TL;DR:
- ChatGPT, an AI-based assistant, has the potential to revolutionize the property industry by streamlining the selection and buying process.
- Real estate companies like APAC Realty and ERA Asia Pacific are customizing ChatGPT to enhance productivity and improve client service.
- While AI technology can replace certain standardized tasks, it is unlikely to fully replace property agents in the near future.
- AI tools like ChatGPT can improve efficiency, allowing agents to focus on higher-value creative activities and customer interactions.
- Legal and ethical considerations, such as data privacy and bias, must be addressed when implementing AI in the real estate sector.
Main AI News:
In the bustling cities of the future, homebuyers might soon find themselves interacting with an artificial intelligence (AI)-based assistant to fulfill their property requirements. This cutting-edge technology, exemplified by ChatGPT, has the potential to revolutionize the real estate sector, streamlining the selection and purchasing process without the need for human property agents and their associated commissions.
However, as promising as this may sound, the widespread adoption of AI in real estate remains a realm of science fiction for now. While the real-world capabilities and limitations of ChatGPT and similar AI services are becoming clearer, concerns about overnight job replacement and a fully automated industry appear exaggerated at present. Nevertheless, various companies across sectors are embracing the age of AI experimentation, investing in understanding its potential advantages, pitfalls, and its impact on business practices—and the property sector is no exception.
Marcus Chu, CEO of APAC Realty and ERA Asia Pacific, recognizes AI as a golden opportunity to differentiate his company and agents from the competition. He eagerly seized the chance to customize ChatGPT into Sales+, the company’s agent-focused app, when it launched globally in late 2022. With an investment of S$5.2 million (US$3.9 million) in technology tools, including ChatGPT, ERA’s agents can effortlessly generate property listings, emails, and blog posts tailored to their desired length and tone using automated guidance.
Chu highlights the significant improvements in productivity levels enabled by ChatGPT, resulting in better client service. He firmly believes that AI has added substantial value to their agents and that it has the potential to benefit the real estate industry as a whole. ChatGPT, developed by US start-up OpenAI and released in November 2022, is an AI chatbot built on a large language model (LLM) that employs deep-learning algorithms to recognize, summarize, translate, predict, and generate text based on vast amounts of knowledge acquired from extensive data sets. Its versatile capabilities enable it to answer questions, compose written material, and even generate software code.
Chu emphasizes that while most agents excel in communication, they may lack natural writing skills. Nonetheless, their profession demands spending numerous hours preparing written materials. The Sales+ app has revolutionized this aspect by generating event invitations, personalized festive greetings, tenancy reminders, and agent biographies. Furthermore, all content can be customized and translated to cater to the language used in the country where the agent operates.
Ryan Li, partner of management consulting at KPMG China, affirms that the application of ChatGPT may lead to a reduction in low-skilled jobs in the real estate industry. Nevertheless, it can also enable practitioners to focus on higher-value creative activities, driving innovation and improving efficiency. Tasks like property description and display, answering frequently asked questions, and market analysis, which are standardized and repetitive, are prime candidates for replacement by intelligent robot tools like ChatGPT. Conversely, activities such as price negotiation, client research, and service customization necessitate interaction, critical thinking, and decision-making, where human agents excel.
ERA Singapore, with over 8,700 agents, has witnessed significant success with the Sales+ app. Since its March launch, the ChatGPT feature has been accessed over 66,000 times by more than 3,300 unique users, indicating its popularity. Plans are already underway to roll out ChatGPT features to all ERA APAC offices in June. With agents now saving time, they can invest more of it in cultivating relationships with customers and strategizing on improving their sales conversion rates.
Centaline Group, the operator of Hong Kong’s largest property-agency network, is also contemplating the adoption of ChatGPT. Founder Shih Wing-ching acknowledges that property agents do not require extensive knowledge, as even secondary school graduates can enter the field. However, the industry demands specialized knowledge of various ordinances and unique situations. Shih believes that AI can enhance agent capabilities by helping them read and process legal documents, provide richer and more accurate answers, and reduce costs associated with employing multiple individuals to answer different questions.
Nevertheless, Shih emphasizes that Centaline has yet to implement AI fully. When it does, the agency’s aim is not to replace agents but to assist them in their work, enhancing the accuracy of service and offering a broader scope of assistance at a reduced cost.
