Artificial Intelligence: Real Estate Revolution or Evolution?

As the capabilities of AI agents continue to astonish the world in 2025, AI is becoming increasingly powerful.
 

• AI has enormous potential to reshape real estate, with near and long-term impacts ranging from the emergence of new markets and asset types to innovations in investment and revenue models.
• A rapidly expanding AI ecosystem and its supporting infrastructure will drive demand for real estate in different markets across the globe.
• There are increasing number of AI-powered real estate technology solutions. Organizations will need to consider how they can harness AI strategically and ethically, piloting applications before scaling to deliver value.

AI uses machine learning and deep learning algorithms to perform tasks that require the ability to learn from experience, understand complex concepts, recognize patterns, interpret the nuances of natural language and independently make decisions. Generative AI is a subset of AI that focuses on creating new content, designs or solutions.

AI in PropTech will continue to grow. JLL research shows that as of end of 2024, among 7,000 global PropTech companies, about 10% (700 companies) are currently providing AI-powered solutions, including both AI native products and AI-augmented products. Venture capital (VC) is the main driving force backing the development of AI products. Among all AI-powered PropTech companies, around 62% are VC-backed. About 20% of companies are in the very early incubator, angel or seed stage; 25% are at early-stage VC rounds; and 15% are at late-stage VC rounds. Overall, this ecosystem is young and energetic, with most (83%) generating revenues or making profits, signaling long-term potential for the market. 

Read more about AI in PropTech in JLL Spark Featured Research: Where AI demand is creating investment opportunity

Act Now: Harnessing AI strategically and responsibly
 

There are still considerable uncertainties about the future impact of AI, the full range of its rapidly expanding capabilities and how these capabilities will be assimilated into specific industry sectors. It is crucial for real estate investors, developers and corporate occupiers to stay informed and strategic, considering how to leverage the power of AI to support your business objectives and how to do it in a responsible and ethical way.

As the regulatory landscape for AI evolves to keep pace with its growth, businesses must be vigilant about three types of emerging regulations:

• Market standards and protocols concerning data quality, IP rights, privacy and data security.

• Regulations to mitigate societal risks, such as measures to protect the labor market from shock or safety standards for autonomous vehicles.

• Environmental legislation, notably that aimed at mitigating carbon emissions from the growing digital economy.

Organizations will need to reflect on a number of key questions as they consider the right path forward: What does the growth in AI mean for your investment and location strategies across existing (or emerging) asset classes? What existing or future applications of AI do you need to be prepared for and pilot now? What are the potential business and societal risks?

Understanding how artificial intelligence will impact your business and creating a test and implementation strategy will be key to mitigating risk and harnessing the potential for growth.

Explore more of JLL's latest insights on World Economic Forum themes at our dedicated Davos page.