Technology and data drive improvements in market transparency?

Transparency is something that impacts our day to day lives.  Most of us probably take for granted just how easy it is to have information at our fingertips (or should I say smartphones). Take something like shopping, how many of you have been in a shop and used your smart phone to read buyer reviews before buying goods?  Or how many have used a search engine to compare the cost of products to get the best bargain? My guess would be the majority, so how can real estate benefit from becoming more transparent through technology?

The latest JLL Global Real Estate Transparency Index shows that there has been an improvement in the availability of data on market fundamentals since 2014, some of which can be contributed to technology and the emergence of “prop-tech” companies. The Prop-tech industry offers the accessibility of property data through digital and online methods. A familiar example may be Zoopla which provides information on property listings online.

As capital allocations to real estate increase, investors are demanding more information with the expectation that the sector is as transparent as other asset classes.  Through the advances in technology and an increased demand for ‘open data’ there has been a real leap in data accessibility in real estate. The ability to be able to assess markets at a more granular level and on a more frequent basis is a real advantage for investors. A number of markets in Europe have benefitted from this, with France, Germany and the UK at the forefront, but other markets such as the Nordics are catching up rapidly.

While the UK once again tops the transparency index, Germany for the first time found itself in the “highly transparent” category and France managed to cement its position (5th) in the category this year. Contributing to the improvements in these countries is progress in the quality and accessibility of market data. Germany specifically has seen an increase in the availability of this, which has been driven by successful entrepreneurs offering property listings and the introduction of new ‘prop-tech’ companies.

The trend for more data has seen the introduction of analytic tools within the real estate market. Data spreadsheets are being replaced by more interactive and sophisticated visual tools. Traditional data providers are also seen to be adapting, a recent example of this is MSCI with the introduction of their Real Estate Analytics Portal. The results of the survey also suggest that a focus on the quantity of data in the previous Global Real Estate Transparency Index has now progressed to a focus on its quality.

Technology is so fast-moving and easily transferred that less-advanced countries can benefit and they have also made enormous advances.  Some examples include the digitisation of the land registry in both Kenya and Ecuador as well as an online centre in Rwanda for development permit applications

It is clear that technological change coupled with the need to access information quickly is something we are all benefitting from, be it in shopping or in real estate. With this fast paced change in technology, the need for more data and the emergence of “prop-tech” companies, the world of real estate will undoubtedly become more transparent.  I’m sure the 2018 edition of the Global Real Estate Transparency Survey will tell.

Technology and data drive improvements in market transparency

 

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