Algorithm predicts risk or reward of property purchase

Imagine a simple algorithm that could help determine the risk or reward of a property purchase… Well, that’s exactly the new research tool available to property purchasers. 

Using data and financial modelling, an algorithm from Riskwise Property Review allows buyers a glimpse into the long-term risk or possible reward of a purchase, and the analysis is instant.

Riskwise founder and CEO Doron Peleg explained the tool measures current and historical data along with dozens of variables and a broad range of risk factors, ultimately scoring the property’s risk potential from minimal to high.

Users simply enter a specific address or suburb and receive an instant report that covers factors like location, suburb, population and economic trends, rental returns, property-type comparisons and even capital growth forecasts for the long and short term, for any property in Australia.

Ultimately, this translates to a score that gives buyers and industry insiders the ability to weigh up the overall risk of a potential property against their own risk profile and their purchasing strategy.

Mr Peleg said the idea came to him during a discussion with educated friends who were looking to make a property purchase.

“I kept saying to them, ‘Show me the risk’.”

So he set to work developing a service that gave investors and experts in the industry a way to take “complex variables and turn it into a simple, but accurate ‘whole picture’”.

The algorithm officially launched in June last year but was already attracting interest before it went live.

“We have two types of clients: buyers and agents,” Mr Peleg explained. “Investors are using it to make a decision, while seller’s agents tend to have two objectives – to provide a report for marketing material or, if a property doesn’t rate well, it’s a good tool to use with the vendor to manage expectations.

“We’ve designed the service to be inexpensive and accessible to everyone, from first-time homebuyers to mortgage brokers and property developers.”

Meanwhile, Mr Peleg notes, as the tool is independent and unbiased it can also assist lenders looking to better assess the risks associated with residential lending.

In addition to the risk analysis reports, information seekers like property developers can request custom reports from the RiskWise team of analysts and property market experts.

“When you provide us with some basic criteria, we can use our analysis to determine the suburbs and property types that match the outcomes you’re looking for,” Mr Peleg said.

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Cassandra Charlesworth

Cassandra Charlesworth is a features writer for Elite Agent Magazine with over 15 years’ journalism experience in metropolitan and regional newsrooms. She has a specialist interest in real estate, tech disruption and a good old-fashioned “yarn”.