Future gazing on real estate transactions research from Oxford University
The University of Oxford Research has recently released a report – The Future of Real Estate Transactions, and here’s a summary of the report from one of the authors, qualified surveyor Professor Andrew Baum.
With a lot of comment in the industry about the potential ‘disruption’ of innovative technologies, the aim of this report is to highlight the reality of the situation. A key message throughout is that many start-ups and critics focus too heavily on the adoption of novel products, as opposed to understanding why existing processes are done the way they are, and the social and regulatory change which needs to occur to alter any embedded practice.
This report approaches the issue of technological disruption very differently. We first look at the existing causes for delay within the end-to-end commercial transaction process, before highlighting whether these are issues of governance, habit, or functioning, and which, if any, could be streamlined through the intervention of technology. We explore the opportunities for applicable technologies such as Blockchain, Automated Valuation Models (AVMs), Artificial Intelligence (AI) and Machine Learning (ML), Internet of Things (IoT) and Building Information Modelling (BIM), and most importantly, the barriers they face to normalisation.
Our findings are numerous, drawn throughout the report. Interesting to note is that we find the preparation and marketing phases of a transaction will be the easiest to disrupt and accordingly can be expected to decrease in length. The due diligence phase currently has the most blockages and a lack of imminent technology solutions. Therefore, an increase in the due diligence speed of any commercial transaction cannot be expected any time soon. The largest barrier currently facing any technology is the lack of standardised digitalised data.
Our conclusions turn us towards the idea of a property passport as the biggest enabler: an openly accessible, single pool of up-to-date, standardised property information. However, for such a product to exist in the form envisaged, the nature of caveat emptor or buyer beware will have to be navigated. In the absence of any near term blockchain solution offering ‘a single point of truth’, this could potentially be achieved through innovative insurance offerings. In any case, such an innovation will require collaboration and investment across many sectors of industry, government, owners and technology providers to establish digital data standards and ownership laws, and any meaningful ‘disruption’ will be slow.
This article was originally published in issue 34 of Property Professional, our exclusive members’ magazine, visit the join section to learn Property Professional and the other membership benefits. Members can download digital copies of Property Professional from the online shop.
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