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What’s next for AI
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Artificial intelligence is widely expected to have a massive impact on real estate over the next few years.

But it’s just the latest in a long line of technologies that have reshaped the industry in recent decades, from making buildings more energy efficient to managing spaces in the hybrid-work age.

These proptech innovations place the increasing adoption of AI in real estate as more of an evolution than a revolution, says Yuehan Wang, global research associate and lead for the JLL Global Technology Research Program.

“Proptech is now widely adopted across the whole real estate value chain, so we already had a solid foundation for incorporating AI technologies across the industry,” Wang says.

This isn’t to discount the potential of AI, which is ranked among the top three technologies expected to have the greatest impact on real estate over the next three years by investors, developers and corporate occupiers, according to JLL’s Artificial Intelligence: Real Estate Revolution or Evolution report.

Capable of analyzing several large data sets at once, AI is supporting decision making by creating tailor-made listings of properties based on a client’s preferences and previous activity, as an example. Generative AI, which learns patterns and behavior of input data to produce new content, is being used to respond to customer queries all day, every day.

Still, digital transformation began impacting real estate decades ago with property management software, customer relationship management systems and financial analysis tools.
Woman working on laptop, sitting on the floor

From there it has only expanded further. In 2021, JLL found that the number of proptech start-ups had tripled over the previous decade. The first six months of 2021 had seen a record $9.7 billion in funding activity for the sector, propelled by the pandemic.

While the surge continued through to 2022, funds have tailed off in 2023, with PitchBook data recording US$2.2bn in proptech venture capital deals globally to May. Nonetheless, confidence in the sector remains high.

“There are now technological solutions for almost every aspect of real estate functions, including investment management, design and construction, building and facility operations and portfolio management,” Wang says.