Editors note: The following opinion was submitted by George Giannakodakis, CEO and founder of PointData. It is not a sponsored or paid editorial and is published as an an expert opinion out of public interest with the rapid development of AI technologies. Neos Kosmos does not endorse the opinion and/or associated products.
Ground-breaking AI technology will continue to intervene in our lives, no less in the property sector.
South Australian proptech, PointData, recently broke into the West Australian and Victorian markets with AI which provides deep industry insights into residential property.
Governments, financial institutions, property investors and developers are using PointData’s new property data and analytics technology to extract value out of land and housing stock.
Banks use it for customer retention or acquisition processes, and to look at the risk of their back book, consider the climate risk of new infill development.
Our role is twofold – on the one hand we disrupt the traditional market model and on the other we enable governments, developers and homebuyers to make informed decisions with AI data which is highly detailed.
PointData can also play a pivotal role in the social housing crisis.
Governments use PointData’s technology to look at the potential of their assets and what they can do with them. The data that enables government to make better choices in terms of what they might do to use the value of their assets, and to build more social housing.
There are thousands of new real estate listings every day but only around 20 per cent can be developed and of those only 35 per cent of sites are listed by agents as having development potential.
The tool is affordable and will save investors time and money. It can discover what was previously almost impossible to do using conventional approaches.
The AI generated data can work out what happens to property and land values when you change the existing property, whether you subdivide it, amalgamate it, rezone it, you build a factory next to it, or a tram.
Land does all the heavy lifting when you subdivide. Building margins tend to be a far smaller proportion of overall profit. When you subdivide land, you increase the land value per square metre and that’s where the money is.
Like other industries, the property investment space, is all about disruption. Investors and developers can de-risk a site early-on, without spending much money or time researching.
What is really happening in Melbourne’s property market?
We are about to release the development potential of over 600,000 Melbourne properties that can be developed subject to constraints being met. Our new ‘Development Site Alerts’ subscription service will alert investors at the time of listing and include buy price, and what can be developed on that land.
Economists and experts would have you think that it’s all doom and gloom in Melbourne’s property market now, but that’s far from true. Properties in Melbourne have fallen an overall 8.6 per cent since their last peak. However, cities are not homogenous and property prices follow different trends at the neighbourhood level.
While most residential property data and trends are reported at a suburb and local government level, PointData’s technology applies a laser focus on micro clusters at a neighbourhood level. We are talking 50-200 homes.
Its Micro-market Price Index which in lay terms means we can get a far more granular picture of what’s going on at a suburb or city-wide level than real estate companies and experts
Growth from October to Dec 2022, using the Micro-market Price Index
Melbourne is witnessing a correction in house prices, yet 30 per cent of Melbourne’s 10,000 plus neighbourhoods have been trending up in value over the past three months. This is an increase from 20 per cent of Melbourne trending up since September, and so the market is theoretically in recovery which is different to the common narrative that the decline is slowing.
North Melbourne, West Footscray, Essendon North, Hawthorn Alphington, Coburg and Caufield East are showing signs of strong recovery. Toorak-South Yarra and Cremorne, Richmond, Burnley, and Albert Park are also climbing up – bucking the trend.
In the outer western and northern suburbs there are signs of recovery. Pockets like Clayton South, Mulgrave, Narre Warren North, Franklin South and parts of Geelong and Mount Martha are strongly rebounding.
It’s not all rosy. There is worry that the property market may dip if the Reserve Bank continues to hike interest rates in its attempt to halt inflation. This may lead to a slower recovery rather than a crisis, which is what media would have you think. To be concluded.
And the extras… tech overview
PointData has three-sided technology called PropertyAI that comprises:
– machine learning AI automated valuation models that learn to value cities including geographical features like distance to beach, tree line streets and even zoning
– Planning algorithm engine that automatically estimates the subdivision yield under the planning rules and types of development that can be approved, and
– a land economics model that predicts land values when a large block is subdivided into multiple smaller blocks or impacts by new infrastructure, parks, and re-zoning.
We think it’s revolutionary. PointData’s tech provides a new lens in which to consider residential property and how to value our most important asset class.
*Before making any investment decisions, please do your own independent research, considering your own situation. This article does not purport to provide financial or investment advice. See our Terms of Use.
George Giannakodakis is the CEO and founder of PointData. He has over 30 years of experience in the public and private sector. He held senior positions in South Australia’s public service working on urban planning and development, and is the founded InfraPlan a planning and infrastructure firm which worked closely with government across four states.