Why Proptech is the key to future-proofing Dubai’s real estate market

Dubai’s real estate sector has long set a high global benchmark. The city has become synonymous with ambitious construction projects, from its sprawling luxury resorts to record-breaking skyscrapers. However, the picture of the industry today is remarkably different to what it was even a few years ago. While the pandemic and fast-changing dynamics of the hospitality industry have played an important role, one factor is propelling transformation at an unimaginable speed: Proptech.

Proptech, short for property technology, is a powerful force already upending traditional real estate models through advancements like AI, VR, IoT, blockchain, and automation. This isn’t unique to Dubai – it’s a familiar story across the globe. In 2024, the global Proptech market was valued at USD 36.55bn, but it is predicted to soar to USD 88.37bn by 2032, at a CAGR of 11.9%.

Dubai, however, does have an edge. The city has embraced Proptech faster than others, bolstered by progressive government support and high demands for SMART solutions in a promising market. This momentum is underpinned by initiatives like the Dubai Real Estate Sector Strategy 2033 and Dubai Digital Strategy, as well as collaborative government and private sector initiatives like the Dubai Land Department’s Proptech Accelerator program and high-profile events like Future Proptech Summit 2025.

With the real estate industry currently facing challenges ranging from a fast-expanding expatriate population to climate change, could Proptech be the solution? Let’s look at how Proptech can solve some of the most pressing challenges the real estate sector faces today and why now is the time for investors and Proptech companies to make their move.

SMART buildings and responding to sustainability

Sustainability is not a new conundrum, but it has become more urgent in recent years, particularly as Dubai’s 2040 Urban Master Plan aims to create a more sustainable, resilient, and people-centric city while strengthening its position as a global hub for business and innovation. The plan envisions that 60% of Dubai’s area will be nature reserves and natural areas, with a strong emphasis on green infrastructure, public transport, and energy-efficient buildings. In this context, Proptech could play a pivotal role in driving smarter energy use, enabling data-driven infrastructure planning, and supporting real estate solutions that align with environmental goals.

The Internet of Things (IoT) enables developers to integrate smart building technologies that reduce energy consumption, optimise water and enhance overall sustainability. For example, Smart Climate Control can automatically adjust lighting and temperature based on occupancy and weather conditions to make significant energy savings. Smart sensors can monitor air quality, temperature and humidity to improve indoor conditions.

The UAE government recognises Proptech’s role in creating a more digitally connected and sustainable urban environment, too. This provides the perfect platform for Proptech companies to develop and implement innovative solutions in energy management and smart buildings.

For investors, these developments in IoT make Dubai an attractive market for sustainable tech-driven properties. As the population increasingly demands tech-enabled living spaces, properties that have integrated smart tech reportedly have a 15-20% higher market value than traditional properties, offering lucrative opportunities in this space.

Enhancing accessibility with efficient VR and Digital Twins

Virtual reality and digital twin technology (virtual replicas of physical assets) enable the real estate industry to respond to specific challenges more efficiently and cost-effectively.

The real estate market in Dubai has always been popular with international buyers, but historically, the process has been lengthy and tricky to navigate. But with the latest advancements in VR, international buyers can explore existing and off-plan properties in detail, without the need for in-person meetings. According to PwC, 43% of international investors now rely on virtual tours and digital twins over physician tours.

In addition to making the real estate sector more accessible, it eliminates the cost and resources demanded by international technologies. Based on current uptake, the UAE government predicts a 25% annual growth in VR viewings throughout 2025.

This technology makes real estate more appealing to local buyers, too. VR no longer involves an off-ratio, grainy whistle-stop tour of a property. The latest innovations simulate what living in them actually feels like during different seasons, with different furniture arrangements, and more. Some technology even allows buyers to enjoy an ‘x-ray vision’ of buildings to see specifics of plumbing and electrics.

Beyond selling, digital twin technology is proving vital in property maintenance. Instead of sending out a technician to review a faulty sensor, facility managers can use these digital twins to identify and fix issues by reviewing data, sensors and history of specific cases off-site, saving time, money and wasted resources.

Boosting transparency and accessibility with blockchain

Across the globe, the real estate industry has had an image issue around money laundering, price inflation and corruption. Blockchain eliminates these doubts by reducing paperwork, eliminating intermediaries and enabling smart contracts (self-executing agreements with terms written into code that automatically trigger actions when conditions are met). As well as minimising human error and reducing transactions from weeks to minutes, it enhances security and makes the process less susceptible to fraud. This tamper-proof, trustworthy and transparent system only makes the real estate market in the UAE more appealing, particularly in comparison to other cities that have not embraced Proptech.

Blockchain also has the potential to make the real estate market more accessible and therefore even larger. Historically, in Dubai, high-end property shares were only available to the highest bidder. Now, through tokenisation, properties can easily be divided into digital shares. For instance, when the Palm Jumeirah villa ‘Frond N7’ was tokenised in November 2024, its AED 75 million value split into 100,000 digital tokens, allowing investors to purchase fractions for as little as AED 750.

With the UAE’s Blockchain Strategy aiming to make Dubai the first city fully powered by blockchain, now is the perfect time for investors to seize opportunities in this rapidly evolving market.

AI and real-time updates for cost reduction and operational efficiency

AI is also democratising the property market by matching buyers and sellers, powering digital platforms for renting and buying and making it easier for clients to make decisions quickly and effectively.

AI-powered valuation models are just one excellent example of this. They can assess property values in real time by analysing market trends, demand, and historical data, helping investors make informed decisions faster. Companies like YallaValue, a Dubai-based Proptech company, offer instant and automated property valuations with unbiased reports, reviewed by certified professionals, offering reliable valuations without signups, sales calls or misleading valuations.

Chatbots and virtual assistants can handle enquiries, rental applications, and property searches autonomously, reducing the need for human intervention. Predictive maintenance tools forecast building maintenance needs, reducing operational costs and improving efficiency.

Real-time data analytics in Proptech has proven to be highly effective. For instance, Emirates Property Research’s 2024 market analysis revealed that early adopters of comprehensive management platforms saw tenant retention rates 32% higher than the market average. This shift is a game-changer, particularly in a competitive market like Dubai, where acquiring new tenants is five times more expensive than retaining existing ones.

The future is tech

The UAE, one of the fastest-growing real estate markets globally, is experiencing rising demand driven by increasing tourism and a large expat population. The pressure is on to respond. While transitioning from legacy systems takes time and money, those who fail to fully embrace Proptech risk falling behind in a fast-changing global market.

With the growing demand for more efficient, automated, and accessible property management systems, the opportunity for investment in Proptech has never been clearer. The UAE now boasts 55% of all Proptech companies in the MENA region, underlining its leadership in this field. As the UAE continues to solidify its position as a hub for innovation, the real estate sector must evolve to stay competitive, making this an exciting and crucial time to invest in the future of property technology.