Virtual reality – creating new standards in real estate
A new wave of digital-led innovations is disrupting the way real estate business is conducted
The real estate sector has been a late bloomer relatively speaking, but proptech is now a gradually growing space and can have a huge impact on the way real estate transactions will be conducted in the future.
Some technological advances are general in scope, in that at a high level they cut across several sectors, and are familiar to consumers globally. These include mortgage comparison sites, marketing platforms with links to online brokers and agents, and online real estate data analytics. All of these platforms and data help consumers decide if they wish to develop, buy, sell or let their properties.
Imagine, however, a future where it is normal not to physically view the property but to still put down an offer to buy. A report conducted by Redfin, a US estate agency, reported that one in five had submitted an offer to purchase a property in the US without first viewing it. Admittedly, one can argue that this is how off-plan purchasing works, but the Redfin report was conducted on built properties. The survey was taken from a sample of 2,000 people, although the survey also found that in many cases the buyers knew the sellers.
In the UAE, many developers offer a gallery of computerised photos of the final built product of an off-plan project. Instead, allowing a buyer to have that immersive VR experience to purchase a property is more exciting. Google’s street view certainly helps. At the time of writing, a Chinese company is offering online-to-offline property services to foreign investors to purchase property in China using virtual reality. It remains to be seen how successful this will become, but the encouraging point is the Chinese authorities are allowing the concept to be tested.
Properties will be manufactured rather than built, which is already happening in places like China. 3D-printed buildings can offer consumers greater customisation and room for creativity. The negative impact could be the redeployment of the construction labour workforce. Perhaps such a redeployment will bring better education opportunities for the workforce, we hope. To what extent a 3D-printed building will become popular will depend on the consumer’s acceptance and experience, the quality of the finished product and the price. The technology also allows 3D-printed buildings, and even assembling flatpack buildings, Ikea style.
These are just some of the examples that proptech can bring. If all of this can be done with ease and comfort from your own living room, then we may finally be able to say goodbye to the traditional real estate model of meeting in person to conduct long drawn out deals.
It seems like everyone has now heard of blockchain and how it will bring immediacy to the real estate market. Gone will be the days when a party spends countless weeks or months undertaking due diligence on a property. With the move away from paper title deeds, paper licences, paper everything — there will be no need to meet in person or to safeguard precious documents. The introduction of blockchain to the real estate market will potentially allow a buyer, say from the UK, to review the complete pack of documents on a property’s ledger in one go, saving weeks and months. A lender, could be from the US and the property in question could be in the UAE. By the time the seller from the UAE wakes up in the morning, the property may have been transferred to the new buyer in the UK with an approved mortgage from the US.
In September, the Ukrainian government sold seized property at an auction using blockchain. The Dubai Blockchain Strategy is in full swing itself. Only recently, the Dubai Land Department spoke excitedly about blockchain at Cityscape Global in Dubai. Let’s watch this space.
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