Geographic Information System (GIS) is an important tool that is gradually gaining momentum in the Real Estate Development sector. Businesses utilize GIS technology as a planning and business management tool that influences value and profitability.(Kantor, par. 1). Kantor (2018) illustrates that companies utilize GIS models and integrate it with Internet of Things (IoT) to realize improved data streams that are effective for business decision making processes (par. 3). Property managers and real estate developers are employing GIS technology to manage land valuation processes in the building and construction sector (Droj & Droj, 2015, p. 829). Although financial and accounting systems are relevant when land assessments and valuation process are conducted, incorporating GIS models provide location analysis that leads to better valuation perspectives.
According to (Droj & Droj (2015), the function of property valuation systems is to deliver qualitative and quantitative approaches to ascertain the market price for properties, while a GIS approach uses economic and cadastral evidence such as social, physical, taxation, noise, pollution, and legal factors, to facilitate an all-inclusive analysis of properties (p. 826). Notably, the approach enhances both service providers, including banks, industry regulators, and customers. The integration of GIS systems into the property and real estate sector provides better alternatives for quality,value positioning, andcompetitive advantage.
Valuation systems in the property and real estate development industry have been applied using varied tools that deliver different results in regards to quality and price. The departments of lands and surveys in the Cyprus republic has applied the GIS technology to deliver enhanced precision of 81.31 percent compared to a mass valuation exercise that delivered an accuracy rate of 66.76 percent (Yiorkas & Dimopoulos, 2017, p. 1). Through a study by Yiorkas and Dimopoulos (2017), the significance of GIS in construction sector is realized in the Cyprus scenario since it provides geospatial patterns and attributes that add value to the valuation system (p. 1). Using the illustrated example, Cyprus was headed to an economic crisis due to limitation of general assessment methods employed within the building and construction sector (Yiorkas & Dimopoulos, 2017, p. 1). Therefore, employing the GIS technology in assessing properties in the construction sector delivers improved value and effective pricing. Therefore, companies that utilize the technology enjoy better business prospects.
Property valuation systems are significant attributes for the banking and insurance sector who are lead partners in the construction. Sectorial players rely on decisive decision-making to predict cost and value items, such as tax, socio economic worth, quality, and regulations linked to properties. Yiorkas and Dimopoulos (2017) demonstrate a looming crisis in the banking and insurance sector of the Cyprus caused by poor property evaluation models (p. 1). According to Yiorkas and Dimopoulos (2017), the evaluation systems used in the construction segment delivered inconsistent rates that led to a skewed market value of properties disadvantaging the banking industry (p. 1). The banking unit is a critical stakeholder in real estate since inconsistencies in the valuation processes can cause irregularities in taxation brackets and lead to non-performing loans (Yiorkas & Dimopoulos, 2017, p. 2). The GIS and geo-statistical analysis develop a framework for players in real estate to develop critical attributes for decision making. GIS technology delivered effective value to the banking sector by providing opportunity for property pricing, socio economic value prediction, and tax estimate for comparative advantage.
Land and property are important factors of production and their value has significant influence on livelihoods. Present and future application of the GIS technology will lead to better market prediction, enhanced revenues, and customer value in both the real estate and overall development economy. According to Caputo and Pasetti (2017), GIS tools can be utilized as a roadmap to managing climate change perspectives in building and construction sector (p. 435). The authors further explain that GIS tools are significant to developing a low carbon economy through scheduled improvements on old buildings in Europe (p. 435). Future application of GIS tools in the real estate and banking sector will gain momentum from the perspectives of environmental protection and sustainability by managing energy consumption levels. Caputo and Pasetti (2017) developed a Municipal Energy Model (MEM) a GIS tool meant to facilitate energy planning, policing, and advisor networks on consumption and sustainability (p. 438). The perspectives offered by Caputo and Pasetti (2017) demonstrate a possibility to employ GIS models in future management of the environment and create sustainability standpoints in the building and construction industry. Therefore, GIS tool are likely to be functional in future to support decision making of various issues such as environmental conservation, costs, value, and sustainability perspectives.
Old buildings in several cities have higher energy consumption levels, which disadvantage conversational efforts. To ensure a boost to energy renovation within the building stock, it is significant that GIS tools are utilized to analyze structures and schedule improvements. Given that, MEM is enabled to provide a geo-referenced representation of the position of various constructions for improvement, it important that GIS tools such as MEM are applied to cities to deliver energy savings (Caputo & Pasetti, 2017, p. 438). Utilizing such approaches will deliver energy gains and yield to better environmental protection systems, which is a significant to a majority of cities struggling with conservation systems. Accordingly, managing integration between the GIS technological tools and the various sectors of the economy will help to leverage on current challenges such as enhanced utilization of energy levels within traditional buildings and will provide better perspectives in analyzing the price and value for buildings. Notably, the approach will also help to manage the rates charged on housing units within cities leading to environmental sustainability.
Conclusion
Integrating GIS systems into the property and real estate sector provides better alternatives for quality and value positioning and lead to competitive advantage for companies. GIS systems are significant for the growth of professional sectors such as banking, taxation departments, and insurance among several others. Utilizing GIS tools in the real estate industry supports the industry to manage quality assessment and provide financial determinations to attributes such as market rate, tax projections, and socioeconomic value for properties. Growth of the banking sector is a significant benchmark of economic growth of a country. Utilizing GIS tools that help in correct analysis of projects enhances performance of loans in banks and investment agencies and attributes correct tax bracket of properties to the regulators delivering value and quality to all stakeholders. Additionally, the GIS technology supports environmental protection systems that seek to reduce high consumption of energy within public building. Through mapping and analysis using GIS tools, experts can schedule construction improvements to building making them attain better energy consumptions standards. Therefore, the competitiveness of organizations that utilize the GIS technology is improved to deliver gains and comparative advantage for companies.
References
Caputo, P., & Pasetti, G. (2017). GIS tools towards a renovation of the building heritage. Energy Procedia, 133, 435-443. doi: 10.1016/j.egypro.2017.09.388
Droj, L., & Droj, G. (2015). Usage of location analysis software in the evaluation of commercial real estate properties. Procedia Economics and Finance, 32, 826-832. doi: 10.1016/S2212-5671(15)01525-7
Kantor, M. (2018). Colleges see GIS playing a larger role in business education. Forbes. Retrieved from https://www.forbes.com/sites/esri/2018/10/17/colleges-see-gis-playing-a-larger-role-in-business-education/#43e40be7474e
Yiorkas, C., & Dimopoulos, T. (2017). Implementing GIS in real estate price prediction and mass valuation: the case study of Nicosia District. In Fifth International Conference on Remote Sensing and Geoinformation of the Environment (RSCy2017) 10444, 1-18. doi: 10.1117/12.2280255