CoreLogic analytics experts are mapping the ‘genome’ of Australian dwellings, giving consumers and property professionals information designed to help them make wise property decisions.
For many Australians, choosing which property to buy can be one of the most important financial decisions they’ll ever make. And to help make sure their choice is the right one, home buyers – and the professionals who support them – need access to meaningful information about the property in question.
That’s why CoreLogic is on a mission to digitise Australia’s residential property landscape. Like the pioneers that sequenced the human genome, CoreLogic’s analytics experts have set out to map the DNA of residential properties across the country.
Identifying the genomic string
Leveraging billions of property records, including interactions between buyers, sellers and property professionals, CoreLogic has harnessed the power of artificial intelligence (AI) and machine learning (ML) to identify and record the key features of individual properties across Australia. This helps to assess each property’s liveability, insurability and overall value.
James Vaughan, CoreLogic’s Senior Leader of Industry Solutions, said, “Properties are both extremely homogenous and vastly different, and the features of properties themselves and the environments surrounding them can change frequently. But by stitching the key attributes of a property, we can build predictive models that buyers and industry professionals can use to guide their property decisions.”
While all properties share common features, the composition of these features is what makes each property unique. CoreLogic has identified a series of building blocks, known as the Core 7 attributes, that make up each property’s specific ‘genomic string’:
- property type
- land size
- building area
- number of bedrooms
- number of bathrooms
- number of car spaces
- year built.
Through partnerships with various tech powerhouses, CoreLogic extracts and analyses property data from thousands of sources. Cloud-based delivery services enable the integration of this data into valuation models, which CoreLogic uses to predict property market trends.
And with its recent investment in AI, ML and cloud infrastructure, CoreLogic now translates this data into digital property DNA, which can be shared with property buyers and sellers.
“We’ve built a pipeline that collects unstructured data and turns it into truthful, meaningful and useful information,” James said. “By digitising this DNA right down to the nuts and bolts that make up each property, we can provide data designed to help people find the right home.”
During 2020, CoreLogic applied AI image recognition and ML feature extraction to expand its coverage of the Core 7 attributes by a staggering 23% nationwide. As a result, CoreLogic now has at least one attribute recorded for 100% of Australian dwellings, and five to seven attributes for 93% of dwellings. This makes it possible in most instances to research and compare an individual residence against the entire market.
“The Core 7 features are the ones most commonly used by agents when they’re listing properties or looking for comparable sales,” said James. “When you have this genomic string at your fingertips, it becomes much easier to determine a property’s value with a higher degree of accuracy.”
Supporting better property decisions
When developing its 2019 Perceptions of Housing Affordability report, CoreLogic asked 2,220 Australians which factors were most important to them when considering a property purchase. And by piecing together a property’s DNA, CoreLogic analysts can also equip consumers with tools that designed to give them the answers they need.
For instance, home buyers can calculate estimated commute times, proximity to amenities and other lifestyle factors, while investors can check estimated rental returns and capital growth potential.
James commented: “Our role is to pre-empt questions that first-time buyers or people looking to make their next move may have, such as ‘How do I use my equity to downsize?’ or ‘Do I renovate or do I sell?’ Our tools are designed to support liveability, so consumers can filter by the attributes that matter most to them.”
And of course, this data has enormous potential throughout the property industry as well. Real estate agents can view recent and historic sales (where that data is available) or work towards strengthening their listings by accessing property attributes in real time. Meanwhile, lenders and brokers can use our tools and data to help them make instant decisions on electronic mortgage applications, underpinned by meaningful estimates on a property’s value and loan suitability. And with automated rebuild estimates, insurers can provide useful guidance to homeowners on their insurance premiums.
“Banks and property specialists need detailed and up-to-date information to guide their decision-making,” said James. “In my opinion, the more data available, the better the outcomes will be for businesses and their clients – from meaningful valuations and risk pricing to faster sales and a positive client experience.”
Bespoke industry solutions
CoreLogic’s industry clients are already discovering the benefits of digital property DNA. One example is Athena Home Loans, an agile direct-to-consumer lender whose value proposition centres on helping home buyers make informed property decisions.
“The Athena team came to us with a problem statement around how to set national home-lending risk appetite statements and manage them moving forward,” James said. “We looked at common risk factors that cause loans to be declined – such as falling property prices and oversupply of housing stock – and used AI and ML to develop an auto-decisioning process.”
Partnering with CoreLogic enabled the Athena team to approach their problem from a different angle and devise a solution that didn’t yet exist in the marketplace. This solution now underpins Athena’s digital-first strategy and customer service focus.
James commented: “Athena wanted to take as much friction out of the process as possible to make sure their customers get really insightful information. Our property DNA provides the granular information they need to help make sure these decisions are the right ones now and in the future.”
Looking to the future
As CoreLogic continues pursuing its vision to map the DNA of every Australian residential property, the team are also gaining further insights into the needs of homeowners and investors. This involves systematically evaluating the coverage, sources and recency of the data they receive, so as to identify gaps in their knowledge base.
For instance, the team’s current ‘Property Bureau’ project focuses on the digital DNA of properties with greater risk metrics, such as proximity to coastal erosion. The team also produces specialised liveability metrics such as transport times, green ratings and energy efficiency, to further support clients on complex property decisions.
“We’re always looking for new ways to unlock greater value for Australians and support them with their property needs,” said James. “If our clients or industry partners would like us explore any other digital property DNA elements that we haven’t yet considered, we encourage them to get in touch with us to discuss the possibilities.”