REINZ launches next generation automated valuation model (AVM)

The Real Estate Institute of New Zealand (REINZ) has today launched its most technologically advanced product yet – a new automated valuation model (AVM) which uses advanced modelling and deep machine learning techniques to produce accurate estimates and up-to-date sales price predictions for residential properties across New Zealand.

REINZ has already been producing an AVM estimate for a number of years now, however, with new and updated technology, what we have now developed offers a superior AVM for our members and for members of the public who would like to understand what a property’s estimated current market value may be.

Wendy Alexander, Acting Chief Executive at REINZ says: “Property valuation plays an integral part in the end-to-end real estate sales process, not to mention the value that this information brings to other sectors such as banking, government, insurance, capital investment and economic forecasting.

“While there is of course a place for an in-depth property valuation to be carried out by a registered valuer in person, in an age of data-driven decision making, and the insatiable appetite for instantaneous information, the industry has become accustomed to the presence of AVMs producing an ‘on the spot’ estimate when required,” she continues.

“The majority of AVMs on the market don’t have access to the most up-to-date sales data in order to make their calculations. However, REINZ’s unconditional sales data provides a key advantage and therefore increases confidence levels in making accurate and informed valuation predictions.

“The REINZ ‘next generation’ AVM can generate sale price predictions using a multitude of data sources such as historical sales records dating back to 1991, recent council valuations nationwide, historical valuations from councils, census data, house price indices and more. Using complex methodologies, it then compiles data about the property to produce a predicted sales price for that property,” points out Alexander.

The new REINZ AVM will cover more properties in the market and provide more accurate estimates that are closer to actual sales prices, within a narrower range and with less time lag to detect changing trends. It will achieve this by using more data point inputs, more sophisticated models and algorithms and more up-to-date data. It will also use machine learning to continuously improve.

“From guiding vendor and purchaser expectations, to being a local market expert, having an accurate understanding of the current value of a property is one way of ensuring that you have all the important data you need,” concludes Alexander.

The REINZ AVM will be available to members via REINZ’s Statistics Platform and REINZ’s PropertySmarts product. Members of the public will be able to access the brand-new AVM data at their fingertips through property listings on realestate.co.nz.

The REINZ AVM is delivered as an estimated range displayed with a low to high estimate. To provide a level of confidence in the estimated value provided a Star Confidence Rating is displayed as either 1 to 5 stars, with 5 being the most confident and 1 being the least. 

ENDS

 

For further information, please contact Dee Crooks, Corporate Communications Director at REINZ, on 021 953 308.