Proptech in the UAE is a very interesting one owing to the economy and resources of the Emirates as well as the technology advancement of here.
The country of United Arab Emirates (UAE) is a federation of 7 emirates, mainly along the Persian (Arabian) Gulf. While people mostly think of Dubai as soon as one mentions UAE, its other emirates are Ajman, Ras-al Khaimah, Sharjah, Fujairah, Umm al-Quwain and its capital city — Abu Dhabi. Dubai is UAE’ s most populous, an international aviation hub as well as a global city. One can get a good view of the UAE real estate market by seeing the high tech real estate development in a concrete jungle/sci-fi type city like Dubai, with its advanced tourist attractions, shows, malls, and hotels.
Dubai is also home to the world’ s tallest human-made structure in the world- The Burj Khalifa. This says a lot about the real estate development here and gives a good start to understand proptech in the UAE. Their oil reserves are the world’ s seventh largest, and it also boasts of a GDP of USD 460 billion in 2019, housing a population of 9.2 million. Interestingly, only 1.4 million of this entire population is locals (i.e. Emirati citizens), and the remaining 7.8 million are expats (i.e. expatriates) that have made UAE their home. This expat population, combined with the tourist population, continues to drive the growth of real estate as well as proptech in UAE. As fintech happened to the finance sector, the property sector is getting disrupted with technology, giving birth to the new buzzword — proptech. It is interesting to take a look at the real estate sector of UAE and the technological developments here to then understand proptech in UAE. Real GDP for the UAE’s non-oil sector is expected to grow at 4.1 per cent between 2019 and 2023 as compared to 2.8 per cent accounted for in the 2014-2018 period.
Why proptech makes UAE very promising
The future looking country of UAE has been witnessing a resilient real estate industry that is ripe with many lucrative opportunities. Some of these factors attributing to the same are high oil prices, effective governance at the emirate and federal level, tourism boom as well as recovery of the global economy. This helped build a solid infrastructure for the UAE and focus on the growth of the real estate sector of here. It also helped attract foreign investment, which in turn helped the UAE develop in more sectors beyond the strength of oil.
Mainstream residential prices in Dubai fell by 4.1% in 2018, according to the latest Property Monitor Index. While villa prices fell at a faster pace at 6.1 percent, apartments fell by 4.8 percent over the same time period. November 2018 data shows that of the 61 communities and property types tracked in Dubai by Property Monitor, only one area has registered an annual increase in prices. Dubai’s gross domestic product as of 2018 was US $102.67 billion.
Dubai is now focusing on other industries that contribute to the GDP, a focus that Abu Dhabi is also going to adopt in line with Abu Dhabi’ s Vision 2030, one that also mentions focusing on real estate sector as an industry. Dubai’s gross domestic product growth expanded 2.8 per cent to Dh389.4 billion in 2018 according to the Department of Economic Development’s (DED) Dubai Economic Report 2018. However, the UAE economy as a whole achieved a lower growth of 0.8 per cent in the same period.
Dubai’s real estate activity grew by seven per cent in 2018 and accounted for nearly 25 per cent of the total growth. Due to the strength of its real estate sector, the UAE generally maintains a positive outlook for the economy. This also ensures that regional and international investors keep interested in this market. With the continued influx of expats and favorable demographics, UAE will continue to be ripe for investment. The upcoming Expo 2020 is sure going to add to the real estate development of UAE. This sets the stage for technology to come in and develop proptech in UAE, or add to its proptech sector.
Technological advancements in UAE and its impact on proptech
To fully understand the deployment of technology in the UAE, we could quote a few very interesting instances that shall help us envision the market. Sheikh Mohammed bin Rashid, the Vice President and Prime Minister and Ruler of Dubai, announced ambitious plans to develop and deploy 3D printing techniques in UAE. This was estimated to have a $550 billion impact on the global economy by 2026. To continue UAE’ s quest to drive innovation, he also set targets for a quarter of journeys in Dubai to be driverless by 2030. He also shared another target for 2030, of having 25% of all buildings in Dubai to be 3D printed constructed.
The UAE government also intends to make cities smarter, by using digital technologies to improve the lives of the citizens, making processes more efficient and sustainable. Disruptive technologies are helping Dubai plan for the future and avoid potentially expensive pitfalls. It is also important to note that Dubai is the hub and hotbed for these technological innovations, while the other emirates are starting to catch up. This makes Dubai ripe to lead debate of proptech in UAE and to promote its proptech sector.
