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Mena proptech: A balancing act between innovation and responsibility

This demand for innovation is aligned with government initiatives across the region

Published: Thu 10 Oct 2024, 6:00 AM

Updated: Sun 13 Oct 2024, 1:18 PM

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Fuelled by a burgeoning population, growing urbanization, and a tech-savvy generation, the real estate sector in the MENA region is undergoing a digital revolution.

This demand for innovation is aligned with government initiatives across the region, such as the UAE’s Smart City projects and Saudi Arabia’s Vision 2030, actively encouraging the adoption of PropTech solutions, an industry veteran said.

“The role of artificial intelligence in identifying investment opportunities and assessing risks is on the rise, but significant challenges persist due to the scarcity of comprehensive data in many MENA countries. Data availability issues extend to property supplies, sales transactions, future supply, urban planning, and residential occupancy. While Dubai is a leader in this area, even here, complete data integration remains elusive,” said Firas Al Msaddi, CEO of fäm Properties in Dubai.

Lessons can be learnt from the fate of US firms Zillow and Opendoor, which both suffered heavy losses by relying on AI for investment decisions with inadequate data. The priority must be to ensure robust data collection and integration to avoid misjudgements, and AI models should be flexible and adaptable to rapidly changing market conditions.

Without solid data, AI models may provide inaccurate predictions and insights, leading to poor decisions. Be cautious of AI being used primarily for lead generation without strong evidence, Msaddi warned. “Transparency is key to building trust with stakeholders. By using AI responsibly, the MENA PropTech sector can thrive. Already, on the operational side, AI has made significant strides in aiding administrative and management functions within companies,” he added.

From internal processes among employees and departments to external interactions with clients and third parties, AI is increasingly instrumental, he stressed. “The Internet of Things (IOT) is integrating seamlessly with real estate. AI-powered systems are now managing everything from lighting and temperature control to security and maintenance, creating intelligent and energy-efficient spaces,” Msaddi added.

While the adoption of these technologies is still in its early stages across the broader MENA region, the UAE and Saudi Arabia are leading the way in integrating IoT and AI solutions into their real estate and urban development projects, creating intelligent and energy-efficient spaces. The UAE has been at the forefront of adopting smart building technologies powered by IoT. According to forecasts, the smart home market in the Emirates is expected to show an annual growth rate (CAGR) of 10.49% over the next few years, reaching a projected market size of $113.8 million by 2028.

Firas Al Msaddi, CEO of fäm Properties

Firas Al Msaddi, CEO of fäm Properties

To achieve its Vision 2040 goal of becoming a leading smart city, Dubai is embracing cutting-edge technologies like AI, IoT, and blockchain, in the process transforming urban planning and reshaping the real estate sector.

The UAE’s PropTech boom is transforming property management. Digital platforms streamline tasks like tenant screening and maintenance, boosting efficiency and convenience for landlords and tenants.

Similarly, Saudi Arabia’s smart city vision is facilitating the integration of IoT into major real estate projects, with an emphasis on smart infrastructure, building connectivity, and resource management. The spectacular Neom mega project, seen as a global model for future cities, is creating a living environment where IoT is one of the key technologies.

At the heart of so much technological advancement, a skilled workforce is essential for real estate companies to implement and manage AI effectively, Msaddi noted. “Seasoned property advisors interpret data, troubleshoot issues, and drive successful AI adoption. This means that investing in training programmes is crucial to stay competitive. A skilled workforce empowers real estate companies to leverage AI’s potential and stay ahead in a changing landscape,” he said.

Governments have a key role to play in ensuring the responsible development and use of AI in PropTech. Clear regulations can provide guidance and set ethical standards for AI practices, safeguarding consumer interests and data privacy, Msaddi said.

To fully harness the potential of AI in PropTech, collaboration between industry players, government agencies, and academic institutions is crucial. “By promoting standardized data practices, knowledge sharing, and talent development, we can accelerate AI advancements in the MENA region. PropTech companies must prioritize ethical AI development, transparency, fairness, and user privacy. Strong cybersecurity measures are also essential to protect sensitive data and build trust,” Msaddi said.



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