Digital Technology for Real Estate Valuation
02 September, 2021
A conversation with Maurizio Negri, Director of PRAXI Valuations – Global Independent Advisers, based on round-table questions from Il Quotidiano Immobiliare.
Q: What is the impact of digital technology on Real Estate services and Property Valuations in particular?
A: To say that technology is having a major impact on the entire real estate industry, including asset management, property valuation and due diligence services, is an understatement. Digital transformation is a pervasive phenomenon which is driving profound changes across all aspects of human life, from businesses to study, from entertainment to interpersonal relationships, and so on and so forth.
Q: In the real estate valuation sector, there is a lot of talk about AVMs (Automated valuation models), artificial intelligence, machine learning, and big data. Are we facing an epochal transition? Are we talking about replacing human beings with computers?
A: Of course, the shift is epochal but the issue does not concern replacing human appraisers with computers, and the challenge of the future is not about developing infallible computer applications that give undisputed answers to the age-old question: how much is this property worth?
Technology does offer a clear advantage in terms of process efficiency, reducing manual operations with low added value and risk of material errors, but the real and fundamental objective that must be pursued, in my opinion, is an improvement in the qualitative factors impacting real estate valuations.
Q: An example to outline your previous statement …
A: At PRAXI, we are making a major investment in the creation of an IT platform, structured in modular form. Designed with an agile approach, the platform includes several independent and integrated modules, each focused on supporting a specific aspect of the typical property valuation process.
The overarching aim is not to equip us with a new higher performing and more sophisticated AVM, but a technologically sound support of the entire valuation process for the corporate segment.
The IT platform guarantees the valuer the best and most appropriate visibility of the data, to formulate a consistent, objective, and well-documented value judgment.
Q: In short, what are the main characteristics of your new application?
A: The distinguishing and innovative aspect is the logical process on which the IT application is based. It is an iterative process, divided into three activities: data cleaning, data picking and data analysis.
The aim is to provide the valuer with the best and most relevant data required to perform the appraisal, while at the same time highlighting the relationships between the data points. This guarantees a substantial improvement in the comparison process, which is fundamental in every property valuation.
Click here to register for the event to learn more on this topic. The event will be held in Italian.