Building the Future: How AI and Real Estate are Joining Forces for Smarter Investments In 2024, the Indian real estate market size is estimated to be USD 518.5 billion and is expected to reach USD 856 billion by 2029, at a CAGR of 8.71 per cent. Real estate is the most preferred asset class for investment for over 59 per cent of Indians

Georgian-American businessman, real estate developer, and investor Tamir Sapir once quipped, "If you're not going to put your money into real estate, where else?" and rightfully so. According to a McKinsey report, two-thirds of global net worth resides in real estate.

The global real estate market size was valued at USD 3.69 trillion in 2021 and is expected to expand at a compound annual growth rate (CAGR) of 5.2 per cent during 2022-30.

In 2024, the Indian real estate market size is estimated to be USD 518.5 billion and is expected to reach USD 856 billion by 2029, at a CAGR of 8.71 per cent. Real estate is the most preferred asset class for investment for over 59 per cent of Indians.

It is predicted to develop rapidly and reach USD one trillion by 2030. In 2024, the industry is adding artificial intelligence (AI) into the mix.

According to The Business Research Company, AI in real estate market size has grown from USD 164.96 billion in 2023 to USD 226.71 billion in 2024 at a CAGR of 37.4 per cent.

Akhil Gupta, co-founder and CTO of NoBroker earlier in the media said that he expects AI to change the way that real estate players – from property developers to financiers – function by helping them optimise backend operations. "As a result, we will see an evolution in the questions asked across the entire value chain," he said.

AI usage in the industry can help players automate property valuations, calculate property risk analytics, evaluate data to inform investment decisions and facilitate home recommendations and customer service.

Bhavik Bhandari, chief sales and marketing officer of Ashwin Sheth Group notes that AI is transforming the way real estate investments are approached.

"By leveraging AI, we can target buyers with personalized marketing strategies, elevating the customer experience. In property development, AI-powered insights guide us toward more sustainable practices, while smart building technologies, driven by AI, are revolutionizing property management, making operations more efficient and properties more eco-friendly," said Bhandari. "AI isn't just a tool—it's a game-changer for how we invest in and develop real estate."

For Sauvik Banerjjee, AI-driven insights are proving to be game changers for his clients, helping them make smarter decisions.

"In 2023, the real estate sector witnessed a significant increase in investments in AI-powered prop-tech, reaching USD 630 million. This surge is largely attributed to the incorporation of AI in property management and the automation of valuation processes, which enhance operational efficiencies and enable more informed decision-making based on robust data analytics," said Sauvik Banerjjee, MD and CEO, sirrus.ai.

With Sirrus.ai, he is aiming to be at the forefront of the residential real estate sector as a leading Customer Experience Platform (CXP), expertly leveraging AI to streamline and enhance the customer journey.

Case in point: its Content Management module processes a rich variety of data- inventories, brochures, promotional materials, floor plans, and architectural visuals- to customize content to user's preferences and behaviour.

Despite being optimistic about the tech usage, Bhandari is aware of the flip side. "While AI holds incredible potential for revolutionizing real estate, its adoption doesn't come without hurdles. For AI to perform optimally, it requires high-quality data. Relying on incomplete or inaccurate information can skew results, leading to misinformed decisions. Another challenge is consolidating various data streams—from public records to property listings—into a single, cohesive system."

In coming times, Banerjjee expects Generative AI to be a transformative force. "As the sector evolves, we anticipate a growing emphasis on three key areas: 1. interaction: AI technologies, particularly those enabling virtual reality and augmented reality, will become increasingly integral; 2. efficiency: AI-driven automation in property management and transaction processing will significantly reduce manual efforts and streamline operations; and 3. decision-making: the use of AI for predictive analytics in real estate is expected to expand."

For instance, genAI can streamline the acquisition process by automating and providing intelligent analytics for identifying, purchasing, and managing assets. This technology simplifies due diligence, making it more efficient and reliable, delivering valuable insights that can either validate a potential acquisition or uncover risks that may warrant reconsideration. Additionally, GenAI can enhance areas like portfolio management, scenario planning, contract management, and financial analysis.