transitioning the valuation industry to an ... - spb.sa.gov.au · the valuation firms assume the...
TRANSCRIPT
Transitioning the valuation industry to an efficient global ecosystem
Property Obsessed Nation
The average Australian "only" spends on 2.5 hours per week focused on the property market
• exercising at the gym (1.08 hours)
• speaking to their parents (0.88 hours)
Spends twice as much time researching property, as;
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Ok so let me see a show of hands of who here has searched their property online in the last week? HSBC has conducted research across 10 different jurisdictions to ascertain how much time adults were spending researching property. Australia ranked 7th on the list spending an average of 2.51 hours per week with the United Arab Emirates being at the top of the list at 6.6 hours. That’s not too bad right? Well that’s spend twice as much time researching property than exercising at the gym (1.08 hours) or speaking to their parents (0.88 hours). 23 per cent of Australian home owners reported that they check the value of their property every three months.
Property Price Predictors = AVMs
• Hometrack
• Domain
• Online banking Apps
• Realestate.com
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The majority of this property research is performed on property price predictors such as real estate.com, Hometrack, domain, or an online banking app which uses these products rebadged as their own.. Property price predictors are what we Valuers term Automated Valuation models or AVMs… Automated valuation models use sales price data, property characteristic databases and algorithms to determine the price of a property. There is a trust issue however with online property price predictors with a huge difference between providers.. And banks are starting to lend on these figures. Where there is an issue of trust there is a use case for blockchain.
PROBLEM• Numerous inefficiencies
• Bias and inaccuracy
• Long turnaround times
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In the traditional industry it takes an average of 3 days to process a residential property valuation, it involves receiving instructions via email or a valuation management system, setting up a paper file, phoning the home owner, driving out to the property, inspecting the property, driving back to the office ,writing a 5 page report, sending it off to the bank, who then only look at the valuation figure. This frustrates mortgage brokers and in turn valuers, and I've been on the receiving end of many a phone call, "when am I going to get my valuation!, this deal is going to fall through, my client is going to auction tomorrow. In addition, these traditional mortgage brokers cannot compete with new entrants in the lending sphere such as Tic Toc homeloans, offering a 27 minute turn around time on mortgage applications, relying on AVMs for their valuations .
TRENDS1. Increase of said Automated Valuation Models (AVMs)
2. Loss of control of data and valuations
The Future of the Valuation Profession by Associate Professor Sara Wilkinson, Dr DulaniHalvitigala and Associate Professor Hera Antoniades January 2017
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As a valuer there have been Two trends stand out in the future of the valuation industry. 1. There will be an increasing use of automated valuation models or (AVMs) and 2. There will be a Loss of control of data and valuations This has been increasing prevalent with the rise of big data and the increasing computer processing power.
OUR SOLUTION• World Class Automated
Valuation Model
• Highspeed
• Blockchain valuationendorsements
• Property data marketplace
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So in harnessing the rise of big data and said processing power ValAi have utilised the latest machine learning algorithms to create a world class automated valuation model. Through our product trials we have cut the turnaround time to 3 seconds which is immediately endorsed by the valuation industry using Valai's blockchain endorsement mechanism.
OURTEAM
Tom ReedFounder
Callan SarreBlockchain Consultant
Allys ToddGeneral Manager & Business Systems Technical Lead
Alex Baigent
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Let me introduce our team. A team with a wealth of experience, we have, Allys in business systems Callan, blockchain consultant, product manager extraordinaire and Alex rounding out the team with full stack development capabilities. Also displayed are some of the companies that we have worked with and that the team have developed their skills within. We have been collaborating with the Australian Institute for Machine Learning to push the envelope on AVMs, incorporating computer vision to determine the condition of a property internally utilising real estate agents photographs and natural language processing to interpret social data, news paper articles, and ABS statistics such as crime rate trends.
Demo
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Ill give you a quick run though
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Ill give you a quick run though
VALAI PLATFORM
• Consortium blockchain
• Identity
• Decentralise valuation risk via endorsement mechanism
• Monetize siloed property data
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Blockchain is an essential component of the ValAi Platform because it provides a layer of automated trust, transparency and accountability between participants. Our plan is to create an industry-run consortium blockchain using an open-source architecture such as Hyperledger. ValAi has three clear use cases for blockchain inside the ValAi Platform: identity, endorsement, and data exchange. In the existing commercial valuation industry, banks and other institutions minimise their exposure to valuation risk by requesting valuations from a nominated panel of valuation firms. The valuation firms assume the valuation risk and are paid for their services, but this process is slow and expensive. The ValAi Platform will facilitate high-speed valuation requests and fulfillment by using a blockchain as a trusted means of interacting and AVMs to create valuations on demand.
BLOCKCHAIN VALUE
• Immutable compliant audit trail
• Data authenticity
• Security at the edge
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The ValAi Platform will also host a data-exchange market place. Network participants can monetise their property and valuation data by asserting the existence and quality of data on-chain. Traceable blockchain identity is key in producing high-quality datasets because data provenance can be guaranteed. ValAi's role is as a service provider, integrator and maintainer of the ValAi Platform and blockchain infrastructure. We will not be responsible for managing datasets, and sensitive data will remain under the control of data providers.
REVENUE MODEL
• Building AVMs
• Platform – transaction fees
• Integrating datasets for monetization
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The ValAi Platform is proposed to be accessible via an ongoing subscription-based fee structure •ValAi will receive a percentage of transaction fees from the sale of data, and endorsement of valuations •we provide Custom AVM-building services •Ongoing maintenance and consulting •Business education •Data integration
PROCUREMENT INDUSTRY
• Platform Models
• Blockchain Use
• Modern Slavery Act
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In explaining the ValAi platform and with blockchain knowledge thanks to Callan and Cryptocate, there are definite similarities between the valuation industry and procurement industry. The banks are procuring valuation services from the valuation firms, and only from those that are certified on the network. I can see and hopefully now you can too, if a similar platform was implemented, and we substitute banks with government departments, and the valuation firms with those suppliers that have been certified non child labour or meets minimum wage requirements etc in line with the modern slavery act. The ledger and purchase data is made publicly available for audit and scrutiny then you can see that a blockchain solution could be implemented.
PILOT
• Low-risk
• Validate benefits
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In summary I would recommend the government to consider a pilot utilising blockchain in procurement. The pilot project would be relatively low-risk and meaningful opportunity to discover and validate benefits. In addition to working out potential real-world problems and reducing the risk of the full-scale implementation, a pilot project would also allow government to confirm ROI expectations and begin to transition change within your organization.
Thank You
www.valai.com.au