Does Virtual Reality Help Property Sales? Empirical Evidence from a Real Estate Platform

Abstract

Virtual reality (VR) has emerged as a transformative addition to real estate platforms, creating an interactive three-dimensional (3D) environment for consumers to explore property information, revolutionizing property presentation. Using a large-scale data set from a leading real estate platform, we demonstrate that VR serves as an efficiency enhancer rather than a market value influencer. Specifically, VR reduces a property’s selling time by 28%–49%, without influencing the selling price, challenging the conventional premise that VR may help increase selling price. Our further analysis highlights VR’s role as a provider of rich and credible information: our findings reveal that properties requiring greater effort to evaluate, those of higher quality, or where agent service is lacking, benefit most from the technique. Our work benefits property sellers by identifying which properties are more suitable for VR presentation and showing VR as a technological supplement when agent service is not satisfactory. Platforms can leverage the result to target sellers to apply VR, particularly when resources are limited. The acceleration effect of VR can benefit agents by allowing them to manage properties more efficiently and help platforms to build an efficient and sustainable market.