Property technology (PropTech) has built a bridge between buyers and sellers by bringing both parties together and facilitating transactions between them in a transparent, secure and efficient manner. Thanks to technology, all property-related information is only a click away.
PropTech has opened doors for developers to digitize transactions as well as market their properties beyond geographical barriers. It has transformed the real estate business model from back-office design to an omni-channel customer experience by offering virtual tours of the properties without being physically present. A large portion of the real estate development and sales process in the UAE will involve some form of property tech this year.
This evolution has happened in phases. The first phase was marked by the emergence of “property classifieds” which made it easier for the buyers to browse through various property options. The second wave was in assisting the sales process by enabling full-stack transaction closure, thereby reducing third-party involvement. The third wave has been underscored by the use of AI and Deep Tech for estimating inventory overhang, expected rental yield, sales price predictions, evaluating real estate properties, identifying through LiDAR the geospatial catchment areas/clusters where to invest, real estate crowdfunding platform and, allowing partial ownership of residential, commercial and retail properties.
Real estate crowdfunding is estimated to reach $9 billion globally by 2021, with the potential to resolve the capital requirement problem for less financially capable buyers.
In the Middle East, the U.A.E. government has announced ambitious plans to use 3D printing techniques in the emirate, with the target of constructing 25% of the buildings via 3D printing by 2030. The government envisions building smart cities with blockchain technology, artificial intelligence and data science. U.A.E. developers have also proactively embraced the use of advanced technology, with Emaar promising to build its first 3D-printed house in Arabian Ranches III and DAMAC Properties launching digital customer service and facilities management portals to enhance customer experience.
The government has also set benchmarks for real estate companies by launching various initiatives, such as: eMart—a smart property marketplace; Ejari—a platform to streamline administrative functions of lease management; and Dubai Blockchain—a transactional platform that can monitor property transfers and deed management that take place virtually.
Numerous startups have introduced technologies such IoT and AI for smart buildings, virtual and augmented reality to change the journey of viewing and purchasing a property. All these technologies will enable the real estate sector to move from an “industrial past” to a “digital future”.
While PropTech enables seamless and transparent transactional activities, as with any technology, there are several hurdles to overcome. The use of virtual reality raises a number of IP issues such as ownership of the underlying code, while IoT increases vulnerabilities to cyber-attacks and loss of confidential data. However, the two barriers most difficult to overcome are the limited target customers and huge investments required in the industry. PropTech is currently more readily adopted by younger generations who are more comfortable with technology integrated into their daily lives.
However, U.A.E. customers have reacted positively. Recent research found that 67% of U.A.E. property buyers used online tools to view the valuation of their current property, and 72% of property buyers in the U.A.E. browse online portals before making a decision. This clearly indicates an increasing inclination of real estate buyers towards PropTech, and this is expected to continue into the future.