, amenities, recent sales data, and market conditions which generate accurate property valuations, with automated valuation models (AVMs) leveraging AI and machine learning to estimate property values swiftly and accurately. This not only benefits buyers and sellers by providing transparency, but it also assists lenders, insurers, and investors in making informed decisions related to property financing and risk assessment.
AI plays a vital role in optimising energy consumption and sustainability in the built environment. As it stands, the real estate industry currently consumes 40% of global energy and has a projected increase of over 50% in building CO2 emissions by 2030. AI is helping companies transform these issues by tracking, analysing, and reducing emissions in buildings. Smart buildings equipped with AI-powered sensors and Internet of Things (IoT) devices can collect real-time data on energy usage, occupancy patterns, and environmental conditions. Machine learning algorithms analyse this data to develop energy-efficient strategies, automatically adjusting heating, cooling, and lighting systems based on occupancy and external factors. AI-driven predictive maintenance helps detect and address equipment inefficiencies, minimizing energy waste and reducing carbon footprints. By integrating renewable energy sources and facilitating demand response systems, AI promotes sustainability and cost savings.
Advanced AI solutions are enabling both the digitisation and the decarbonisation of the built world. By considering factors such as energy efficiency, carbon footprint, and sustainability ratings, AI algorithms can recommend the most environmentally friendly construction materials and techniques, contributing to greener and more sustainable buildings. Companies with an ESG focus closed 33% of the financing rounds in Q2 last year, showing how investors are targeting green buildings for funding now more than ever.
AI is transforming the way buildings are managed and operated. Through the Internet of Things (IoT) integration, AI systems can collect and analyze real-time data from sensors placed within buildings. This data can be used to optimize energy consumption, improve security systems, and enhance overall operational efficiency. AI-powered systems can monitor building conditions, detect faults or anomalies, and automatically trigger maintenance requests or alerts. As a result, property owners and facility managers can reduce costs, improve sustainability, and create more comfortable living or working environments.
The tech-savvy millennial generation accounts for nearly 43% of the housing market, leading to an increase in the demand for smart homes with IoT-enabled devices. Smart home automation powered by AI enables residents and property owners to control their homes remotely, efficiently, and cheaply, from temperature and lighting to security and entertainment. A report by MarketsandMarkets estimates that the global smart building market size is projected to grow at a fast pace to reach $108.9 billion by 2025, with AI being a key driver in optimizing building operations and energy efficiency.
Data-driven decision making and efficiency
The built environment industry generates vast amounts of data, and AI provides the tools to harness its potential. AI algorithms can analyse data from various sources like property listings, market trends, demographic information, and user feedback, to generate valuable insights. These insights aid investors, developers, and real estate professionals in making data-driven decisions, such as identifying promising investment opportunities, predicting market trends, and optimizing property valuations. AI’s ability to process and interpret complex data sets at scale empowers stakeholders to make informed choices, leading to more efficient and profitable outcomes.
With its ability to process vast amounts of data and generate actionable insights, AI algorithms enable architects, urban planners, and developers to make informed decisions. Machine learning algorithms analyse historical data, market trends, and user preferences to identify potential issues with buildings and predict when care is needed, reducing cost and increasing efficiency.
The construction industry is lagging in its digitisation and adoption of technology compared to other industries. With 95% of all data captured in the construction and engineering industry going unused, the integration of AI in construction processes will streamline operations, improve productivity, and reduce cost.
Robotics and automation have been deployed to perform repetitive tasks with precision, speed, and accuracy, reducing the dependency on manual labour. Drones equipped with AI-powered cameras and sensors facilitate aerial surveys, monitor construction progress, and identify potential safety hazards. AI algorithms also optimize the supply chain by analysing inventory levels, predicting material requirements, and minimising waste. Machine learning is arguably the most potent aspect of today’s AI and is already used by real estate companies to predict real estate prices by analysing millions of data points.
In the ever-evolving landscape of the PropTech ecosystem, AI has emerged as a transformative force, playing a crucial role in driving innovation and efficiency throughout the industry. By harnessing the power of AI, PropTech companies can process and analyse vast amounts of real estate data, enabling more accurate property valuations, market trend predictions, and personalized recommendations for buyers and investors. Moreover, AI algorithms facilitate smarter property management by optimizing energy usage, predicting maintenance needs, and enhancing security systems. Below are some of the companies that are leading the way in integrating AI into the PropTech ecosystem, empowering the industry to adapt swiftly, make data-driven decisions, and provide enhanced experiences for all stakeholders involved.
OpenSpace is the global leader of reality capture and AI-powered analytics for the construction and real estate industries, simplifying construction’s most powerful technology so builders can capture jobsites with unmatched speed, provide “boots on the ground” visibility and insights, and make informed decisions – all on the world’s most reliable platform.
Kwant is a workforce management and safety platform built to accelerate construction through productivity and safety by using smart wearables and plug-n-play sensors, connecting job site data and providing real-time insights and reports. Kwant use AI-powered predictive analytics to compare past versus present data to make smarter decisions quicker.
Localize is an advanced operating system for the multifamily and residential real estate industry. At a base level, they have used AI to leverage the way that agents and brokers can do their business more efficiently by taking over the repetitive manual work that agents must do over, providing them more time to refocus elsewhere. It has been built on a flexible infrastructure which has been designed to be agnostic and is ready to integrate with third-party systems to create an ecosystem of strategic partners and system integrators.
Mercator AI’s mission is to give business developers more time to do what they do best and support them with the insights they need to have informed and productive conversations. They mine and analyse millions of construction data points across the project lifecycle so that their customers can confidently find and qualify projects and partners faster.
Haystacks AI is a platform that utilizes AI and machine learning to collect and analyse massive amounts of data to provide enhanced insights for fund managers targeting the Single-Family Rental (SFR) market. Their innovative technology allows for more accurate projections of key real estate metrics by uniquely layering alternative data on top of primary real estate data, creating a best in class automated underwriting tool to efficiently source, acquire, and manage SFR properties.
Autodesk, Grace Ellis; 100+ Construction Industry Statistics. (23rd March 2022)
A/O PropTech; AI in the Built World. (2023)
Oivan; How To Leverage AI in the Property & Construction Industries. (22nd January 2019)
Plug and Play, Tinotenda Muradzikwa and Ben Ahrens; AI in Proptech is Taking Smart Buildings to New Heights – Here’s How. (27th May 2023)
Quytech, Siddharth Garg; AI in PropTech: How Artificial Intelligence is Paving the Way for Smart Property Search. (23rd May 2023)
TechCrunch, Kunal Lunawat; Generative AI is building the foundation of proptech’s next wave. (7th February 2023)
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