Buying and selling houses is right up there with death and divorce on the list of life’s biggest stressors. Part of the reason for this is the uncertainty, especially when it comes to price. Both buyers and sellers lose sleep over what a property is worth, and despite its central role in the transaction, accurately valuing properties can be hit and miss.
The reason for the latter, according to property market veteran John Kennedy, is that the information currently available to those valuing properties is fragmented and unstructured, which makes it time-consuming to do and difficult to be accurate. However, he expects his new Independent Property Price Index, which provides valuations in minutes, to change this.
Kennedy is an engineer who worked for Intel before striking out on his own 20 years ago to apply his IT skills to the property sector. His company, 4 Property, employs 11 people and provides a range of technology and market intelligence solutions to the industry, including the Independent Property Price Index (iPPi), which goes on general release in January. The iPPi will bring a new level of insight, transparency and accuracy to property valuations in Ireland, according to Kennedy.
“iPPi is the cleanest and most comprehensive property market database currently available and it will increase the understanding of and add context to the Irish housing market,” he says. “It provides openness around property transactions and around the performance of the market both on a day-to-day basis and over time. This in turn enables estate agents to produce much better valuations for their clients.”
iPPi is based on a matrix of data compiled from multiple local and national sources and presented to the company’s B2B customers – mainly estate agents – on a single screen. Users can log on to the platform to make quick comparisons between properties while also getting access to relevant maps and photos. It also shows them sold history reports and real-time market reports for their local areas and gives them information about how long a sale has taken to close.
For users, iPPi is a simple to follow step-by-step process. However, whirring away in the background is the brains of the system, or what Kennedy describes as the “innovative elastic search technology stack”, which combines machine learning and AI to introduce greater accuracy and speed into the valuation process. It was developed in conjunction with data analytics expertise from UCD’s Quinn School of Business, and 4Property is now based at the university’s newly extended Nova innovation hub at Belfield.
‘Unparalleled insights’
“In summary, iPPi is a novel property data, analytics and valuations platform that provides unparalleled insights into what’s happening within the Irish property market,” Kennedy says. “It will allow property professionals to determine trends and current market conditions for residential properties in all areas of the country, from county and city level right down to village and individual street level, using measures such as number of bedrooms and property size. It may also go some distance to explain anomalies such as why there is a difference in valuations between houses on the same street.”
At other points in his company’s history, Kennedy has launched a service called Find A Home, which dealt with off-campus accommodation for students, as well as building a property rental portal and developing his company’s flagship Acquaint CRM, which is aimed at estate and letting agents.
Having seen the property sector from all sides, Kennedy knew where the gaps were, and to some extent iPPi was born out of his company’s frustration with certain aspects of how the property sector does business. At an administrative level there was frustration with how manual processes still dominate in most estate agents’ offices, while at an operational level Kennedy says there was frustration about the lack of independently supported information about what was really going on in the property market.
“Phrases such as ‘The average price of a three-bed house in Ireland’ were always cropping up, no matter how meaningless that average might be,” he says. “This encouraged us to see if we could find and then collate independent data that would contribute to more meaningful valuations and assuming we could, we then wanted to put the data in one easily accessible place for our clients, which would help streamline their processes while also helping them to be better informed about the market.
“iPPi can produce a more in-depth valuation in about one-third of the time it takes at the moment and works by matching and referencing transactions on the Property Price Register with any historical reference to a property online. It then combines sale agreed prices for sold properties with geolocation data to generate a comprehensive data set that goes back to 2012.”
Largely self-financed
iPPi was soft launched in May of this year and cost about €275,000 to develop, which was largely self-financed. The company will be launching a funding round in 2020, but its scale remains undecided at this point as Kennedy says a decision has yet to be made on whether to move into the UK and Europe separately or simultaneously.
Kennedy says what makes iPPi stand out in its home market and will also make it scalable and applicable to other markets is its innovative combination of easy-to-use technology, industry knowledge and deep data in one place.
“We trialled the product with 350 users between June and November of this year and now have 50 paying customers and anticipate a high conversion rate among the others,” Kennedy says. The platform will have its full commercial launch in early 2020 and its revenue model is a SaaS subscription based on three different price plans, depending on the size of the company using it. A sole trader will pay less than a big agency with multiple users. Estate agents are the platform’s main target market, but other potential customers include financial institutions, government agencies, REITs (real estate investment trusts) and property developers.
“What we’re doing is very industry-centric and it captures all of the data in relation to a property that would normally be lost when it’s sold and the listing is taken down,” Kennedy adds. “Estate agents will still have to do the physical walk-through of a property, but we’re structuring and analysing all of the data that relates to it. The platform will give clients access to the full market picture by providing information on all agent activity. Other platforms let you see your own activity but not what everybody else is doing. We also provide valuation tools within the platform that enable agents to create professionally formatted appraisals within minutes.”
