Allowing foreigners to own real estate permanently has led to a surge in demand for housing in Australia. (Source: Silversea)

Supply cannot meet demand

Over the past few years, housing pressure has been mounting on governments as supply has failed to keep up with demand, especially in the wake of the Covid-19 pandemic.

In Australia, a report by the Population Center estimates that the foreign immigrant population will increase by 268,000 people between 2022 and 2024, further demonstrating the scarcity of housing supply in the largest country in Oceania.

The housing cost crisis is caused by rapidly increasing demand, occurring at the same time as central banks aggressively raising interest rates and inflation causing increased material costs, putting pressure on consumers' ability to buy and build houses.

In the Australian Housing Research Report 2022-2023, National Housing Finance and Investment Corporation CEO Nathan Dal Bon stressed that housing affordability and supply remain persistent challenges, requiring a comprehensive approach to reduce the housing pressures facing Australians.

Prime Minister Althony Albanese's government recently introduced a draft law on the Housing Australia Future Fund, which is expected to "pour" 10 billion AUD (more than 6 billion USD) into an investment fund and use the profits from this investment to build 40,000 new social houses at reasonable prices within 5 years, starting from 2024.

In North America, in 2022, Canadian Prime Minister Justin Trudeau launched a new $4 billion CAD ($2.93 billion) Housing Acceleration Fund, with the aim of doubling housing construction over the next decade.

That same year, President Biden announced the Housing Supply Action Plan, which aims to reduce housing cost burdens over time, by boosting the supply of quality housing in every community.

Technology helps streamline solutions

More than ever, technology and AI are effective tools to solve “barrier” problems, helping to simplify construction and real estate trading regulations, indirectly boosting housing supply.

AI provides analytics and data tools that help investors maximize profit potential.

With the ability to analyze massive amounts of data, AI helps identify patterns and make predictions, capable of navigating complex environments and providing customers with the necessary information, so they can make informed and strategic decisions.

Australian company Archistar is one of the pioneers in applying AI to the real estate sector.

Archistar owns a revolutionary platform that combines architectural design with AI, to inform real estate decision-making, navigating complex and time-consuming issues that are slowing down housing delivery.

Archistar's technology transforms the way we plan, design and build, providing users with useful information, ensuring they comply with local standards and regulations, in the most accurate way, in the fastest time.

By leveraging technology tools like Archistar’s platform, homebuyers and builders can save time and money, while reducing the likelihood of errors and oversights.

This also supports the success of projects, empowering construction contractors to continue to increase supply to the market.

Contribute to changing the real estate industry

Archistar's AI technology has been trusted by well-known contractors in the Australian construction industry, such as Mirvac, Armherst, Aurecon and Stockland.

In 2022, Archistar raised AUD 11 million (US$7 million) in investment capital from financial investment firms NAB Ventures, Skip Capital, Skyfield, AirTree Ventures and other private investors.

Applying technology in real estate - an inevitable trend in the future.

As the housing supply crisis continues, Archistar has received sustained interest from investors and funding partners who are looking to invest in technology as a solution to “untangle” traditional barriers in the real estate industry and create real change in the world.

Following the private sector, governments and the public sector should also prioritize using technology as a means to accelerate change in the housing development sector.

Governments have a responsibility to support increased supply and by adopting AI technology, leaders can accelerate the overall infrastructure development process, without compromising on quality.

There are still many procedural barriers.

The efforts of governments have received support from the people and the market, with the expectation that this will be a lever to "cool down" the real estate market.

However, the solution to increase support for the real estate market through increased investment also reveals "inherent" barriers, slowing down the effectiveness of the solution.

In Australia and North America, the process of building a property is complex and time-consuming. People have to navigate a lot of regulations surrounding construction, including environmental, zoning and heritage issues.

This complex legal environment can slow down and hinder the design and construction process, causing construction delays and exacerbating the real estate supply problem.

In that context, bringing technology and AI into the real estate sector, supporting people and businesses in understanding and enforcing regulations is an urgent requirement.