Imagine if the next James Bond 007 or Star Trek movie showcases the advancement of technology in real estate! It is not about high-performance luxury cars or the next space craft we are talking about here. It is an integrated system of listing, marketing, researching, short listing, buying, registering and conducting post purchase activities with landlords, real estate agents and the land departments of the city. From builders to investors, the stakeholders of property market have been dealing with real estate in the virtual world for nearly two decades. The impact of this will be so significant in this century that properties will bought by tiny denominations of currency over an indefinite period of time rather than a chunky sum paid off in years, fixed by the mortgage.
Let us explore the latest developments in PropTech that will change the way we look at real estate. Then, we will understand its impact on exponentially growing markets such as Dubai which has made great inroads into construction industry. We will break technological advancements into four important aspects of the market: Market Analysis, Ease of doing business, Security and Payment.
1. Market Analysis: This is the basic requirement for any investor. Today, there are a gazillion websites in the areas of financial investment and real estate that will provide insights into any local market, starting from maps, neighborhood information and property types. You can then deep-dive into builder’s reputation, area guidance value, rental yields and more. There are specific sites that monitor monthly sale price and rentals by area as well. However, cutting through clutter is the key here. This is all possible through Big Data and Geolocation technology which will change how buyers make decisions by aligning their preferences with listed offers.
Latest real estate portals such as MyVilla.com specifically deal with independent properties in Dubai that helps you narrow down your choices to your city and type of property you want to deal with. You can subscribe to alerts that will notify you when your choice is available.
2. Ease of doing business: Many countries are striving to be ranked high on the world’s ease of doing business index. There are various areas where government intervention is required to complete certain transactions. Water, electricity, building permits, business licenses and property transactions are few of the basic areas that consume significant time of individuals. In countries ranked lower on this index, doing business is a cumbersome, manual, time consuming and frustrating process. In countries where ranking is higher, this is reverse. With man-machine combination, advanced technologies and increased service per percentage of population, doing business in these countries is hassle-free.
Dubai Land Department (DLD) is launching a new service called REST (Real Estate Self Transaction) that will enable investors from any part of the world to buy or sell properties easily online. And in real estate portals, technology such as virtual reality allows potential home buyers to see a house, even thousands of miles away or one which is yet to be constructed, without their needing to leave their current residence. Such visualization can be powered through Drone technology which allows 360 degree capture of a property. Augmented reality applications allow agents to more closely describe the different areas of a home to a viewing prospect.
3. Security: The Internet of things (IoT) has changed the way security works now. With home security enabled through sensors, blue tooth, internet, smart phones and a whole gamut of technology, residential buildings are now considered far safer, traceable for criminal activities. Surveillance through CCTV cameras, remote monitoring and fast alerting law authorities have all made buying properties in community a safer bet. Gated community villas and townhouses provide a superior living experience by having best of both worlds – independent living and community living. Since the units are all on separate plots one gets the feeling of having the place to themselves but common areas such as lawn, pool, gym, courts and party halls will take away the hassle of maintaining them on an individual level.
Dubai is increasingly seeing a trend where families prefer to live in such communities where they feel secure, happy and safeguarded from outside elements. Technology, to maintain such a feeling, comes at a higher cost which becomes manageable when everyone shares it through their maintenance cost.
4. Payment: As finance markets evolve and becoming more diverse, alternative sources of finance become increasingly available. The latest addition to this list is blockchain and cryptocurrency. Cryptocurrencies are digital currencies encrypted and secured using advanced software that verifies and tracks ownership and transfers. Bitcoin is the technology behind cryptocurrency that gained a substantial market foothold and remains the most prominent cryptocurrency today.
At a consumer level, rent to own type of schemes or phased payment terms in the residential market mean that developers will be taking on more finance risk. With increase in inventory and slow sales it becomes imperative for real estate honchos to look at alternative financing as the real option to offload their units at a healthy pace.
The Dubai Land Department, in cooperation with Smart Dubai, is looking at how to adopt Blockchain technology within its electronic real estate platform.Although this initiative is still in its early stages, it has the potential for multiple applications that include property purchases, property mortgages, utilities payments and property and facilities management.
When these significant changes go mainstream in real estate technology or PropTech, the star producers and scriptwriters of the movie industry will bank on the latest spy thrillers that will talk the language of Cryptocurrency. Perhaps it won’t be that cryptic after all.