Midland Realty has embraced AI in various aspects of its operations. The agency utilizes artificial intelligence for statistical market analysis, client data analysis to predict trends and provide personalized recommendations, automation of business procedures, letter writing, sales brochure analysis, sales proposal preparation, video production, and the provision of question-answering chatbots. Additionally, the agency has organized 25 AI courses, attracting over 2,000 attendees as of June 2.
Chinachem Group, a major Hong Kong developer, plans to introduce two AI-enabled applications. The first is a corporate version of ChatGPT that will enhance efficiency and free up time for creativity among their colleagues. The second is an AI image generator aimed at streamlining the process of generating required building-design images and reducing repetitive work.
In mainland China, where ChatGPT is currently unavailable, KE Holdings’ property platform Beike has developed the Xiaobei AI-Assistant, an intelligent online tool designed specifically for agents. This tool offers online simulations to train agents in showing properties before they venture into the field. It also provides property recommendations, conversation tips, performance evaluations, and tailored training. The Xiaobei AI-Assistant has already provided 136 million help suggestions and delivered performance diagnosis reports to 73,325 agents.
While the potential benefits of AI in the real estate sector are promising, experts emphasize the importance of addressing its limitations and associated risks. Implementing measures to monitor and manage legal and ethical risks during the design and implementation stages is crucial, according to international law firm DLA Piper.
For instance, China’s recent draft measures on regulating generative AI will impact companies that use AI for customer services, valuation reports, or market analytics. Furthermore, companies utilizing customer data in AI systems must comply with data privacy and cybersecurity rules. To avoid bias and discrimination in AI systems, steps should be taken to minimize inaccuracies and potential breaches of anti-discrimination laws that may arise from matching sellers and buyers.
Weng Guanxing, head of Wintell & Co’s Lingang Office, a Shanghai-based law firm, emphasizes that the underlying algorithms of artificial intelligence must incorporate screening and statistics based on big data. By analyzing extensive historical data, AI can predict future market trends and guide decision-making within real estate companies. However, legal frameworks and regulations may hinder companies’ ability to gather the vast data sets necessary for ensuring accuracy. For example, China’s Personal Information Protection Law and Data Security Law, enforced in 2021, have increased the legal risks and costs associated with collecting personal data.
Laura O’Connor, Chief Operating Officer of US-based brokerage JPAR Real Estate’s affiliated network, acknowledges that while ChatGPT can save agents time by replacing some tasks, AI technology has a long way to go before attempting to fully replace agents. JPAR Real Estate utilizes ChatGPT similarly to its counterparts in Hong Kong, focusing on leveraging emerging technologies to enable agents to provide reliable and prompt feedback to customers. By reducing time spent on routine tasks, agents can redirect their efforts toward understanding and meeting the needs of homebuyers.
Despite the ongoing efforts to digitize the traditional real estate industry, the process of checking and signing real estate sales contracts remains a realm where complete digitization is not yet possible. Additionally, while agents may not be essential to property deals from a technical standpoint, they bring value by facilitating and smoothing the process for all parties involved.
Nevertheless, AI is making strides in the property search. Two prominent US real estate brokerage groups, Zillow and Redfin, have recently launched their own ChatGPT plug-ins, allowing users to interact conversationally while filtering property listings. For instance, users can request to see homes within a specific price range, like “Show me homes in the US$475,000 price range.”
Despite public anticipation of AI capabilities, there remains a significant gap between perception and reality. Home seeker Kary Yang in Hong Kong experienced disappointment when using ChatGPT for her property search. Although she subscribed to ChatGPT’s pro version and sought assistance in identifying a HK$5 million flat (US$638,000) in Hong Kong’s Southern district, the bot provided general advice and failed to offer specific property recommendations. Yang concluded that AI could not replace property agents—a sentiment echoed by many.
Conclusion:
The rise of ChatGPT and other AI services in the property industry marks the beginning of an era of AI experimentation. While it may not replace property agents entirely, AI technology presents opportunities for increased productivity, improved client service, and the automation of standardized tasks. However, companies must navigate legal and ethical challenges to ensure compliance and mitigate risks. The successful integration of AI in the market requires a balance between leveraging its advantages and addressing the industry’s unique requirements and regulations.
