Real estate expert Jane Slack-Smith has turned herself into a property bot, named AI Jane, but won’t let her digital self advise buyers where and what to purchase.
Melbourne homebuyers have been warned over trusting AI to help their housing hunt.
Expert testing has revealed computers are offering dud advice that could cost families and investors hundreds of thousands of dollars, often struggling to spot nuances as significant as units versus houses and ignoring specific inputs.
Testing for Melbourne by MCG Quantity Surveyors has found with basic prompts the AI would ignore a $1m budget and instead recommend affordable units from $455,000-$650,000 in Box Hill, Footscray and Clayton — which have significant amounts of development in the pipeline likely to erode future price growth.
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Even with professional prompts and guidance, as well as supplied data, the AI ignored the provided figures, was still biased towards units and areas where significant development of new housing is still ahead, including Sunshine, Footscray and Melton South — the only area it recommended a house.
Report author Mike Mortlock, the director of financial group MCG Quantity Surveyors, noted there had been a rise in buyer’s agencies and other investment groups spruiking AI models that helped pick investment locations.
He said while it could be good at writing a letter or email, this provided a false sense of security and the research showed the suburbs and housing AI picked were problematic.
“It seemed to overvalue some keywords. In this case, it overly focused on rental yields,” Mr Mortlock said.
This two-bedroom Clayton apartment recently sold for $2550 less than it did in 2017.
MCG Quantity Surveyors’ Mike Mortlock said the testing showed risks following the insights provided by AI.
He speculated AI might have inherited bias from the wide range of web marketing content aimed at selling units in new high-rise apartment projects.
“Part of the problem is that we don’t know exactly what’s under the hood and what AI is drawing on to produce these outputs,” he said.
Mr Mortlock added that AI actually developed worse outputs as more property information was fed into it.
“When we gave it more context, provided 10 years of trends, and lots of data points, it worked worse. It misrepresented data we had given it,” he said.
Woodards Yarraville partner Leo Dardha said units in Footscray could be a good investment, but buyers had to factor in much more detail than the AI clarified including looking for larger sizes, quiet streets and complexes with no more than 20 homes in them.
“But I wouldn’t take action purely just on AI,” Mr Dardha said.
This two-bedroom unit in Footscray sold for $530,000 last month, $10,000 less than it earned in 2021.
Sold for $570,000 last month, this two-bedroom Footscray unit has gained just $5000 in five years.
Prolific property investor and tech industry entrepreneur Danny Wallis said while he used AI “for everything”, especially staying up to date with government announcements around investment properties and landlord obligations, he never used it to select investment spots.
“Most people don’t understand what the thing is, it’s not artificial intelligence — it doesn’t have intelligence, it just scrapes the web,” Mr Wallis said.
“It doesn’t think, it can’t think. It’s using historic data and that’s why it can’t predict.”
He advised those wanting property advice to use AI platforms that were specifically designed for real estate use, and to never accept the first answer.
Melbourne property expert and mortgage broker Jane Slack-Smith was a finalist in the inaugural Australian AI Awards for her Property ChatAI program last year.
It took in four million data entries and 20 years of her property advice, which she then used to turn herself into AI Jane to advise people as a specialised property AI.
Jane Slack-Smith is an author, media commentator and property coach — and has turned herself into a real estate bot: AI Jane. Picture: Mark Stewart.
A two-bedroom villa unit in Clayton is likely to outperform apartments with the same number of bedrooms in the same suburb. This one notched a $143,000 increase from 2016 to 2025.
But she specifically programs it not to provide advice on suburbs or specific properties to invest in.
“The cautionary tale I used to tell was of when you jump into a taxi and say ‘I’m going to buy a home’, and the driver will have had four other passengers who said they’re buying a two-bedroom unit in Clayton,” Ms Slack-Smith said
“But that’s all the information they have, and that’s the progression I’m seeing with AI.”
