PropTech is revolutionizing real estate in many markets across the world, and no more so than in the dynamic Middle Eastern hub of Dubai. The Dubai property market has undergone incredible growth and transformation in the last twenty years, since, the UAE opened its real estate market to foreign investment in 2002. Dubai’s ascent as a major economic, business and trade hub has lead to a real estate boom in the city, in which foreign ownership played a large part.
The UAE is an attractive market for foreign investors, with regulations making it easy to buy property as a foreign national, special visa arrangements for property owners and essentially no tax payable on property transactions. Although the market has somewhat flattened out in recent years, growth is predicted for 2020 and beyond, particularly in certain areas of the city such as Dubai Marina, due to its new developments and major events like the Dubai Expo generating strong interest.
In November this year PropTech experts from all over the United Arab Emirates (UAE) will gather in Dubai to discuss how the world of real estate is being changed by technology, whether it is a property finder for Abu Dhabi or software to improve agents’ processes.
Topics under discussion will include what buildings will look like, the Internet of Things and Artificial Intelligence for smart building; how they are sold, the role of big data in connecting buyers and sellers; the way virtual reality and augmented reality are changing the way houses are viewed, mobile apps for buyers and sellers; how they are financed, the blockchain revolution and the growing adoption of Cryptocurrency, crowdfunding and how they are managed.
From changing the way people buy homes to the way commercial property is being managed, PropTech is changing the way the world lives and works. This will leave a gap that smart landlords will aim to fill. They’ll provide a building that supports a tenant. Seamless access control system, ability to order food, book classes, report issues. In the 21st century smartphones allow us to remotely control our surroundings. Tenant experience apps are a promise of exactly that in our working environment. Experts say that the world is due to see buildings with “operating systems” providing direct contact with tenants and allowing for smart phones to play a major role in the way people live and rent.
In a study done by KPMG in 2018 under 130 real estate decision makers worldwide the impact of PropTech is viewed as largely positive with 86% of respondents recognising it as an opportunity, but almost all (92%) said it would definitely impact on their business. The majority of respondents recognised the impact PropTech had on their businesses (74%). Just over half of respondents (53%) said that big data and analytics were the trends they would seek to implement in their businesses over the next three years with 49% saying they will seek collaboration with other firms to increase their technological capabilities.
In discussing these results, KPMG’s Andrew Weir wrote in his foreword to the report that “every sector is facing the challenge of moving from an industrial past to a digital future. He stressed that the links between digital and the built environment was being reshaped by the fourth industrial revolution. “As in other industries,” he added, “fast-growing businesses are emerging with new solutions to industry pain-points and are coming up with more effective and efficient ways of engaging with customers or transacting. Property firms now find themselves having to keep up with new competitors, as well as with existing peers.”
More than two thirds of UAE home buyers are gathering information about a prospective real estate transaction by using technology, according to a press release explaining extensive research by HSBC done in 2017.
Kunal Malani, Regional Head of Customer Value Management, Retail Banking and Wealth Management, HSBC, MENA was quoted in the statement as saying: “The process of buying a home in the UAE will change substantially in coming years. It will be a more streamlined transaction, with buyers and sellers having greater control and relying much more on technology. These efforts are being led by UAE smart government and Smart Dubai initiatives, and forward-looking government entities and regulators such as the Dubai Land Department (DLD) and its Real Estate Regulatory Agency. By putting a growing number of databases and services online, they are demonstrating the early power of PropTech and helping to simplify the home-buying process.”
PropTech companies offering services in the UAE include an investment map portal that gives investors and businesses practical information on ongoing real estate investment projects, a trust account system app to manage the registration of property developers and their projects and Ejari, an app for renting property.
The study found that the majority of buyers went online to check on available properties (72%), check the value of their current homes (67%), find out more about taxes and regulations (65%), research neighbourhoods (65%) and compare home prices (64%).
The global research report, titled Beyond the Bricks, looked at the behaviour of 9000 people globally of which 1000 resided in the UAE. Its findings were in line with forecasts that PropTech will disrupt the property sector as artificial intelligence and virtual reality change the way people buy homes and 24/7 chat would alter the way properties are managed.
At the time the HBSC study found the level of PropTech use in the UAE is lower than in the other countries surveyed and that potential home buyers were also reporting a larger degree of stress during property transactions.
The rise of PropTech however promises a significant increase in certainty to buyers with changes in the way properties are valued and the way mobility technology change the way buyers make their decision and how people live.
In the past few months there has been significant movement in the PropTech market in the UAE. At the MIPIM property conference held in March experts discussed the role of PropTech at length highlighting interest in Dubai as a city with a chance “to start from scratch” according to reports generated at the conference.
The private sector has also participated in this trend by creating more smart property listings, mortgage comparison, marketing platforms with links to online brokers and agents, and online real estate data analytics sites to help homebuyers make a more informed decision.
Last month Maisonette, a PropTech company headquartered in Abu Dhabi, unveiled its software solutions automating all business functions in real estate, at the city’s largest real estate event. The company’s software can streamline and link tasks normally performed by separate departments in real estate agencies, cutting costs and increasing productivity.
In April 2019 UAE property listings and research company Bayut acquired Lamudi, a rival portal owned by Middle East Internet Group, for an undisclosed sum according to industry reports as the PropTech revolution leads to a rising number of mergers and acquisitions in the UAE’s real estate portals.
In Dubai, one of the world’s most dynamic real estate markets, PropTech is emerging as a major force. More and more players in the industry are learning of the benefits that can be gained from integrating PropTech into their businesses, and as they start to do so, industry leaders will soon gather to discuss PropTech at a major conference. This is opening up not only opportunities for greater efficiency and business success for existing real estate businesses, but also opportunities for new enterprises to develop based around the technology. It seems that PropTech will help this already thriving market to reach new heights in 2019 and beyond.