Build Magazine's decision to give its award for Technology Firm of the Year 2016 to Data8, who deliver total data quality solutions, suggests that data is finally being recognized in the construction and property industries - despite little press around how they work together. I decided to investigate how it was being used.
So, just what has data got to do with the property industry?
Let’s start with property. Everyone is related to property in – whether you work in a building, live in a house or a flat or grew up in one, I could go on and on.
One way that data is used in this market is to predict trends. This isn’t a property price report that you so often hear on the news, this is predictive analytics. The very same type of analytics which shops and businesses use to predicts their trends for their sector. This data, which is based on previous house prices, trends and location reports is used to predict which way the market will turn and the values that can be placed upon houses whilst taking into account a number of considerations such as hazard risk, location, house type etc.
Another example comes from property investors. They have a useful tool which allows them to compare their performance against a bench mark – so they can have their rental rates crunched along with value and management cost using the IPD (formerly the Investment Property Databank). This is just one example of how data can be used as a performance comparison.
A further interesting fact I came across a survey by Canadian real estate advisory firm Altus Group is that $11 TRILLION of real estate assets are being managed by manually inputted spreadsheets. Yes. $11 TRILLION – that’s written like 11,000,000,000,000. Just let that sink in. Then think about the level of errors which will be on those spreadsheets and what it could potentially cost the company in irrelevant communications, privacy breaches, time wasting etc. The data is there and the potential to use it to gain a major competitive advantage is there, but as with any industry manually inputting information, there will be errors and these need identifying and cleansing.
Also, validation solutions are extremely beneficial in the property market – for example, determining credit scores, whether that’s for a potential tenant, investor or first time buyer. With regards to the errors in spreadsheets – estate agents could install validation tools so that customers input their own details which are validated in real time at point of entry. These tools are linked to the CRM system, ensuring only correct details are input! Pretty jazzy if you ask me.
Property, often seen as an opaque market is now becoming more and more transparent thanks to data as it’s providing more understanding and allowing people to compare prices, locations etc. in an unbiased way. I’m not undermining the property industry at all – the human touch will always be needed as a computer cannot provide the situational advice and support a human can.
So, a small insight into the link between property and data – there’s so much more to it as it’s just a varied and dynamic market. But in summary, property uses data for: predictions, analytics, communications, performance indicators and insights into business.
Stay tuned for part 2: data and construction!