The integration of Artificial Intelligence (AI) into various sectors has been transformative, and the Singapore real estate sector is no exception. From facilitating remote property viewings during the pandemic to providing sophisticated predictive analysis, AI technologies are redefining traditional real estate practices.

AI or property agent?

When the AI revolution started

During the restrictive periods of the COVID-19 pandemic, AI-enabled 3D virtual tours provided a crucial pivot point for the real estate industry. This innovation allowed potential buyers to explore properties from the comfort of their homes, broadening the market for sellers and adapting to the new normal of property transactions.

Currently, the focus has shifted towards predictive analytics, where platforms like SRX, EdgeProp, PropertyGuru, 99.co, and Ohmyhome use algorithms to predict home values with impressive accuracy. This shift poses a significant challenge to the conventional roles of property agents by offering instant home valuations and property recommendations.

The development of AI tools for property research

AI tools in property research have streamlined the valuation process, which traditionally involved waiting for appointments with official valuers. Now, users can receive instant updates and valuations at the click of a button. (The screenshots below used to illustrate instant home valuations and updates are from two different users, hence the different addresses.)

Pros and cons of AI tools

Pros of using AI tools

1. Efficiency: AI provides quick access to property valuations and market analyses.
2. Accessibility: These tools are available around the clock, enhancing convenience for users.
3. Cost-effectiveness: AI reduces the costs associated with traditional property transactions.
4. Data-Driven Insights: Offers unbiased and comprehensive market insights.

However, the reliance on AI brings up essential questions about the future role of human agents in the industry.

Cons of using AI tools

1. Personalisation: Lacks the tailored advice that human agents offer.
2. Understanding Nuances: May not fully capture the specific needs and preferences of users.
3. Error Potential: AI algorithms are susceptible to inaccuracies based on data quality.
4. Emotional Intelligence: Unable to grasp the emotional dynamics of property transactions.

Property agents: A necessary balance?

The CNA Leadership Summit 2023 — Trust Matters on ‘Building Trust With Your Customers’ with (From left) Paul Burton, General Manager, IBM Asia Pacific, Christopher Ong, Managing Director, DHL Express Singapore, Rhonda Wong, Founder & CEO of Ohmyhome.

Despite the advances in AI, the human element remains indispensable in certain aspects of real estate. Property agents not only provide personalised service but also understand the emotional and complex nature of property transactions, which AI cannot replicate. However, the stigma around agents being driven by commissions highlights a broader issue of trust in the profession.

Pros of engaging property agents

1. Personalized Service: Agents provide bespoke guidance tailored to the unique requirements of each buyer and seller.
2. Expertise and Experience: Agents contribute deep market knowledge and robust negotiation prowess.
3. Emotional Intelligence: They possess the ability to empathize with clients and understand the emotional dynamics of transactions.
4. Contextual Understanding: Agents excel at interpreting complex details and preferences, offering tailored advice.
5. Negotiation Skills: With their experience, agents effectively advocate on behalf of their clients’ interests.
6. Face-to-Face Interaction: Direct personal interactions with agents help build trust and rapport.

Cons of engaging property agents

1. Limited Availability: Agents might have restricted availability, which can delay communications and assistance.
2. Subjectivity: Recommendations and opinions from agents may be colored by their personal biases.
3. Potential Cost: Engaging an agent usually involves commissions or fees, which can elevate the total cost of transactions.
4. Dependence on Expertise: The quality of service is heavily reliant on the individual agent’s skills and experience.
5. Potential Conflicts of Interest: Agents might sometimes place their own interests above those of their clients.
6. Reliance on Manual Processes: Manual methods used by agents can slow down transactions and introduce errors.

Case study of a home valuation by AI

To illustrate, a comparison of AI valuations for a 4-room HDB flat in Toa Payoh Central showed significant variances among different platforms.

4-room resale HDB flat (818 sq ft) in Toa Payoh Central

SRX — X-Value Home Report: $744,000

99.co — Property Value Tool: $744,000

PropertyGuru — Property Valuation Tool: $799,634

EdgeProp — Edge Fair Value: $760,000

Ohmyhome — Homer AI: $777,000

The latest sale of a 4-room flat in the same block, which fetched $788,000 in December 2023, saw the valuation from Ohmyhome’s Homer AI aligning most closely with this transaction. In contrast, the estimate from PropertyGuru was slightly over the mark, while those from SRX, 99.co, and EdgeProp fell below it.

A general guideline in property valuation is to align closely with recent transaction prices within the same HDB block, condo development, or nearby area. Setting your property’s price too high might deter potential buyers, while undervaluing it could result in a financial loss. Such discrepancies underscore the need for a cautious approach when relying solely on AI for property valuations.

The future of real estate

Choosing between AI tools and human agents depends on individual preferences for efficiency versus experience. While AI offers convenience and rapid data processing, human agents provide depth, emotional understanding, and negotiation skills that are crucial in complex transactions.

As the industry evolves, the blend of AI and human insight seems to be the future trajectory. While younger, tech-savvy generations may lean towards AI, the nuanced understanding of experienced agents will remain valuable, especially in sensitive scenarios.

AI is undoubtedly transforming Singapore’s property market, making it more efficient and accessible. However, the choice between AI and human agents will likely depend on personal preferences and the specific demands of each transaction. As both technologies and professional roles develop, the real estate sector must adapt to embrace the best of both worlds, ensuring that technology enhances, rather than replaces, the human touch.

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