** *ChatGPT makes changes in the Asian real estate.*

Photo: South China Morning Post

HONG KONG:

In the city of the future, a citizen looking to buy a home will simply explain their requirements to an artificial intelligence assistant, which will handle the entire process of selection and purchase without the involvement of a human real estate agent - and without the commissions that such agents receive. Well, maybe.

While real estate agents—a small army of over 40,000 in Hong Kong—may wonder if their jobs are at risk due to the emergence of ChatGPT and other AI services, the aforementioned vision remains science fiction. As the real capabilities and limitations of ChatGPT and similar technologies become clearer, concerns that AI will replace millions of workers overnight seem exaggerated, at least for now.

However, an era of experimentation with artificial intelligence has begun in various sectors, with companies investing in exploring the potential benefits and risks of this technology, as well as how it may impact their business. Real estate is no exception.

Using ChatGPT in real estate

For example, Marcus Chu, CEO of ERA in Singapore and the Asia-Pacific region, sees AI as a golden opportunity to differentiate his company and its agents from competitors. "When ChatGPT was launched worldwide at the end of 2022, it became the main topic of conversation in the tech world, and we immediately seized the opportunity to customize ChatGPT for our application, known as Sales+, for our agents," said Chu, who is also the CEO of APAC Realty, the parent company of ERA in the Asia-Pacific region.

APAC Realty holds exclusive rights to the regional master franchise of ERA in 17 countries and territories in the Asia-Pacific region, granted by the American real estate services group Anywhere Real Estate, formerly known as Realogy Holdings Corp. The company has invested $5.2 million in technology, including ChatGPT.

With the help of the AI-based platform, ERA agents can quickly and easily create property listings, emails, and blogs of the desired length and style using automated guidance. "We are seeing a significant increase in productivity, which means better customer service," said Chu. "I believe that ChatGPT has greatly enhanced the value of our agents, and that AI can benefit the real estate industry."

According to industry leaders, some aspects of buying or selling real estate still require the presence of an experienced expert; however, AI can participate in the process. ChatGPT is an AI-based chatbot built on a large language model (LLM) developed by the American startup OpenAI and released in November 2022. LLM is a deep learning algorithm that can recognize, summarize, translate, predict, and generate text and other content based on knowledge obtained from massive datasets. Thus, it can answer questions and assist with tasks such as writing texts and even programming.

Chu notes that most agents, while they may be good speakers, are not "natural writers." Nevertheless, their work requires many hours of preparation for written materials. The Sales+ app can generate event invitations, personalized greetings, reminders for housing submissions, and agent biographies. All content can also be customized and translated into the language used in the country where the agent operates, said Chu.

"The use of ChatGPT may lead to a reduction in the number of low-skilled jobs in [real estate], but it will also allow practitioners to focus on more creative, high-value activities that stimulate innovation and improve efficiency," said Ryan Lee, a partner at KPMG China. "Standardized and routine tasks, such as property descriptions and showings, answering frequently asked questions, and market analysis, are likely to be replaced by intelligent robotic tools like ChatGPT." Tasks such as price negotiations, researching client needs, and customizing services require more interaction, critical thinking, and decision-making, Lee added.

In ERA Singapore, there are over 8,700 agents, and by the end of April 2023, the Sales+ app had been downloaded nearly 14,000 times on various electronic devices. The capabilities of ChatGPT in the app have been utilized over 66,000 times since its launch in March by more than 3,300 unique users, according to the company's statement. ERA Singapore is also the largest international real estateagency in Singapore, operating in 11 countries across the Asia-Pacific region with a total of over 23,000 agents. Plans are already in place to implement ChatGPT features in the app for all ERA APAC offices in June. By freeing up time, agents can spend more time with clients, said Chu.

The use of AI in other companies

Centaline Group, which manages the largest network of real estate agencies in Hong Kong, is also considering the use of ChatGPT, according to founder Shi Wing-ching. "Real estate agents can be high school graduates," Shi said. "Since this is not an industry with guaranteed income, the level of knowledge among real estate agents is not high." Artificial intelligence can help agents read and process legal documents and provide more useful and accurate answers, Shi noted, adding that the business requires specialized knowledge of many laws and specific situations. "There are many aspects," he said. "Some of them are legal. Some are financial. Using different people to answer different questions incurs significant costs." Shi emphasized that Centaline has not yet implemented AI. When it does, the agency will aim to "not replace, but assist" agents in their work and "improve service accuracy" by providing a wider range of services at a lower cost, he said.

Midland Realty uses ChatGPT to analyze market statistics and customer data to forecast trends and provide personalized recommendations; automate business processes; write letters; analyze sales brochures; prepare sales proposals; produce videos; and provide chatbots to answer questions. The company has conducted 25 AI courses with over 2000 participants as of June 2nd.

Chinachem Group, one of the largest developers in Hong Kong, plans to launch two AI-based applications: "a corporate version of ChatGPT to assist our colleagues in working efficiently and freeing up time for creativity, as well as an AI-based image generator to simplify the process of creating necessary building images and reduce routine work," a representative said.

In China, where ChatGPT is not available, the real estate platform Beike, owned by KE Holdings, has developed an intelligent online tool called Xiaobei AI-Assistant specifically for agents. Before going out into the field, it offers online simulations that train agents in property showings. On-site, it provides property recommendations and conversation tips. After completing a task, it evaluates the agent's performance and offers personalized training. In 2022, the tool provided 136 million pieces of advice and generated 73,325 performance reports for agents.

Limitations and risks of AI

The benefits that AI can bring to the real estate sector look promising, but experts warn about the limitations and risks of the technology. It is important to implement measures to control and manage legal and ethical risks during the design and implementation stages, according to the international law firm DLA Piper.

For example, China's recent regulatory measures regarding generative AI will be relevant for companies using AI to provide services to clients or to create cost reports or market analytics. Companies that provide customer data to AI systems must also comply with regulations on data protection and cybersecurity.

In addition, it is necessary to take appropriate measures to avoid bias and discrimination in AI systems, such as bias in matching sellers and buyers, in order to reduce inaccuracies and prevent violations of anti-discrimination laws. "The core artificial intelligence algorithm should include selection and statistics based on big data," said Wen Guanshin, head of the Wintell & Co office in Shanghai. "Artificial intelligence can predict future market trends by analyzing a large amount of historical data, and then..."