New land valuation tool uses big data to inform urban planning, development and investment
City Futures Research Centre
A next-generation planning toolkit allows urban planners and policymakers to explore the effect of new infrastructure and changes to planning controls on surrounding property values.
A new commercial partnership between UNSW, PEXA and Frontier SI is launching a data-driven toolkit that rapidly calculates property valuations to inform urban development. The toolkit, hosted by the new venture Slate Analytics, allows users to visualise diverse infrastructure and planning scenarios and their effect on surrounding property values. It will facilitate data-driven solutions to support better city planning.
The digital toolkit, called the Rapid Analytics Interactive Scenario Explorer (RAISE), uses big data, artificial intelligence and advanced analytics to calculate property valuations across Australia鈥檚 residential property market. Its interactive, what-if scenario capability represents an industry-first for planning support systems.
Valuations are used to collect land tax, inform infrastructure investment and lending for homes, as well as to model insurance risk and property investment returns, says , Director of the , chief investigator on the project.
鈥淸However,] the current labour-intensive approach to land and property value assessment results is expensive, subjective, slow and often uses out-of-date valuations for property. Increasing the accessibility and accuracy of value assessments will help homebuyers, investors, businesses and governments make more informed decisions.鈥
RAISE provides a cyber-secure, scalable and commercially viable solution that reduces the risks and costs associated with land value analysis, he says.
鈥淭his new commercial partnership brings together PEXA鈥檚 expertise in data and digital property settlements, and Frontier SI鈥檚 specialisation in spatial mapping and geodesy with UNSW鈥檚 leading research on data science and the future of our cities to deliver a world-class platform.鈥
Scott Butterworth, Chief聽Data and Analytics Officer at聽PEXA, says: 鈥淲ith its evidence-driven scenario modelling, RAISE will revolutionise the way we approach urban planning and development. It could also prove highly beneficial to Australia鈥檚 lending community,聽potentially expediting the mortgage approvals process on behalf of Australian homebuyers.聽PEXA is delighted to be leading this venture, delivering on real-world needs.鈥
The digital toolkit is the result of a longstanding research partnership between Frontier SI and UNSW CFRC. Graeme Kernich, CEO FrontierSI said 鈥淭hrough Slate Analytics, FrontierSI and UNSW has realised its vision to bring cutting edge AI into the property valuation products and services space. The investment by PEXA will be critical to furthering this vision and expanding the impact that this capability will have for Australia and beyond.鈥
The venture builds on previous research with UNSW鈥檚 CFRC, Frontier SI, Commonwealth Bank of Australia, Liverpool City Council, the NSW Office of the Valuer General and property data management company Omnilink, that was funded by an Australian Government Cooperative Research Centres Projects (CRC-P) grant.
The toolkit cleans, links and embeds diverse geospatial and property data from trusted government databases and industry partners, including from such sources as the Australian Bureau of Statistics, Geoscape, Valuer General鈥檚 data and Transport, Education and Crime Statistic agencies.
It includes a聽property market dashboard developed in response to COVID-19 that provides a daily snapshot of how the property market is performing in comparison to prior to the pandemic. It has an interactive map of Australia, identifying COVID case numbers based on data from state departments of health.
The dashboard provides graphs and charts of key property market metrics, including median property prices, auction clearance rates, the house value index and the performance of the ASX 200 real estate sector, to assist government, industry and communities in understanding the impacts COVID-19 is having on the property market.
The toolkit was used in evaluating the proposed high-speed rail network on the east coast of Australia. It revealed that land value growth around the high-speed stations, estimated to increase by up to $140 billion, could be used to fund the network.
鈥淎 significant portion of this could be dedicated to funding its construction and supporting the creation of liveable and vibrant cities and regions,鈥 Prof. Pettit says.聽
Understanding the influence of infrastructure provision on property values
One of its aims is to improve users鈥 understanding of land economics, in particular, the influence that infrastructure provision and other key variables play in land values, Prof. Pettit says.
