A Revolution in Real Estate Price Estimates
Up to now, apartment valuations did not give sufficient weight to the floor plan quality. Additionally, portfolio evaluations followed manual, error-prone and time-consuming processes that lacked consistency and qualitative objectivity.
According to the Credit Suisse report Swiss Real Estate Market 2019, floor plans are a deciding factor. Surprisingly, however, for a long time, the real estate industry did not give much weight to the floor plan quality. This is despite the fact that apartment seekers attach the greatest importance to the floor plan in terms of rent, size and brightness when assessing an apartment as highlighted in the Immo-Barometer report published by Neue Zürcher Zeitung/Wüest Partner AG.
One reason for this is that the housing market in Switzerland used to be a so-called landlord market: Flats that were advertised were in demand and the number of vacant apartments was correspondingly low – the landlords had the most leverage. This has changed in recent years, and the number of vacancies has increased – especially outside of metropolitan areas. Accordingly, high-quality housing is important in order to be able to let it profitably, sell it in condominium ownership and reduce vacancies.
On the other hand, the floor plan has so far been neglected in the assessment of an apartment because the quality of the floor plan could not be measured objectively. However, new technologies now make it possible to capture the quality of a floor plan quantitatively and consistently and thus distinguish good from bad floor plans.
The solution: Objective evaluation of floor plans
A qualitative floor plan analysis significantly increases the accuracy of real estate price estimates. Archilyse has developed a tool that enables comprehensive analysis of real estate objects. These improved rental price estimates lead to higher returns and reduced vacancies.
Well-thought-out floor plans have a significant influence on the quality of an apartment. Among the most important features are the lighting conditions, the view from the apartment, its furnishing flexibility, noise pollution and the design of the exterior spaces.
Archilyse has developed a method that comprehensively analyses floor plan quality. This analysis makes it possible to objectively assess classify, and compare floor plans quality factors. The analysis takes into account thousands of data points specific to each apartment; outlook, lighting conditions, noise exposure levels and geometry of the floor plan.
Archilyse’s analysis makes floor plans quantitatively measurable making it easier to compare apartments. This analysis significantly increases the accuracy of rental price estimates. It improves the assessment of each individual apartment, improving the price estimation process. This leads to a better balanced and more profitable portfolio with shorter vacancy periods and lower tenant fluctuation.
Floor plan digitisation, accurate appraisals and portfolio segmentation
In addition to improving their price estimation processes, Archilyse also helps asset and portfolio managers to digitise and homogenise their floor plan archives and to segment their portfolios.
In the first step of the process, the floor plans are digitised and converted into 3D models. These models are then positioned in georeferenced models and finally evaluated with industry and research simulations, generating interpretable vectors.
Archilyse combines floor plan analysis data with a wide range of geodata that depicts the environment of a property. This enables the most accurate possible determination of, for example, views and solar radiation, but also calculations of travel times or distances.
In addition, information on the possible uses of a space and the functional characteristics of the apartment is also derived. The data obtained can be evaluated and interpreted either directly, or in a separate evaluation or price calculation tool, or, if necessary, by a partner company.
Last but not least, segmenting a portfolio based on the extracted qualities facilitates the process of classifying portfolio assets and marketing selected properties to key target segments. Families, for example, attach importance to a large kitchen, bright children’s rooms or the acoustic separation of rooms. For young single earners, the view or evening sun on the balcony plays a greater role, and they place less importance on good lighting conditions in the “children’s rooms”.
Based on these and other weighted parameters it is possible to determine the suitability of an apartment for specific target groups.