The real estate industry is experiencing very wide ranging and comprehensive changes, driven by innovations that technology is making possible. There is virtually no aspect of the business that is untouched by the enabling power of technology and the promise of transformation. Technology is disrupting business-as-usual in a myriad different ways within the sector. The role of Virtual Reality (VR) and Augmented Reality (AR) in marketing, tech enhanced asset and portfolio management and the deployment of Internet of Things (IoT) and Artificial Intelligence (AI) in buildings, are only a few of several more such innovations. In this context, Proptech Middle East 2018 is an important forum and significant opportunity for the UAE property sector to be inspired by and embrace these changes.
Every aspect of our personal, public and professional lives is experiencing the rapidly incremental effect of technology. With computing power, groundbreaking solutions, connectivity and mobility coming together so synergistically, it should not surprise anyone that our built spaces and the way we interact with them are being redefined. The fact that the industry itself, as well as its customer base, are both briskly and enthusiastically adopting platforms, innovations and devices that enhance their interactions heralds the beginning of a new normal. The coming together of industry professionals, and several global and regional stalwarts, will be seen as an inflexion point by the local real estate industry, in the future.
Globally, the rise in the perception of the real estate industry – as a space that technology can transform – is perhaps best indicated by the fact that more than $5 billion worth of venture capital was attracted by technology specific to the industry, in 2017 – as opposed to merely $33 million as recently as 2010 (1). Real estate specific start ups are some of the most valuable and exciting companies to emerge in recent years. Until the recent past, industry facing real estate tech companies had disproportionately concerned themselves with creating the next generation of systems for property management and aggregation platforms. More recently, however, solutions are focusing on valuation, analytics, workflow, databases and smart buildings, among other applications. Startups such as WeWork and Airbnb are also introducing entirely new business models into the industry’s eco-system.
A recent study commissioned by Facebook found that mobile devices alter the user’s perception of time (2). Mobile users perceived a video presentation as being 30% shorter than those viewing it on a desktop device. Mobile purchases were also measured at 13% faster. This altered perception is also reflected in user’s perceptions of convenience and lifestyle. Clearly, an industry as customer centric as real estate cannot afford to ignore these changes in its target audience. In several of the channels that investors and buyers use to communicate with the industry, this ease of interaction is already standard. It will soon no longer be the case that the average consumer views the technologies that enhance their experience of built spaces as a premium service; they will be expected as typical and conventional features.
Perhaps one of the most remarkable technologies emerging today, Blockchain has the power to transform every aspect of the UAE real estate sector – from securing public records and transactions to enhancing supply chains, maintenance, smart homes and virtually every other function in the industry. The technology’s greatest strength, however, could be to transform Dubai’s real estate market through impeccable transparency. The Blockchain 2021 strategy (3)– instituted by the UAE government’s Smart Dubai agency – is likely to create a significant momentum for the UAE real estate industry, by adding to the confidence and interest of global players like retirement funds and institutional investors. The Dubai Land Department is one of the world’s first government regulatory bodies to adopt Blockchain, in the world. Its initiative has paved the way for an unprecedented level of security and transparency in property transactions. Apart from almost completely ending instances of fraud, real time generation of distributed and immutable records will allow the industry the ability to synergize activities and to react optimally to opportunities and challenges.
The UAE has some very specific advantages and characteristics that will drive the short term as well as larger transformation that technology is introducing to the real estate industry. Some of these disruptions are non-negotiable and will alter real estate transactions and trade fundamentally – such as the Real Estate Self Transaction (REST) portal proposed by the Dubai Land Department (DLD) (4), which is specifically aimed at cutting out property management and service agents while reducing paper documents. Several other innovations will be driven either by their economic and operational strengths or as a result of market expectations assuming a new normal. As a nation actively positioning itself as a community that embraces digital transformation in every walk of life, the UAE is particularly poised to enter a new phase of tech enhanced living.
In the context of these innovations and their active uptake in the UAE, Proptech Middle East 2018 is a significant marker for the regional real estate sector to recalibrate and redefine. It is not merely the case that those that lag could lose market share and revenue. It is, in fact, more accurate to say that these changes will be the baseline measure of relevance and competitiveness.
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