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The future of real estate: Learning from the past
The new drivers of real estate transformation
The real estate market is entering a phase where change is not only constant but accelerating. Five forces stand above the rest:
- Demographics will determine demand, shaping where and how people choose to live and work.
- Geopolitics will influence capital flows, migration, and global investment patterns.
- Sustainability is now a core performance metric, not an optional upgrade.
- Infrastructure and real estate are merging into a new category—“real assets”—where buildings are part of interconnected urban systems.
- And finally, technology is rewriting the rulebook for almost every function of the industry.
The property companies that thrive will be those that are tech-aware, sustainable, vertically integrated, and relentlessly focused on the end user.
From PropTech 1.0 to PropTech’s AI-powered future
The evolution of PropTech mirrors broader waves of digital transformation. The 1980s brought spreadsheets and early data tools; the 1990s connected the industry through email and the internet; the 2000s added mobile computing and smartphone apps; the 2010s ushered in PropTech 2.0.
Now, in the 2020s, we’ve hit the AI era—and it’s redefining everything. However, it’s helpful to remember Amara’s Law: we tend to overestimate technology’s short-term impact and underestimate its long-term effects. Today’s hype may disappoint, but the lasting structural changes will be profound.
There are five key areas in which PropTech is making its mark on the real estate industry. These are: data digitalisation; smart buildings; the shared economy; smart cities; and real estate FinTech.
Data digitalisation: AI moves from buzzword to daily tool
Real estate businesses have been remarkably slow to digitalise. AI means they now have to. JLL, a global real estate leader, claims that nearly one in three employees already uses the company’s in-house AI tool every week, with over 70% reporting that AI makes them more productive.
AI tools can now analyse and summarise text, write code, improve automated valuation models (AVMs), and generate insights from the explosion of information created by the web, smartphones and sensors.
But AI brings risks too—bias, misinformation, and hallucinations. And in data-poor commercial real estate markets, the question remains: how will AI create reliable outputs without high-quality inputs?
Smart buildings, IoT, and the productivity revolution
In 2020, the world passed an astonishing milestone: 50 billion connected devices. By some estimates, the Internet of Things (IoT) could become a market worth between $1 trillion and $7 trillion.
This data explosion is creating a new type of building—one that actively measures human behaviour patterns, energy efficiency and environmental performance. The result is a step change in how we understand productive and efficient spaces.
The rise of the shared economy and the hotelisation of real estate
The shared economy reshaped how people use space. The idea that billions of rooms could be lent, rented, or swapped on global platforms has upended traditional hospitality and office models.
Real estate is increasingly an operational business, in which space activation and excellence in customer management are core skills.
Smart Cities: Data as the new infrastructure
A smart city is, at its core, a data-driven ecosystem. Sensors, analytics, and automation theoretically allow governments and private operators to manage transportation, utilities, public services, and energy use more efficiently, and for citizens to benefit from these connections, for example by knowing what is going on at place B, and travelling from A to B more efficiently.
But governments are not good at this, because they don’t have the budgets to keep up with the innovations. Nations such as Saudi Arabia are pushing the furthest ahead, viewing smart city development as a strategic investment.
Real estate FinTech: Promise and pitfalls
In the real estate capital markets, technology has enabled new transaction models such as crowdfunding, peer-to-peer lending, and tokenisation. Residential transactions increasingly rely on digital data and AVMs, and ‘property passports’ could become standard.
Yet this market is full of false starts. Blockchain, metaverse land sales, NFTs, and fractionalisation have all been hyped—sometimes wildly—without solving a meaningful problem.
Real estate is a huge asset class, but one with low transaction velocity. And If buyers and sellers don’t want speed, many tech solutions solve nothing. Fractional ownership can democratise access to property—but it has to align with real-world needs.
The question every PropTech founder should ask is: what problem are you solving?
The great repositioning of real estate
Tech has had a broader impact on the real estate market. Across key global markets, 31% of institutionally owned property is expected to be repurposed within the next five years. Traditional sectors—especially shops and offices, both somewhat damaged by online technologies — are being reimagined as residential-anchored, mixed-use assets.
Canary Wharf is a great case study. Once dominated by financial-services tenants, it is rapidly diversifying into residential, leisure, education, and life sciences. The future belongs to operational, flexible, and socially relevant assets.
Conclusion: Learning from the past to build the future
The real estate industry is moving from old-world stability to a future defined by data, sustainability, flexibility, and technology. Companies that combine digital innovation with operational excellence, customer focus, and environmental responsibility will shape the next era of real estate.
With thanks to ChatGPT