Savills: Economic optimism and AI to drive global real estate in 2026

Investor confidence is returning to global real estate markets, with falling interest rates and rapid advances in artificial intelligence (AI) expected to be the most influential forces shaping the sector in 2026, according to new research from Savills.

In its annual outlook, the property consultancy identifies seven key themes that will define market activity over the coming year. While economic indicators remain the most important driver, technology has risen to second place in the global rankings, reflecting the accelerating impact of AI on occupier behaviour and asset demand.

Savills forecasts that global real estate investment turnover will surpass $1 trillion in 2026, the highest level since 2022. The firm attributes this to growing occupier demand and increased capital availability, supported by interest rates trending closer to neutral despite remaining above pre-pandemic levels.

AI is expected to reshape workplace strategies and boost demand for digital infrastructure, particularly data centres. The report also highlights the growing role of PropTech in delivering efficiencies across building operations, from predictive maintenance to automated property management.

Demographic shifts and behavioural changes continue to drive demand across sectors. Population growth in India, Saudi Arabia and Vietnam is fuelling real estate activity, while migration and wealth flows are sustaining demand in cities such as Dubai and Abu Dhabi. Savills notes increased demand for high-quality office space, experiential retail and residential products aligned with modern lifestyles.

Environmental pressures remain a major concern. With recent extreme weather events and a shrinking window to meet climate goals, regulatory responses are intensifying. In 2026, the EU’s Energy Performance of Buildings Directive will come into force nationally, while Australia plans to introduce mandatory climate reporting. Compliance costs are expected to rise, making retrofitting a critical priority for asset owners.

Geopolitical tensions and trade policy shifts are also influencing real estate, particularly in logistics. The report cites ongoing diversification of supply chains and the adoption of China+1 strategies as factors driving demand for warehouse space in a broader range of locations.

In the residential sector, domestic political pressures are driving legislative changes aimed at improving housing affordability. Measures such as rent controls and planning reforms are gaining traction, though Savills warns that regulatory clarity will be essential to support continued institutional investment.

Finally, the report anticipates a broader focus on social and governance considerations within ESG frameworks. As investors increasingly view social value as integral to long-term resilience, Savills suggests that the definition of best-in-class assets will continue to evolve in 2026.

The outlook reflects growing complexity in global real estate markets, with intersecting economic, technological, environmental and political forces shaping investor strategy and occupier demand.