The tool considers structural attributes, such as the building鈥檚 quality, age and size; neighbourhood attributes, such as crime levels and socio-economic profile; and accessibility, such as the nearest transport connections, jobs centres and services.
It is accessed through a web browser allowing multiple users in diverse locations to compare and analyse different scenarios. Users can alter key assumptions within the tool, such as access to transport, schools, hospitals and zoning plans, and map their effect on property values.聽
For example, users can drag and drop new train stations into urban areas and predict the anticipated increase in value (value uplift) on surrounding properties associated with the accessibility benefits of improved transport infrastructure.
鈥淣ew and improved transport 鈥 including new stations, faster trips, more frequent trips, upgraded services or higher volume services 鈥 can connect residents to jobs and services and also connect businesses to labour, supplier and customer markets,鈥 Prof. Pettit says. 鈥淎s such, there is an expectation that residents and businesses will pay a premium for property serviced by this infrastructure.鈥
Governments are interested in measuring value uplift to determine the viability of using value capture (taxing this uplift) to fund current or future transport infrastructure projects through policies, such as developer charges, stamp duty,聽land tax and betterment tax, he says.
鈥淰alue capture is, in essence, a tax on the increase in land values associated with new or upgraded infrastructure, and these taxes can be used to offset infrastructure costs and fund supporting initiatives, such as new parks or increased affordable housing stocks.鈥
There has been renewed national policy interest in value capture in Australia in the debate around the National Settlement Strategy as well as the national Smart Cities Plan (2016) and the Greater Metropolitan Sydney Planning Strategy (2018), and internationally, he says.
鈥淭he expense involved in engaging specialist valuation consultants means that fewer options are typically explored by planners and decision-makers, and effective value capture mechanisms are seldom employed in Australian infrastructure planning,鈥 he says.
UNSW will retain a stake in the new venture, supporting it through ongoing research and development.
鈥淭he tool makes an important contribution to building more equitable and productive future cities, helping planners, councils and governments maximise investments to get the best outcomes, including better public transport, additional green space and more affordable housing stock 鈥 for the whole community,鈥 he says.聽
A new commercial partnership between UNSW, PEXA and Frontier SI is launching a data-driven toolkit that rapidly calculates property valuations to inform urban development.
Co-design model aligned utility with end-user expectations
RAISE was co-designed through a series of workshops with research partners, state government-based valuers and local government urban planners to ensure its functionality and user experience aligned with end-user expectations.
The workshops evaluated rapid prototypes to optimise the design according to its data inputs, modelling and scenario formulation and visualisation, interface and workflow. Feedback shaped further development, extending the tool鈥檚 base functionality, model and data integration, and collaborative features through a series of iterations.
For example, feedback from stakeholders in the co-design workshops prompted the introduction of school-quality indicators into the modelling, Prof. Pettit says. Properties in catchments of schools performing well, as measured by NAPLAN results, were found to be valued higher.
The need for digital technologies, such as data-driven scenario tools, will continue to grow with rapid urbanisation and global population growth; however, the inherent complexity of big data as well as the diverse players and conflicting agendas mean the tools work best in tandem with expert knowledge, he says.
鈥淭hese tools and technologies work hand in hand collaboratively with planners and those key decision-makers who shape the future of the city鈥 We鈥檙e all striving towards more liveable cities, more sustainable cities, more resilient, productive [and] inclusive cities. The tools are used to support those sorts of big-picture challenges.鈥澛
Video:聽Creating impact by co-designing technologies
UNSW Professor of Urban Science Chris Pettit and researchers from the City Analytics Lab co-design tools and technologies that work collaboratively with planners and key decision-makers to shape the future or our cities. Director of the UNSW City Futures Research Centre, Chris explains how through the power of big data, machine learning and visualisation, experts and policymakers can explore what is possible in shaping more liveable, sustainable, resilient, productive, and inclusive cities. For more information on the tools and technologies shown in this video, visit the .
Lead image:聽The new tool will facilitate data-driven solutions to support better city planning. Image: Shutterstock.聽
This article was originally published in 2022.
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