Machines switch to disrupting property valuers

By John Thornhill

Property investors appear to be the mirror image of Oscar Wilde’s cynic: they know the value of everything and the price of nothing.
Everyone in property obsesses about theoretical valuations — developers, bankers, estate agents, insurers and ordinary housebuyers. But, as any homeowner desperate to complete a sale knows, the only true measure of a property’s worth is the price someone else will pay for it. That is still mostly determined by those capricious emotional twins greed and fear.
The pioneers of big data are promising to revolutionise the property valuation business, nudging it further along the spectrum from art towards science. By providing quicker and more accurate valuations derived from masses of data sets, they claim to offer greater confidence for all. A better informed market should be a more rational and efficient market.
Some appraisal companies, such as Hometrack in the UK, have been providing banks with near-instant automated valuations for residential properties for years. This has enabled banks to cut costs and improve customer service by offering quicker mortgage decisions, sometimes within two minutes.