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The unfolding story of Proptech in Dubai

Dive into the evolution of Proptech in Dubai and discover how advanced technologies like AI and big data are reshaping the real estate landscape for Millennials and GenZ

The unfolding story of Proptech in Dubai

The journey of Proptech began with a simple yet revolutionary idea: moving real estate listings from the physical pages of newspapers to the digital realm of the internet. This was a major first step in the evolution of property technology. Then by 2008, the sector evolved further, making it easier to share and find spaces, reminiscent of Airbnb’s impact on short-term rentals.

Today, we’re witnessing a new era in Proptech, where advanced technologies like AI and big data are being harnessed to redefine the real estate landscape. This transformation isn’t just an incremental change; it’s a fundamental shift, influenced by global trends including the rise of remote work and the demand for more flexible living solutions.

Dubai, for example, is one of the hottest real estate markets in the world and you can count on one hand the number of significant Proptech players. There are a few listing platforms, a few other Proptech that are trying to digitalise the home buying experience, and one or two real estate crowdfunding platforms.

This is particularly evident in the rental sector. A substantial portion of the population, especially young adults, allocate a significant part of their income to housing, with some spending over 30% of their earnings on rent. Yet, this considerable financial commitment does not translate into a satisfactory living experience. There’s a distinct absence of a strong brand or an elevated living experience in renting, even though 66% of young adults in the city are renters. This gap in the market represents a substantial opportunity for Proptech companies to innovate and redefine the rental experience.

The Dubai Urban Plan 2040 anticipates significant growth, with the city’s population expected to surge from 3.6 million to 7.8 million. Alongside this growth, rental prices have reached a five-year peak, and the number of rental agreements has risen by nearly 50% compared to 2019. These figures underscore a shift in the way people live and work, highlighting an evolving need for new living and working solutions.

Consumer experience will drive the next Proptech evolution in Dubai. The innovation has to start with completely reimagining the entire customer experience whether in buying or renting, especially with Millennials and GenZ consumers who are becoming the majority of the buyers and tenants. Only with a deep understanding of next-gen consumer’s needs can new technology be built to integrate their experience horizontally. For example, people will no longer wish to sign year-long tenancy contracts, will want to pay monthly, and will be able to personalise services, co-work, and network, and have the flexibility to move whenever they want.

The next generation has new needs and behaviours which are fundamentally changing the way people consume, live, and work. Millennials (born between 1980-1994) and Generation Z (born between 1995-2009) accounted for 46% of the global population as of 2021, making them the most important consumer segment of the present and future.

Empowered by technology, younger consumers have been increasingly used to the convenience, value and integrated experience of companies such as Apple, Uber, Airbnb, and Amazon. The next-gen prefers instant access over ownership as seen with user trends on Netflix and Spotify. The tech-savvy consumers value modern amenities, worldly opportunities, connection, and entertainment. However, their biggest spending, housing, is a painful, inflexible, limiting, and inconsistent experience. 

The Proptech landscape in the Middle East, particularly Dubai, is at a crucial juncture. The current trends indicate a pressing need for innovation that goes beyond digitising existing processes. The untapped potential in the rental sector, coupled with the impending population boom, offers a ripe opportunity for Proptech pioneers to redefine the real estate experience.

By aligning with the evolving needs of millennials and Generation Z, Proptech in Dubai can not only meet market demands but also set the stage for a paradigm shift in the industry’s trajectory.