The AR/VR Market and Real Estate

Artificial intelligence (AI) is playing an increasingly important role in the real estate industry, by changing the marketing and sales landscape of real estate. Within AI, the impacts of Augmented Reality/Virtual Reality (AR/VR) will make a big imprint on the industry.

The AR/VR Market and Real Estate

Research from Goldman Sachs estimates that the market for virtual reality (VR) in real estate alone could generate as much as $2.6 billion by 2025. This year, researchers estimated that 130,000 real estate agents will be using VR to show homes with annual spending of $5,000, which could grow yearly by 10%. Sizeable financial investments are being made in AR/VR technologies within real estate, but to what end?

Virtual Tours and Their Benefits

How VR tours work?

The biggest impact of AR/VR in real estate will be in virtual reality home tours. These are created by bringing strategically placed 360° cameras into the home to film. The footage is edited together for a seamless, real-life, 3-D experience. The idea is that the user will experience what it feels like to be in the actual physical home through the VR experience. A VR home tour can allow users to make measurements and learn dimensions within the home but primarily, it is used to gauge an emotional appeal or “feel” from potential buyers toward a property. This technology adds an additional layer of depth to the previous use of two-dimensional videos and still photography to show a property’s charms.

Benefits of VR tours


It is projected that consumers will want the technology to see homes on their own (without the agent’s involvement) and agents will want to leverage the technology to show homes to clients, creating demand on both sides. VR provides a more immersive, true to life experience, without the inconvenience and time commitment of physically going to see multiple homes or properties for individuals who are looking to buy.


Virtual home tours could quite possibly speed up the purchasing process with increased confidence to home buyers. Touring virtually allows buyers to experience a space and decide quite quickly if it is a good fit. Presale construction projects benefit largely from VR technology, enabling buyers to tour homes not yet built. The confidence that comes from a virtual reality tour is important to buyers as demonstrated by the VRARA’s survey in which 40.4% of apartment buyers confirmed that VR tours play an important role in making purchasing decisions.

Global Opportunities

Virtual tours allow prospective buyers to experience a property from anywhere in the world, eliminating a purely local real estate market and replacing it with global opportunities to connect buyers with properties.


The immersive technology records and captures what areas of a home where viewers spent the most time, and can give valuable feedback to real estate agents as to user preferences. This information helps agents pinpoint valuable selling opportunities.

Learn more about how we can work together your AR/VR strategy!

Third-Party AR Apps Enhancing Real Estate Transactions

Many potential buyers are interested in knowing what a particular paint color might look like in the kitchen or how a sofa would fit in a new home. These details can help be a deciding factor for buyers in whether or not to purchase a property. There are many home furnishing and decorating AR apps that allow customers to experience products and create emotional connections before purchasing.

In 2017, Hutch the interior design app, raised $10M in funding from real estate giant Zillow, cementing the overlap of interest between home decorating and the real estate market. The app aims to help novice decorators work like pros by allowing them to customize their homes with the use of AR. Hutch proposes furniture and decoration from popular companies, which can be placed in a room and viewed 3-dimensionally, and also offers virtual paint settings that show different paint colors applied to the walls of users’ actual homes.

Houzz is an app using AR technology that allows its users to choose from among 10 million products and view them in a space. The user can use the ‘View in My Room’ 3D mode to see furniture or other home decorating ideas come to life. The app also can put clients in touch with professionals such as architects or designers and has a social sharing aspect.

The Swedish department store, IKEA launched an AR application that allows its users to try out IKEA products before purchasing them. The app called IKEA Place shows rendered 3-D versions of products that can then be placed inside of a user’s home. The technology can scale products based on room dimensions and users can select from over 2,000 IKEA products.

The real estate industry is embracing AI through the use of AR/VR technologies. With virtual reality technology, buyers can make an emotional, sensory, and physical connection with homes, touring without actually setting foot inside. This technology should add excitement to the real estate market, expediting the purchasing process, creating global demand and giving consumers greater confidence to make purchases without physically visiting a property.
In an additional bump to the real estate market, third party home goods retailers have popularized augmented reality technologies to help shoppers envision how a sofa or chandelier would look in their current or soon-to-be home. Apps help eliminate buyers’ remorse and create emotional connections between a buyer and a property.

Key Takeaways

  1. AR/VR will have its biggest impact on real estate in virtual home tours that create a seamless 3D experience.
  2. VR home tours can allow users to make measurements and learn dimensions within a home, gauge an emotional appeal or “feel” from potential buyers toward a property.
  3. VR home tours provide buyers with added confidence to make purchases without physically being on-premise, and also facilitate a more global real estate market. 
  4. VR Technology helps provide real estate agents with valuable feedback about buyers’ interests in a home, enabling them to better market homes and accurately target interested buyers.
  5. Home furnishing and decorating AR apps allow customers to experience products in 3D before purchasing them, helping buyers to make decisions more quickly with more accurate information and also forge emotional connections to properties.


About Encora

Encora’s real estate solutions have contributed to the performance of a wide range of enterprises, governments, educational institutions, and non-profit organizations across the world. We have a highly-skilled team of professionals who excel in delivering customized, accessible solutions to meet any client’s needs. Please let us know how we can help your business tap into the potential of real estate solutions!  


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