Harold Geneen, a well-known American businessman, once said, “Uncertainty will always be part of the taking charge process.” Real estate professionals may relate to this since uncertainty is present in all aspects of their work. Such as uncertainty in operational costs, customer demands, market trends, resource availability, and risks from natural or man-made crises.
For instance, the Russia-Ukraine war has had a massive impact on the real estate sector. The construction industry has been under great financial strain due to rising petroleum prices and supply chain disruptions. The skyrocketing prices of building materials have also caused cost overruns in numerous construction projects.
This is happening just as the industry is recovering from the effects of the COVID-19 lockdown. When COVID-19 hit the world, its impact on this industry was enormous. As per the reports published by McKinsey, 66% of counties in the US have reduced or postponed infrastructure maintenance, while 54% have reduced or delayed new infrastructure projects in the last two years. The struggle for Realtors is REAL.
All these impacts, as mentioned earlier, could have been brought under control with just one solution being used enormously: The Big Data.
Anurag Shrivastav, CEO and Founder of Lumenore, says in interaction with Zee Business that in India and many other countries, deadlines for assigned work in the real estate industry are hard to match. As a result, customer expectations could not be fulfilled. However, countries like the US follow consistent processing and utmost reliability. Customers are given several options based on their selections; the developers also give them the exact workforce schedule, timeframe, materials, and automation process schedule. They never face such challenges in completing their process right on time. This is made possible because they are good with data collection and opt for the right software solutions meant for real estate.
The real estate industry generates a considerable volume of data. In this sector, utilizing the data to yield more profit is essential, especially when staying rigid in the crowded market is challenging. Here, the data is scattered. Hence, the data must be consolidated and taken through various processes, including data lineage, creating a data lake, and data engineering. Solutions offered by Lumenore, such as building Data Universe, help in taking care of all these processes and preparing data ready to derive values from it. The insights produced from the Data Universe can help real estate professionals understand where to buy a property and when to start development without wasting time, money, and effort.
When interacting with ETCIO, Naren Vijay, EVP-Growth, Lumenore, said resource prices are frequently changing. But a substantial amount can be saved by ordering at the right time and from the right place. This can be made possible with the help of big data analytics, building a Data Universe, and helping them optimize the cost of construction.
Take a look at the crisis mentioned earlier. The Ukraine-Russia war severely affects trade routes and geopolitical alliances, influencing supply chains. This impacted a shortage of resources and increased costs. If the developers had been able to analyze the current market situation and make instant decisions to select the best resources, the losses would have been drastically reduced. Forecasting the demands and procuring materials in advance would lower the loss. The same could have happened when the lockdown was imposed worldwide with the onset of COVID-19.
Both of the situations might look different. However, when examined closely, data connected the two instances. The sector could have overcome the challenge if data had been used well. In-depth analysis of expenses, competition mapping, risk forecasts, and supply chain management could have all been done well using the data generated in this industry. Here, having an end-to-end data solution along with powerful Business Intelligence (BI) for real estate could change the current game. A BI customized for the CRE portfolio can help understand the market trends, foresee risks, and predict the demands. It gives valuable knowledge and reflects missed chances when not thoroughly or accurately interpreted.
The instantaneous and contextual information generated based on current conditions and future estimates can help commercial real estate businesses plan for potential shortages and find new, more efficient ways to overcome uncertainties. Using big data analytics and the right software solutions meant for real estate to predict demand for products and services may help investors and developers place orders with the right vendors at the right time. Advanced BI solutions such as predictive intelligence for real estate have taken hold in the industry. This can use historical data, machine learning techniques, and statistical algorithms to predict future events and make better business decisions in advance.