Geographic Information System (GIS) is an essential 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). Kantor (2018) illustrates that companies can integrate GIS model with the Internet of Things (IoT) to realize improved data streams that are effective for business decision-making processes. Property managers and real estate developers employ GIS technology to manage land valuation processes in the building and construction sector (Droj & Droj, 2015). Although financial and accounting systems are relevant when land assessments and valuation are conducted, incorporating GIS models provides location analysis, leading to better valuation processes.
GIS tools are significant in supporting the valuation process in the construction and development sector. According to Droj and Droj (2015), the functions of property valuation systems is to deliver qualitative and quantitative approaches to ascertain market prices 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. Notably, the approach has advantages to service providers, including banks, industry regulators, and customers. Integrating GIS systems into the property and real estate sector provides better quality, value positioning, and competitive advantage alternatives.
Application of GIS by Department of Lands
The department of lands of Cyprus operates under the Ministry of Interior to adjudicate over land issues in the country. The sector has applied GIS tools to manage its land valuation processes to support its primary economic drivers, such as banks and tax regulators (Department of Lands, 2016). The decision to integrate GIS was made in line with the European Union INSPIRE program with the objective of sharing spatial information on public and private sector players. The INSPIRE geo-portal program allows sharing information and spatial data for decision-making.
Valuation systems in the property and real estate development industry have been applied using different tools that deliver different results regarding quality and price. The departments of lands and surveys in the Cyprus Republic has employed the GIS technology to provide enhanced precision of 81.31 percent compared to a mass valuation exercise that gave an accuracy rate of 66.76 percent (Yiorkas & Dimopoulos, 2017). Through a study by Yiorkas and Dimopoulos (2017), the significance of GIS in the construction sector is realized in the Cyprus scenario since it provides geospatial patterns and attributes that add value to the valuation system. Cyprus was headed to an economic crisis due to the limitation of general assessment methods employed within the building and construction sector (Yiorkas & Dimopoulos, 2017). Therefore, applying GIS technologies in assessing properties in the construction sector improve value and effective pricing. Therefore, companies that utilize such technology enjoy better business prospects.
Advantages of GIS Models
Property valuation systems are significant attributes for the banking and insurance sector, which are lead construction partners. 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 Cyprus’s banking and insurance sector caused by poor property evaluation models. According to the authors, the evaluation systems used in the construction segment delivered inconsistent rates that led to a skewed property market value, hence disadvantaging the banking industry. The banking unit is a critical stakeholder in real estate; inconsistencies in the valuation processes can cause irregularities in taxation brackets and lead to non-performing loans (Yiorkas & Dimopoulos, 2017). The GIS and geostatistical analysis develop a framework for real estate players to advance critical decision-making attributes. GIS technology creates value to the banking sector by providing an opportunity for property pricing, value prediction, and tax estimate for comparative advantage.
Future Application of GIS Models for Energy Improvements
Land and property are essential factors of production that influence economic activities. 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 programs in the building and construction sector. The authors further explain that GIS tools significantly enhance green economy through scheduled improvements on old buildings in Europe. Future application of GIS tools in the real estate and banking sector will gain momentum based on environmental protection and sustainability needs. Caputo and Pasetti (2017) developed a Municipal Energy Model (MEM), a GIS tool, to facilitate energy planning, policing, and advisor networks on consumption and sustainability. The initiative can employ GIS models in the future management of environment and create sustainability in the building and construction industry. Therefore, applying GIS tools will support the decision-making of various issues, such as environmental conservation, costs, value, and sustainability initiatives.
Old buildings in several cities have higher energy consumption levels, which disadvantage conversational efforts. Hence, to boost renewable energy within buildings in a town, GIS tools should be utilized to analyze structures before enhancements are made. Since MEM can provide a geo-referenced representation of the position of various constructions for improvement, the technology should be applied to develop building while saving energy (Caputo & Pasetti, 2017). Utilizing such approaches will save energy and conserve the environment, an issue that affects cities. Accordingly, managing integration between the GIS technological tools and the various sectors of the economy will enhance the utilization of green energy within traditional buildings and provide better alternatives in analyzing the price and value for buildings. Notably, the approach will also help manage the rates charged on housing units due to reduced energy costs, enhancing value and environmental sustainability.
Integrating GIS systems into the property and real estate sector provides better alternatives for quality and value positioning, leading to competitive advantage for companies. GIS systems are significant for the growth of professional sectors, such as banking, taxation departments, and insurance, among other areas. Utilizing GIS tools in the real estate industry supports quality assessment and provides financial decision-making in market rate, tax projections, and property socioeconomic value. The growth of the banking sector is a significant benchmark of a country’s economic growth. Exploiting GIS tools that analyze projects can enhance loan performance in banks and investment agencies. It also helps to ascertain the right tax brackets for properties chargeable by regulators, delivering value and quality to all stakeholders. Additionally, the GIS technology supports environmental protection systems that seek to reduce consumption of energy within the public building. Through mapping and analysis, experts can schedule construction improvements when building to attain better energy consumptions standards. Therefore, organizations that utilize GIS technology are competitive and enjoy a comparative advantage.
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
Department of Lands. (2016). The department of lands and surveys web portal. Retrieved from http://portal.dls.moi.gov.cy/en-us/Pages/The-Department-of-Lands-and-Surveys-Web-Portal.aspx
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