How Data Analytics Has Reshaped Real Estate

4m read
Data Analytics, Real Estate

The global real estate market has conventionally been led by industry knowledge, historical trends and professional intuition. But in today’s ultra competitive climate, data now dominates. By 2028 the UK retail estate market is projected to increase by almost £100 billion and the value of the real estate market worldwide is expected to reach $637.80 trillion US dollars by the end of this year.  

With this amount of money at stake, the need for smarter decision-making has never been more essential. From identifying prime investment opportunities to making smarter price predictions, here is how data analytics has reshaped the real estate industry. 

Data analytics in real estate

Real estate has now become a data-driven market, helping agents, investors and developers to make better-informed decisions. The vast amount of real-time data that can be tapped into has transformed how real estate is bought, sold and managed both for the present and future of the industry. 

Here is how data analytics is leading the way within the real estate sector.

Smarter pricing predictions

Through the use of predictive analysis and machine learning, property valuation has become increasingly more accurate. Predictive analytics uses a wide range of data points such as property and land characteristics, location, market conditions and previous sales data to create better-informed pricing estimates within the industry. Real estate agents, buyers and sellers can now get highly precise price valuations for both land and property, leading to more effective negotiations.  

In-depth analysis of the real estate market

Data analytics gives enterprises the ability to identify market trends through detailed data insights and identify exactly what the market is looking for, as well as which properties are worth buying. Timing the market is incredibly important in the retail estate industry, knowing when to buy and sell is key to any successful real estate business. Data analytics allows for more in-depth market insights, allowing real estate agents, investors and developers to take full advantage when the market is in the right state. 

Identify opportunities for investment

Investors and developers can use data analytics in real estate to identify profitable locations and investment opportunities with accuracy and ease. Data analytics allows developers to locate areas that are ripe for investment by looking at a cross-section of data. Analysis of Geographic Information Systems enables real estate agents and developers to get a better picture of an area and helps them identify the most profitable locations in which to invest. 

Those with large property portfolios can use data analytics to manage and optimise their investments by identifying underperforming assets and finding opportunities for diversification. In turn, this enables those within the industry to maximise their return on investment. 

Improved risk assessment

One of the key factors of success in the real estate industry is being able to identify risk. Data analytics has led to more informed decision-making and strategic insight into the real estate market, reducing the risk that comes with expensive real estate decisions. 

But of course, data itself comes with its own set of risks from privacy laws to security concerns. The relationship between data analytics and compliance can be hard to navigate and, if done incorrectly, can lead to damage to both your reputation and bottom line. That’s why when implementing a data strategy it needs to be safe, secure and legally compliant from the very beginning.  

At MDRx we are backed by the industry-leading law firm The Mishcon de Reya Group, enabling us to implement data-driven business solutions that are compliant by design, giving our clients peace of mind and ensuring their data is kept secure. 

Greater customer insights and targeted marketing

By leveraging customer data, real estate agencies can create highly targeted marketing campaigns aimed at specific buyers or renters. By analysing customer demographics and preferences, businesses can identify potential customers for their listing, along with identifying those who are likely to sell based on data such as market trends, length of mortgages and time lived in the property. 

What’s next for data analytics in real estate?

Data has already dramatically changed how real estate operates and will only continue to become more embedded within the industry, driving growth and profits.  

Therefore, learning how to use data effectively is essential, not only to gain a competitive advantage but to keep up with the rest of the industry.  

However, data is only as useful as how you use it, and having experts at your side when creating a data-driven strategy is key to success.  

At MDRx we are a team of expert data scientists, business strategists and software engineers that can create data-driven solutions to transform your business. If you are looking to harness the power of data and turn it into actionable results for your business then get in touch now