Real estate has emerged as the fastest-growing sector in technology adoption. It has moved from being a laggard a decade ago to a frontrunner today. The use of technology in real estate starts at a very early stage when buyers conduct online searches to find out if the property matches their requirements. The use of Artificial Intelligence and Cloud has made the home buying process more simple, personalized, and hassle-free for real estate buyers. Virtual tours, virtual inspections, drone photography, and geolocation tagging, are some of the most prevalent technologies which are assisting buyers in their search for their dream home. Technology is also empowering real estate investors in finding out the soil condition, air quality, and water table of the area where the property is located. The introduction of property listing platforms has made it much easier for property buyers to search for local brokers beyond their geographical reach.
Real estate 2.0 revolution has positively impacted every stakeholder. The adoption of Big Data and Artificial Intelligence (AI) has empowered real estate developers and property management (PM) firms in meeting the expectations of the buyers while maintaining the regulations set by the Dubai land department (DLD) or the Real estate Regulatory Authority (RERA). Real estate 2.0 has been instrumental in enabling developers & PM firms in meeting the two most requirements of every property buyer or resident – Security and Easy access. The usage of Internet of Things (IoT) sensors in residential communities has played a key role in ensuring the utmost safety of the residents and making the community more appealing to the buyers.
Here are the Top 6 ways Real estate 2.0 has simplified the home buying process –
1. Deploying Virtual Assistants to Provide Faster Information to the Investors
Virtual assistants are assisting the potential buyers in finding out the information related to the proximity of the property from major areas like downtown, Business bay, Dubai Canal, and other prominent places of Dubai. It is also assisting buyers in getting faster information about the distance of the property from schools, offices, hospitals, mosques, etc. which required physical visits earlier. Property management firms are deploying AI-powered chatbots to answer all relevant queries of the buyers and simplify their property buying process.
Deployment of virtual assistants has become more common since the beginning of Covid-19 to maintain social distancing. Virtual assistants helped the buyers in getting faster responses to all their queries. They have also enabled real estate developers in minimizing the requirement of hiring Sales agents to handle these queries which has reflected positively on their net revenues & sales.
2. iBuying – Estimating Right Home Value & Eliminating Intermediaries
IBuying or Instant Buying is a term used for the companies which use algorithms to estimate a home’s value and then buy it directly from the owner for cash. This method is becoming more prevalent as it assists brokers in easily setting up the process using powerful algorithms and providing instant offers to the seller.
IBuying is playing a key role in eliminating the brokers as well as the banks from the home buying process by generating an automated valuation using mathematical algorithms and providing a seller with a more streamlined way to sell the house. This is leading to the faster sale of the property. IBuying continuously updates new inventory added to the market and provides more desirable options to the buyers which most closely match their requirements. With the help of IBuying, it is become very simple to schedule the property viewings and keep an eye on the condition of the property before the final possession.
3. Blockchain-powered Applications to Boost Security & Transparency
Blockchain-powered applications have played a critical role in streamlining the complex processes for real estate investors by making them digital. This is one of the reasons that there has been a substantial push from the Dubai land department (DLD) on implementing blockchain-powered applications to provide faster information to the investors at a click of a button. Blockchain technology makes real estate transactions more secure and reliable and simplifies the process of land registrations by creating a database which cannot be tampered with and is easily accessible. This minimizes the risks involved in the investment for real estate investors and encourages them to pump more money into the property and reap a high rate of returns.
Initiatives launched by DLD to Implement Blockchain-powered Applications
Some of the initiatives launched by the Dubai Land Department to implement blockchain-powered applications to streamline the real estate investment process are as follows –
- In 2022, Dubai Land Department launched ‘DXBinteract.com’ – a blockchain-powered tool to protect the tenants from paying higher rents pitched by the brokers or landlords. The platform provides real-time information to the tenants on the rental history of a property and assists real estate investors with a listing of past values to ensure they don’t end up paying a higher amount for the property and can make wise investment decisions.
- In 2020, Dubai Land Department joined hands with Smart Dubai Government Establishment (SDGE), Al Wasl Group, and Emirates NBD to launch of a paperless property rental platform to automate business processes between four connected UAE entities. The primary objective behind the launch of the platform is to integrate all four entities. du and SDGE have built a multi-purpose Dubai Pulse, to offer secure analytic, big data, and compute and storage services for the use of various government entities. It is available through du Blockchain Edge and Dubai Pulse links all the services to a digital tenancy contract through the solution, which is received within a few minutes following completion of the digital application.
- du Blockchain Edge offers seamless digital experiences and solutions and ensures scalability and strengthens individuals, enterprises, and government entities to contribute to support the Emirates Blockchain Strategy 2021 and the Dubai Paperless Strategy.
- In 2019, The Dubai Land Department (DLD) partnered with Emirati lender Mashreq Bank to launch a new blockchain-based mortgage platform – ‘e-mortgage system’ to streamline land registries and act as a repository for the mortgage records of Mashreq’s clients and in future others.
- In 2017, Dubai Land Department became the first government entity in the world to implement all transactions on a blockchain platform.
- DLD also created the Blockchain system using a smart and secure database that records all real estate contracts, including lease registrations and links them with the Dubai Electricity & Water Authority (DEWA), the telecommunications system, and various property-related bills.
4. Fractional Investing – Minimizing Risk & Cost of Acquisition
Real estate 2.0 has made it possible to address the challenge of the rising cost of the property. The concept has discovered alternative solutions for the investors to own a fraction of the property rather than buying it as a whole to gain the advantage of the high return on investment (ROI) offered by Dubai’s real estate market. ‘Fractional Investing’ has empowered multiple investors to invest in a property together to minimize the investment risk as well as the cost of the acquisition. This trend is widely popular among millennials who want to invest in high-end commercial properties but have limited funds. They can now buy a fraction of premium property and fetch a high rate of return.
5. Using Advanced Analytics to Create more Personalised Experiences
Advanced analytics softwares is empowering real estate developers to bring personalization to the property purchase process. The article titled – ‘The Value of getting Personalization right—or wrong—is multiplying’ by consulting giant, McKinsey & Company states that ‘personalization most often drives 10 to 15% revenue lift (with company-specific lift spanning 5 to 25%, driven by sector and ability to execute). The more skillful a company becomes in applying data to grow customer knowledge and intimacy, the greater the returns.’ Advanced Analytics is playing a crucial role in attracting millennial buyers in buying a property. Using advanced analytics tools & applications, developers are making their conversations more personalized and appealing for the millennials.
6. Bringing Sustainability to the Real estate Sector
Millennials are now prioritizing the sustainability and green features of the building while buying or renting a property over price, rents, or service charges. To meet the demand of the millennials, developers are implementing Real estate 2.0 practices like – Net Zero Concepts to build more sustainable and environment-friendly buildings. Developers are installing green insulation, cool roofs, low-emitting materials, and Heating, Ventilation, and Air Conditioning (HVAC) to minimize the energy consumption of the building and reduce its carbon emissions to become a preferred choice of the millennials.
Leveraging Real estate 2.0 sustainable practices, Dubai has become the third city in the world with the highest number of green-certified buildings in the ‘Sustainability and Wellness in Dubai’. The report by Core Savills reveals that there are over 550 projects under LEED certification. U.S. Green Building Council (USGBC) has ranked the UAE in 6th spot in the World in 2021 with 73 LEED-certified projects occupying over 13.7 million square ft. of area.