It is fair to accept that the proptech disruption has entered the UAE market and it is bringing in proptech in UAE. Research by HSBC reported that two-thirds of UAE homebuyers are turning to digital methods to get more information for their homes. 72% of UAE property buyers search for available properties online, 65% research where to live, and 64% explore prospective home prices. The property websites of here are increasingly turning towards technologies of virtual agents, artificial intelligence (AI) and virtual reality (VR) to disrupt the home buying process and drive proptech in UAE.
It was also reported in the research by HSBC that the potential for Proptech is highest in UAE, as compared to other eight countries surveyed. It is also because UAE respondents reported higher stress during the home buying process.
Not just privately, the Dubai Government is driving the proptech in the UAE too, with increased efforts by the Dubai Land Department (DLD). Some of the leading efforts of the DLD include Ejari, which is a lease application and management app; the Trust Account System app for registration of developers and their projects; and the Investment Map Portal, online real estate investment portal for investors and businesses. DLD also offers an app for licensed, and DLD approved property brokers, called Dubai Brokers. To make the process for procedure payment easier, DLD has the Smart Pay Service via governments secure channels.
There are a number of technologies that are driving the sector of proptech in UAE, and making proptech flourish here. Drones with cameras are being sure for inspection as well as video purposes, and Virtual Reality has changed the way developers are promoting their projects, and well as how a customer views new homes. 3D Printing is increasingly used to construct homes in Dubai. A number of developers are also using Big Data to design better real estate and homes, understanding user behavior as well as using insights for promotion. Internet Of Things (IoT) has also entered UAE in a big way, with the government looking to make smarter cities and region. There are some companies even experimenting with Blockchain Processing, to change the proptech in the UAE and give a boost to proptech.
Startups in proptech
UAE is also the home to proptech startups that are modernizing the real estate process and helping consumers find their dream homes:
Bayut was founded in 2008 and is the leading UAE & Dubai property portal. It is focused on empowering home hunters with expert information and advice to make informed decisions about their homes. One can find the best quality properties with high yields including apartments, villas, offices, shops, etc. Alongside, the thousands of property listings, Bayut also offers a property forum, real estate search trends, live market prices, nearby places & archives of buildings with over 15,000 images and floor-plans.
Founded in 2015 by Mohamed Samad, Matic offers the convenience of a clean home without the hassle. With their app or website one can seamlessly book a cleaning session, and they’ll pick it up from there. Matic is also the largest network of cleaning service companies and will match you with a highly trained cleaning professional straight with a click to your home in Dubai, Abu Dhabi, Riyadh or Doha.
Founded by Michael Lahyani and Renan Bourdeau PropertyFinder owns and operates real estate portals across Dubai. The website is available in both English and Arabic and provide visitors with search facilities covering residential and commercial properties. These are available for rent or for sale, real estate news, home advice, and buying and selling guides. They provide their users with the tools to help consumers find the properties that fit their needs. They also work with brokers for listing properties in one convenient site, and make it easier to see all of the information about those properties while browsing from its users’ desktop or on the move.
Founded by Christian Azar, Karim Helal and Vlad Romascanu in 2009, Protenders is a very quickly growing B2B platform for the construction industry. It enables developers, architects, engineers, contractors and suppliers across the globe to quickly increase their visibility, find new leads and streamline their tendering & bidding activities. It achieves that be delivering 3 powerful modules that work together, which are Rich Company Profiles (a.k.a The LinkedIn of Construction), Accurate Construction Intelligence (using crowd-sourced and protenders-researched data) and Secure eTendering (that enables developers to streamline their entire bidding process).
Founded in 2015 by Jomit Jose, Mozammil Khodabacchas and Mustapha Ramadan, the vision of Storate is to create a social ecommerce marketplace, where sellers and buyers are not locked inside. They can communicate and transact freely on or off the market. Here, the operator charges no margin, so sellers can provide their products and services at the lowest cost possible with benefits of excellent customer service.
Moving forward for Proptech in The UAE
The real estate sector of UAE has witnessed a remarkable growth of the past few years with a resilient market. With increased tourist / global interest as well as foreign investment, proptech in UAE is set to boom. In this ripe market, investment is lucrative to make use of the proptech opportunities here. As the government moves towards increased interest in technology and innovation, proptech in the UAE will become more appealing and innovative.