Evolving from a desert to a global investment centre in just a matter of decades, the United Arab Emirates (UAE) and in particular, Dubai, has had an accelerated development path, unique to that affecting any other market in the world. With residential and commercial real estate in Dubai proving popular to both international investors and those wishing to live the Dubai dream, the property market in the emirates has undergone rapid growth, unregulated until 2007 when the RERA (Real Estate Regulatory Authority) was established and global standards for estate agencies were implemented.
Dubai’s ‘REST’ platform will enable digitalisation of all its real estate transactions by 2020.
With real estate transactions focused almost entirely on new developments, both off-plan and re-sales, agents are constantly competing for the favour of the developers. In this highly competitive and relatively young market, estate agency companies cannot fall back on having a well-established heritage brand, instead, they must concentrate on constantly improving their offering and reiterating the value of the services that they can offer to clients.
As agents continually seek to raise their service levels above and beyond that of their competitors, proptech has flourished. Virtual tours and augmented reality are increasingly incorporated to agency websites, with bespoke apps to better showcase developments to overseas investors. Many agencies are also using Artificial Intelligence and chatbots to better ‘converse’ with the mass of international visitors to their websites and social media pages. This is integral for a global market, where the client base never sleeps.
They are also incorporating smarter search algorithms to ensure that their visitors can easily find exactly what they are looking for in their first website visit, to prevent them from turning instead to one of the many competitors.
Another new feature is Cryptocurrency, used as a real estate payment method, which is establishing roots in Dubai, rendered increasingly popular by being hedged against negative factors such as inflation, political instability and currency depreciation.
Perhaps most significantly in terms of proptech, The Dubai Land Department – the emirate’s property legislator – has recently unveiled radical plans for REST, or Real Estate Self Transaction, which is a digitalised platform based on Blockchain ledger technology.
The system will, amazingly, enable a complete digitalisation of real estate transactions by 2020, eliminating paper documents and reducing brokerage procedures. This falls within the government’s Dubai 10X plans, which aim to place Dubai ten years ahead of the rest of the world in all sectors, including real estate.
Whilst Blockchain technology is not unique to Dubai, the promotion of a Blockchain initiative by a governmental organisation rather than a business within the private sector is an innovative step.
ADAPT AND ADOPT
The methods that are now being employed by Dubai agents are, of course, tailored to the unique and highly specialised nature of the real estate market there. I am not suggesting that a broad-brush approach should be employed, in which tools such as advanced augmented reality are taken up by all agents, regardless of their market.
The most fundamental lesson to be learnt from Dubai is the agents’ willingness to adopt new trends and technology at an early stage, to ensure they continually stay ahead of their competitors.
With the REST initiative now being rolled out, agents in Dubai will be under more pressure than ever to prove their value to ensure what they offer does not become obsolete. The better agents, who can adjust to the new market conditions and offer clients intelligent and well-informed advice, will survive. Those who fail to do so may not.
Although this specific initiative is unique to Dubai, the digitalisation of real estate transactions and resulting reduction in demand for ‘pure agency services’ will trickle down to other global markets. Agents must keep a close eye on how Dubai businesses are adapting their services and take note, making plans to evolve their business model with changing market conditions, rather than burying their head in the sand.
Chris Dietz is the Executive Vice President of Global Operations for Leading Real Estate Companies of The World – LeadingRE – which is a selective global community of the highest quality independent real estate companies, with over 565 companies, including 200 with a dedicated commercial arm, and 130,000 sales associates in over 70 countries.
The company is represented throughout 20 European countries, with over 55 member companies – including the UK agent Strutt & Parker.