She noted there were definitely areas where AI could support and help homebuyers, but those who weren’t highly experienced with AI and knew its pitfalls, should stick to AI-enhanced programs designed for housing.
She pointed to the still in development Investors Choice app that was expected to be able to, in a matter of seconds, cross-reference a 70-page building report with Archicentre information to estimate costs to remedy a home before you agreed to purchase it.
Melton South homes were also nominated by the AI as a good investment option. This one recently sold for $565,000 after earning $410,000 in 2019.
Box Hill units can perform well, but buyers need to know what to look for — this one sold for $670,000, up from $126,000 in 1993.
“AI when used correctly can give you insights that are beyond your knowledge and allow you to be aware of opportunities and issues that can make you, or cost you, hundreds of thousands of dollars,” Ms Slack-Smith said.
Prominent buyer’s agent and Property Investment Professionals of Australia chair Cate Bakos said she’d encountered buyers who had used AI, but usually only after they realised the responses they were being given didn’t stack up.
While many were investors looking at Victoria from interstate, she said others were just people who think “AI is a silver bullet”.
“There’s a lot of people placing a lot of faith in tech, whether that’s ChatGPT or something else, but it doesn’t tell the whole picture.”
How the AI was tested:
Prompt, basic details:
List three suburbs in wider Melbourne with 4 per cent or higher yields to invest $1m that has the best growth chance for five years.
Response to 50 word prompt:
1 or 2-bedroom apartment in Box Hill
Price: $500,000-$525,000
Rent: $580-$610 a week
Drivers:
• Suburban Rail Loop (SRL) East under construction — station at Box Hill, tunnelling starts 2026;
• Strong international student & healthcare employment base (Box Hill Institute, Hospital);
• Entry pricing reset post-2023 oversupply;
• Sustained rental demand from education and hospital sectors.
2-bedroom unit in Footscray
Price: $455,000-$480,000
Rent: $515-$520 a week
Drivers:
• West Gate Tunnel opening late-2025 will reduce CBD travel time;
• Metro Tunnel operational by Feb 2026 (CBD network capacity uplift);
• New Footscray Hospital (opening Feb 2026) brings 5,000+ jobs;
• Significant gentrification and retail renewal through Footscray CBD;
• Short-term price softness = strong re-entry point.
2-bedroom unit in Clayton
Price: $650,000
Rent: $580-$590
Drivers:
• SRL East – Clayton Station under construction (major interchange);
• Located in Monash National Employment & Innovation Cluster (~75k jobs);
• Deep rental pool: students, researchers, healthcare staff;
• Excellent long-term fundamentals with access to MCity, Monash Uni, hospitals.
Concerns: Ignored $1m budget, only selected units, did not account for future supply reducing growth potential
Response to 300 word prompt for deep research, with data supplied:
2-bedroom unit in Sunshine
Price: $530,000
Rent: Not supplied
Drivers:
• Melbourne Airport Rail (~2029) via Sunshine Sunshine Station “Superhub” (>A$4b works + A$2b federal boost) by ~2030;
• Melton line electrification enablement; designated Metropolitan Activity Centre.
2-bedroom unit in Footscray/Maribyrnong
Price: $480,000-$500,000
Rent: $510 a week
Drivers:
• New Footscray Hospital (~A$1.5b, 500+ beds) due late-2025/early-2026;
• West Gate Tunnel (end-2025) + 24/7 inner-west truck bans;
• strong train/tram access and Metro Tunnel adjacency.
3 or 4-bedroom house in Melton South/Cobblebank
Price: $475,000
Rent: Not supplied
Drivers:
• New Melton Hospital (>A$900m, 274 beds) due 2029;
• Sunshine “Superhub” capacity uplift; Melton line electrification works from 2026;
• Expanding schools/retail;
• Improved CBD rail connectivity.
Concerns: Ignored $1m budget, only selected one house option, data supplied was ignored, no reference to upcoming supply and risks to future growth
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