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Speaking at the NAREDCO Abu Dhabi Real Estate Conference, Parneet Sachdev, Chairman Real Estate Regulatory Authority shared his views on the rise of AI and how the Real Estate agency industry can leverage it. The event which took place at the heart of Abu Dhabi, had participants and leaders from around the world who gathered to discuss the future of urban development and real estate. They discussed about topics regarding sustainable housing solutions to innovative urban planning, and more.
A McKinsey report highlights that achieving net-zero targets, especially given real estate's significant contribution to carbon emissions, necessitates an annual compound annual growth rate (CAGR) of 20 to 30 percent. Such growth is unattainable without the adoption of disruptive technologies, with artificial intelligence (AI) being at the forefront. The critical question is no longer whether AI will be integrated into the industry but rather when and how this transformative technology will be implemented to drive sustainable progress.
The question of “whether” is over now. Therefore, the adoption has been good. Now the point is there are essentially three different kinds of AI, which include weak AI, strong AI, the super AI and Super AI have not been developed yet. Therefore, the weak AI essentially is not really weak; it is artificial intelligence that is tailored specifically to complete smaller tasks. Also, it is not generative as it does not generate original content, but it gives you great insights into the content that you are doing already.
An agent is essentially artificial intelligence software that does a specific job. 2024 is the rise of the agents. Let us look at how agents work specifically artificial AI agents. Recently, Microsoft has launched 10 extra agents and one of them is the agent on financial stability. The agent will analyze a host of data and go into the financial stability of an organization of a place.
Global AI agents are going to add 80 billion dollars in the next couple of years in the economies and India is one of the three countries in the world that have been certified as AI ready. China leads the global race in artificial intelligence, followed by the United States in second place and India in third. Despite having a significant workforce engaged in AI development, India has also achieved recognition for being "AI-ready" within the industry, underscoring its growing potential and capabilities in this transformative field. AI is making waves in real estate segment and let us look at how RERA’s AI assistant can help today.
AI is not just the chat box that is visible but it is an independent agent that learns with every experience. The AI assistant will speak to you as it is tailor made to you and each time you interact it will learn more and will be exposed to a host of data. It is a large amount of data so you will get a human plus experience and these Generic agents exist. All we need to do is organize ourselves and have a tailor made agent to a regulation. And these agents are already coming into the real estate, into the top companies of the world. And, now these are some of the apps which are just off-the-shelf apps and you do not need to use them, but you can explore them. These are very good apps and there is one important aspect of AI in RERA.
Let us look at an example, where a person wants to invest in a property, but does not know anything about agreements, or anything else. All he has to do is tap into the RERA AI and say “I want to invest here” and in one moment the RERA agent will pull up the agreements which are being done by that builder, pull up all the data about that builder and tell him that look this is the record of this builder, these agreements are either in tune with RERA standards or not in tune with RERA standards, this is the issue, these are the market prices, these are the details and take a decision based on this. Now, how beautiful is that and now we are on the cusp of that technology.
We are essentially into both development and regulation and the most important question that we face is granting speedy licenses versus ensuring financial stability. During the presentation of the director-general of UAE, he said that we have ninety-one percent of ownership of apartments and homes in UAE and our rate of default is almost negligible and the reason he said that is because the financial stability is analyzed well.
Today, RERA is spread across the country. If you do not have adequate knowledge or infrastructure or the legal framework to analyze financial stability then there are only two ways. You can either approach the Indian Revenue Service officers or you have an AI agent who will work for you. So, according to me an AI agent would be a better idea.
AI has huge ability to detect Fraud and forgery and let us look at how AI works in such cases. AI has in its repertoire a very large amount of authenticated data. It learns every time from that data. It is similar to ChatGPT, every time you ask a question to ChatGPT, it learns one more fact about you. Therefore in a day it learns a millions of transactions and it gets better day-by-day.
This is fundamentally about a straightforward yet impactful application: fraud detection. It is particularly relevant and valuable for a RERA chairman, aiding in ensuring transparency and integrity in real estate transactions.
RERA is the real estate regulator of India. RERA’s AI named Alice maintains data on tens of thousands of projects and builders of real estate. The chairman of RERA, apart from other tasks monitors any potential fraud by builders.
For instance, if we were to ask Alice to share information about a real estate project located in the red zone, her response might be as follows:
“Sir, project plumb estate in New Delhi is likely to default in the coming six months.” And if we were to ask the AI how it arrived at that conclusion, it would respond as follows:
“Look at the data. They are signing an MOU with another firm giving away important rights to them. Promoters are secretly exiting their stake and some contracts with suppliers are being cancelled. Their QPR reports show static progress for the last two quarters. This is excellent information for the chairman who now proceeds to take corrective steps.”
Therefore, this is a capability that remains beyond our reach at present. We receive tens of thousands of QPRs, and there is no feasible way to manually review them all. We lack both the time and the expertise to do so effectively. However, our AI-powered solution will address this challenge by providing predictive analysis, leveraging AI's strength in forecasting trends and outcomes. This will enable more efficient and informed decision-making.
Another instance of AI Agent is Erica – the virtual financial assistant. Bank of America has this AI agent now that answers all queries like human and the subscriptions have increased to 2.2 million per. This is the scale we are aiming for, enabling us to reduce costs and enhance efficiencies significantly. By adopting this approach, we can avoid the need for massive investments, such as spending a thousand crore, and instead progress incrementally, learning and adapting throughout the process. This strategy aligns with the projected global market growth, where AI agents are expected to reach a valuation of $1.8 trillion within the next two years. Hence, it is not a technology that is going to arrive in the future but it is already at work.
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