How Artificial Intelligence can help Real Estate Property Price Estimation | AI in Real Estate Market Movement Predictions
Summary
We developed a tool based on a machine learning model to automate real estate object estimation and find attractive offers on the market. The tool can also monitor the real estate market to identify ongoing trends. The component allowed the customer to obtain real estate market insights that are hidden from other stakeholders. Due to the tool's success, the customer achieved a distinct competitive advantage and has already undertaken approximately 20 million euros worth of real estate in-vestments based on the insights obtained through the solution.
Challenge
The customer is a real estate company operating in the German market and has the following objectives:
- To monitor and predict price dynamics on different property types (residential and commercial)
- To have an accurate automatic property evaluation
- To automatically discover attractive properties for investment purposes
Solution by AI Superior
We established a data-collection pipeline to analyze over one million real estate items and trained a deep learning model on that data. The resulting model allowed the customer to:
- Get a price estimation for a real estate object based on its parameters (house features, amount of land, availability of facilities, region and geographical location, etc.)
- Identify the degree with which each property parameter contributes to the overall price
- Predict market movement, capture temporal dynamics, and notify in case of a significant change
- Automatically identify underestimated properties on the market
Additionally, we developed an interactive visualization tool for user-friendly access to the model’s insights.
While this tool was primarily focused on the German real estate market, the analytics solution is potentially transferable to other markets. For example, a similar project was executed in the Swiss market.
Outcome and Implications
The system allowed the customer to react quickly to market changes and obtain high-quality in-sights for potential investments. Powered by the system’s insights, the customer performed around 20 million Euros worth of investments across multiple real estate properties that strongly demon-strated a positive return on investment.
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