It offers a seamless experience to customers and more efficient transactions for brokerages
FARHAD AZIZI
CEO, Azizi Developments
Real estate markets are driven by a mix of short-term cyclical factors and longer-term structural changes. While much of the focus in the coming year will be around Expo 2020, it is important to see beyond the short-term trends and consider how they fit into the long-term structural plans, which impact investors, developers and occupiers. Towards 2020, the economy is predicted to grow, with the PMI showing some positive indications. Driven by this, several government initiatives and the preparations, including the onset and after-effects, Expo 2020, we have great faith that there will be a surge in residential property demand.
At a time when the world is progressing and embracing technological innovations in all sectors, the UAE is leading by example. From healthcare to transport, the country has embraced the latest technological innovations across all sectors. Among all, the real estate sector has seen the most seismic changes — the processes of buying property, construction, maintenance, sales and mortgage issuance have all changed significantly over the past few years. Technology has seeped into every process of real estate, giving rise to a new term — PropTech.
What is PropTech?
PropTech is a portmanteau of the words property and technology and used to describe the wave of technological innovations shaping real estate markets across the world. It started taking precedence in the early 2000’s as PropTech 1.0, is now well into phase 2.0 and evolving over the years for its 3.0 iteration where it will witness further integration into the mainstream real estate market.
PropTech is no longer just an idea. It is as real as the concept of robotics and artificial intelligence. It is deemed as key to unlocking the true potential of the real estate sector and has already received positive feedback. Companies are now investing in real estate technology to an appreciable extent. CB Insights states that investment in PropTech startups soared from $20 million in 2008 to a whopping $12 billion in 2018. In the first half of 2019, global investment into real estate tech startups had already reached $12.9 billion. This produced some famous and highly valued startups such as WeWork and Airbnb. The PropTech sector has lately been attracting several venture capitalists as well as talented entrepreneurs, making it one of the most important realms of technological innovations.
The only expected challenge for PropTech will be posed by consumers, who might take time to understand and adapt to it. Developers and other industry players therefore need to lead the way
End-user benefits
Investors are utilising property technology to make well-informed, data-driven decisions. Looking at it from a wider perspective, PropTech acts as a crucial tool for the real estate sector to exhibit what Dubai has to offer.
Beyond its role in the construction industry, where technologies such as 3D printing are already a reality, PropTech can also help elevate the real estate customer experience. It makes information available at the click of a button without the need to visit real estate brokerages and offers more variety of properties to choose from. It offers property buyers another dimension and important insights into the sector – the 3D viewing of units and more comprehensive lists of properties that are customised to their specific needs are just two of the many benefits that the technology will bring about.
PropTech uses technology such as virtual reality, automated payment systems, digitised, cryptographic property-related transaction platforms, detailed online property listings, targeted real estate marketing, and much more. The aim is to create a seamless experience for customers while also making property investment accessible and manageable for everyone.
Brokerage benefits
Buyers and renters are more aware, empowered and educated in their decision-making processes now than ever before. Property technology also entails substantial benefits for real estate brokers, granting them more time, improved quality of listings, efficient transactions and ease of processes. The technology will help tackle consumer behaviour through tools that can explain changing consumer preferences. It will also allow agents to better utilise their time to provide more transparent and convenient customer service.
The UAE: A home for PropTech
With PropTech taking over the property landscape, the UAE is innovating and modernising, thanks to the country’s ability to embrace evolving technologies. This is paving the way for disruptive innovations. Dubai is moving towards its goal of becoming a smart city and PropTech has a major role to play. Changing the dynamics of the UAE property market, the technology is making waves for all the right reasons.
With a supportive leadership, upcoming events like Expo 2020 and the new freehold and visa-related reforms, Dubai has the potential to serve as a launchpad for PropTech penetration. Several tech startups continue to make the emirate home in order to tap the lucrative real estate market.
The UAE has already seen a huge evolution in its real estate industry. Till just a decade ago, property investors were required to do a lot of manual paper work whereas today, with innovative property technology, they can access all relevant information online with just a single click.
The way forward
PropTech has a lot of potential and it is high time that businesses start embracing this wave of technological advancements to keep pace with evolving demands. For real estate investors, and developers specifically, it is important to identify areas that PropTech can enhance and make more efficient.
There needs to be more awareness of how to integrate property technology solutions into the very fabric of real estate. It is only after we fully understand its benefits, limitations and uses that we can unlock its full potential to develop the real estate sector. The only expected challenge for PropTech will be posed by consumers, who might take time to understand and adapt to it. Developers and other industry players therefore need to lead the way.
With time, the concept of PropTech will emerge as even more of a game-changer for the UAE real estate market and the world as a whole.
