AI in Property Valuations: Why Independence and Global Standards Matter

May 2025

Artificial Intelligence (AI) is revolutionising industries globally, and property valuations are no exception. With the ability to process vast datasets using machine learning, AI promises faster, more accurate, and more cost-effective valuations. But as adoption grows, so do concerns around trust, transparency, and accountability. How can we ensure these models are reliable, fair, and explainable?

Building a Smarter, Fairer Valuation Model

In 2019, Lightstone launched its Artificial Intelligence Valuation Model (AiVM) to enhance the accuracy and accessibility of its traditional Automated Valuation Model (AVM). Rather than embracing AI for innovation's sake, the goal was to deliver a widely adopted, high-trust tool for banks, Estate Agents, and consumers.

Unlike conventional statistical models, the AiVM analyses nuanced property features across South Africa's 7.1 million residential properties, delivering more precise valuations. Importantly, it is not a "black box." The model is independently auditable, explainable, and designed to empower human decision-making, not replace it.

Why Global Standards Matter

As AI becomes more embedded in the property sector, aligning with global best practices is essential to maintain public trust and financial stability. To meet this need, Lightstone sought and received accreditation from the European AVM Alliance (EAA), making it the first African and only non-European member of the body.

This accreditation reflects rigorous evaluation across key criteria including data integrity, statistical robustness, model transparency, and performance reliability. It confirms Lightstone's AiVM is not only technically sound but also independent, trustworthy, and resistant to market manipulation.

What Global Accreditation Means for South Africa

Lightstone's EAA recognition brings tangible value across the property ecosystem.

• Consumers benefit from bank-aligned, unbiased, and explainable valuations that support more informed buying and selling decisions.

• Estate Agents gain a powerful tool to set fair prices and close deals faster.

• Banks enjoy reduced risk and quicker, more consistent lending decisions.

"At Nedbank Home Loans, the AiVM supports faster, risk-aligned credit decisions, improving both efficiency and the customer experience," adds JP Viljoen, Head of Home Ownership at Nedbank.

Ongoing Commitment to Excellence

Lightstone's leadership does not stop at a single accreditation. The AiVM is continuously tested and independently reviewed by global institutions like Moody's and Fitch. SLA dashboards provide corporate clients with performance insights, while anomaly detection and built-in explainers enhance transparency and reduce bias.

This commitment to ethical innovation ensures that Lightstone's AI solutions remain explainable, accountable, and aligned with the real-world needs of its users.

Shaping the Future of AI in Real Estate

With AI regulation gaining global momentum, especially through initiatives like the EU AI Act, Lightstone is proactively contributing to global governance as part of the EAA's Regulatory Workgroup. Locally, it expects South Africa to follow a similar path to how POPIA mirrored the GDPR, ensuring future readiness.