Real estate marketers face rising costs as Google AI eats into search traffic

Google’s AI Overviews are reshaping how consumers search for property online, and India’s real estate ecosystem is already confronting the fallout. Brokers, builders and property marketplaces say the feature is increasingly absorbing hyper local, high intent queries that once drove steady traffic to listing platforms and developer websites. With AI summaries delivering answers directly on the results page, fewer users are clicking through, shrinking both organic and paid funnels, especially for city and micro market searches.

As the available ad real estate narrows, competition for visibility has surged. Marketers report that CPCs have risen sharply, in some cases by up to 70% in competitive micro-markets and consistently by 15–30% across major geographies. Premium categories and project-specific keywords such as “3BHK in Noida” and “new flats in Thane” are seeing the steepest spikes. The reduced click flow has pushed CPLs even higher, as fewer users land on listing sites or developer pages.

To maintain earlier levels of qualified traffic, marketers say they are now spending around 20% more on Google-led campaigns while aggressively optimising budgets, cutting wasteful keywords, and shifting more investment toward efficient channels such as Meta remarketing, influencer-driven walkthroughs, community engagement, lead forms, and call ads. Even so, many believe the drop in high intent traffic is structural, signalling that real estate advertisers may need to rethink their long-standing reliance on search-heavy performance strategies.

Simply put, the cost of maintaining visibility has risen sharply for real estate brands.

For many marketers, the spike goes beyond cyclical fluctuations. “The sharp rise in acquisition costs driven by Google’s AI Overviews has required a fundamental recalibration of our marketing approach. High-intent keywords, which previously served as reliable lead engines, are now far more volatile and expensive,” said Karan Kumar, Chief Marketing Officer, Hero Realty. He added that while paid visibility remains critical, it can no longer anchor their strategy. The focus has shifted to building a broader, more defensible ecosystem where brand recall, authenticity and consumer trust reduce dependence on increasingly expensive performance traffic. This blended approach, he said, is helping brands stay visible without overspending.

The brand is also seeing digital marketing costs climb sharply. Kumar adds that search-led campaigns have been hit the hardest as AI Overviews shrink available ad space, inflating CPCs and CPMs. For Hero Realty, CPCs are up 15–20% on average, even higher in premium categories, while CPLs have risen more steeply as fewer users click through to listing sites. To match performance from six to nine months ago, the company is spending around 20% more on Google campaigns.

Similarly, RPS Group reports a 15–20% increase in spending just to maintain earlier lead volumes. “This spike is very strong in competitive markets, especially in NCR, Mumbai, and Bengaluru. The biggest shift is that what used to be predictable performance spending now requires far more optimization to avoid cost leakage,” explained Shashank Gupta, Director of RPS Group. 

For them, AI Overviews have pushed CPCs up 20–30 percent - higher for locality driven and project specific keywords, while CPLs have jumped nearly 30 percent as click throughs fall. They see this as a structural drop in high intent traffic. To stay efficient, teams are refining keyword sets, prioritising deeper intent searches and leaning more on lead forms and call ads, a shift Gupta says highlights the need to move beyond search heavy strategies.

According to Sunil Mishra, Chief AI & Strategy Officer, ANAROCK Group, digital marketing is gaining traction in India's real estate sector, but the extent of its use varies considerably depending on the builder's scale and experience. He said that by 2025, the cost-per-click for real estate on Google Search had climbed to between INR 30-100, while the cost-per-lead statistics were INR 500-1,300 for affordable housing. Ultra-luxury homes, however, saw costs exceeding INR 4,000 per lead, which naturally led to a re-evaluation of how budgets were being spent. 

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The response

To maintain earlier levels of qualified traffic, marketers say they are now aggressively optimising budgets, cutting wasteful keywords and shifting more investment toward efficient channels such as Meta remarketing, influencer-driven walkthroughs, community engagement, lead forms and call ads. Many believe that staying visible now requires full-funnel reinforcement.

Suneet Singh, CMO - Whiteland Corporation said, “For flagship offerings like Westin Residences Gurugram, richer storytelling assets have become essential to hold consumer attention beyond search-led discovery.”

Mishra added that developers are increasingly shifting from traditional SEO to Answer Engine Optimisation (AEO) by creating structured, query-led content that positions them as authoritative sources inside AI-generated summaries. Rising click and lead costs are also accelerating adoption of AI-driven qualification tools, chatbots and predictive analytics, while creative teams focus more on location-specific content and strengthening the local business presence.

“By combining AEO with conventional sponsored search, developers' digital marketing partners can draw in leads from a variety of sources and efficiently control growing acquisition expenses with more intelligent lead grading and automation,” Mishra highlighted. 

Reallocation of spends

As Google’s AI Overviews absorb the first layer of discovery, marketers are rebalancing budgets toward Meta, YouTube, influencer collaborations, and NRI/micro-market channels.

Keshav Mangla, GM – Business Development, Forteasia Realty stated, “Instead of depending solely on performance campaigns, we're balancing brand-building with targeted lead generation. The aim is always to ensure visibility-even when Google absorbs the first layer of discovery through AI summaries.”

Singh of Whiteland Corporation explained that budgets are being strategically realigned as Google Ads grow costlier for high intent real estate searches. More investment is now flowing into AI led SEO and content authority building, long form storytelling and video discovery, influencer driven credibility, and WhatsApp automation for higher conversion efficiency, along with micro market and NRI focused channels where relevance and ROI remain strong.

For Hero Realty, the reallocation is deliberate rather than reactionary. Kumar says the team is shifting more investment toward mid-funnel channels, such as YouTube, Instagram video and native content which strengthen assisted conversions and lower dependence on costly last-click traffic.

“We are also strengthening first-party data ecosystems, retargeting pools, and CRM-led nurturing so that every paid click delivers more lifetime value. The goal is not to reduce visibility, but to ensure our visibility is not held hostage by rising keyword costs. This reallocation is already improving efficiency across the funnel,” he noted. 

Meanwhile, Mishra highlighted the appeal of these channels, noting that integrating WhatsApp with Meta lead forms has streamlined lead capture and enabled immediate qualification and routing to sales teams. “Even if Google DV360 is a major player, independent app networks are proving to be more lucrative. Some of these networks are delivering returns on investment of above 200% - a massive improvement over conventional advertising spends.”

Alongside digital adjustments, neighbourhood-level branding and DOOH are gaining traction. Gupta of RPS Group says they are increasing investments in micro-market visibility to strengthen recall, ensuring buyers encounter the brand across multiple touchpoints, not just on Google, which he sees as essential in an AI-filtered ecosystem.

UX/UI perspective

According to Kishor Fogla, Founder of Yellow Slice, the shift makes strong UI/UX more critical than ever. With organic visits declining, every interaction must work harder, he says. Brands now need user centric, conversion efficient interfaces that communicate value instantly while minimising friction to boost engagement and conversions.

He stated, “As Google reshapes user expectations around immediacy and clarity, real estate platforms have to respond with streamlined architectures, intuitive navigation, and content designed for both human understanding and AI interpretation. A stronger UX foundation helps temper rising acquisition costs by improving onsite performance, boosting retention, and amplifying brand trust.”

Ultimately, AI Overviews have made one thing clear: real estate marketing can no longer depend on Google’s high-intent clicks to do the heavy lifting. The brands that will stay ahead are those building broader discovery engines such as stronger content, richer storytelling, better UX and deeper first-party ecosystems. As search becomes more filtered and competitive, resilience will come from reducing dependence, not raising bids.