The Dubai Land Department's announcement that it will take all transactions online will make processes more efficient, but the human element will still be needed
In its latest bid for improved efficiency, Dubai’s government last week announced plans for the Real Estate Self Transaction (REST), an online platform that will allow real estate trading transactions to be conducted anywhere and anytime with multiple parties.
According to experts, the move will dramatically improve the speed of real estate transactions and generally streamline the process.
What is the initiative?
The plans, which were unveiled by the Dubai Land Department (DLD), are part of the government entity’s contribution to the Dubai 10X initiative and will enable real estate transactions to be conducted – from start to finish – online, thereby eliminating paper documents and cutting down on brokerage procedures. According to a DLD statement, the project will be fully developed and available for use by the first quarter of 2020.
“By removing many traditional limitations in the real estate transaction process, the smart real estate system allows landlords to trade and sell their properties anytime and from anywhere in the world,” says Sultan Butti bin Mejren, director-general of the DLD. “We have deployed advanced technologies and real estate systems based on a deep understanding of the needs of property owners. By enabling customers to directly manage all elements of the real estate transaction process online, the platform helps them save considerable time and effort.”
The initiative, according to bin Mejren, will cover all real estate transactions such as buying and selling, as well as common market services such as mortgages. By linking the owner directly to the bank through the REST application, the bank will be able to offer direct mortgages, deposit the mortgage amount and decommission the mortgage directly in case of sale and purchase.
Additionally, the platform also enables landlords based both in the emirate and abroad to rent their properties and pay bills remotely, as well as help owners provide online floor plans to furnishing and decoration companies.
Too soon to tell the impact
While the move has been welcomed by real estate professionals across the sector, many say it is far too early to tell the long-term impact the platform will have on the industry.
“The impact of any new technology-driven initiative depends on market adoption. Whenever a new disruption enters the market, it poses an opportunity to transform legacy systems and for adapters to excel,” says Niall McLoughlin, senior vice president of marketing and corporate communications at Damac Properties. “By enabling people to manage all elements of real estate transactions online, the platform will save time and effort. Yet, the long-term effects of the platform will only begin to surface once the platform is up and running.”
Agents here to stay… for now
Despite the fact that the system will take the real estate transaction and management process completely online, experts are quick to note that agents will still be sought after.
“Consumers want information at their fingertips, but when making the single largest purchase of their lives, most will want a professional on their side throughout the process,” notes Lukman Hajje, chief commercial officer of Propertyfinder Group. “The real estate agent’s role as gatekeeper of information has been disrupted as more information moves online. But online platforms cannot conduct inspections, negotiate price and terms, qualify buyers and haggle with landlords and sellers.”
The human element will evolve with technology but won’t be rendered obsolete any time soon”
Hajje goes on to say that: “This expertise and the human element will evolve with technology but won’t be rendered obsolete any time soon, and certainly not before Q1 2020.”
Simon Townsend, CBRE’s Middle East senior director for strategic advisory, says that while REST will deliver efficiencies in time, process and cost, prudent investors will still recognise the “importance of industry professionals to understand both the transaction parameters and market risks.”
“While the process may become more efficient, there is no substitute when undertaking due-diligence than engaging with a market or industry professional,” he says.
In the longer-term, however, technology such as REST may well cause much more significant disruptions to the real estate business.
“Technological enhancements are taking the property world by storm and while the talk of AI and the mechanisation of the global workforce has already begun, there are some roles that are unlikely to come under immediate threat,” says Faisal Durrani, partner and head of research for MENA at Cluttons.
“Taking people and personalities out of the equation will make the world of property investment and management far more impersonal. That may be what the future holds in store, but it’s not yet a case of people versus machines, though we’re certainly on that path.”
Speaking as a millennial and someone that has been taken advantage of by an "industry professional," I honestly cannot wait until this initiative is in full effect. I would much rather take my chances directly with the landlord/seller, the DLD, the bank and do all the running around myself, than trust an agent. Because of market saturation, most of them know as little as I do and constantly have to "speak to the owner" during negotiations. Why wouldn't I want to have the owner at my finger tips and engage him directly, I am convinced I'll get a much better deal. Good on the DLD for moving with the times, by the time Generation Z become home owners I am sure only developers will be left standing.
Pros and Cons I guess. Since when has an online only service been reliable, safe and secure. I would still want a skilled professional's advice on such transactions.