Digital solutions for the buying and selling of property have lagged behind advances in other sectors, such as finance where technologies like blockchain have been making huge strides in recent years. This has primarily been due to the fact that there has historically been very little integration among various players involved in the property supply chain.
However, the UAE’s recent announcement of the Real Estate Self Transaction (Rest) platform has certainly caused a stir within the property sector and is poised to potentially have a far-reaching impact across the industry. This platform is a testament to the Dubai government’s commitment to driving the digital economy and helping to pioneer the digital transaction in what can be a very administration-intensive sector.
We are in an interesting period for the real estate market in the UAE. As previously written, now is a good time to buy as an expat, given the softening of prices and increasing number of opportunities, both with off-plan units and the secondary market. However, with stock levels increasing, there is still a keen eye focused on international investors.
It is likely that the introduction of Rest will play a big part in helping to make these transactions quick and easy, especially for overseas buyers, while also providing a boost in foreign direct investment. Together with the government’s plans to grant visas of up to 10 years to certain expats, the introduction of a digital transaction portal is expected to give greater certainty to investors.
This sentiment is echoed by the majority of property agencies in the UAE. As Paul Kelly, operations director at real estate broker Allsopp & Allsopp, has told me, he is keen to see some transparency in the market and believes that Rest could help here. From his perspective, the platform could provide greater confidence and security in the market, as well as drive greater efficiency and improved customer service.
The advent of digital transactions also provides an opportunity for agents to become an even more integral part of the transaction. As Paul commented: “While some of our core services will move online, our systems cannot show a prospective tenant the area or help with buyer queries, and we believe this shift towards providing a more personalised service will drive professionalism, and that professionalism will drive the market.”
What will further spur the market and drive significant growth is a reduction in the down payment that is currently 25 per cent of the total property value. It may be premature in saying this, but the move towards lower down payments, coupled with an easier transaction module, should give the sector a well overdue boost. Particularly for first-time buyers in the UAE, this would enable them to invest and shore up the market. After all, it is the base level that will shore up the market, drive liquidity in the sector and push the investors to the well-supplied off-plan developments.
With Expo 2020 around the corner in Dubai, we all want to ensure this is retained and channelled in the right way and Rest should help us achieve this, along with other key initiatives to digitise the UAE’s property sector. The Dubai Land Department’s plans to optimise end-to-end real-estate business processes using blockchain technology as well as new legislation that will allow people to purchase property using cryptocurrencies are just two examples of other government initiatives that will drive up the market.
Overall, Dubai is making significant leaps towards the digitisation of the property industry and is fast becoming a world leader in the digital economy space.