Regulation the main barrier to implementing innovative tech in real estate, says survey
Legal and regulatory concerns around implementing new technology are holding back real estate businesses from driving innovation in the sector, according to a new report by global legal business, DWF.
Almost half (45%) of the 375 senior decision makers from global real estate businesses surveyed said that they were unclear or worried about the legal/regulatory implications of new technology, admitting that this was their biggest obstacle to implementing new tech within their business.
Cyber security fears (43%) and a lack of available data (42%) also featured prominently as barriers to technology implementation. 62% of larger businesses, those with revenue of £1bn or more, cite lack of data as an obstacle.
But despite the concerns, the report, Techtonic Shift in Real Estate, also found that financial investment into innovative technology is set to grow substantially in the next 12 months, with 35% of companies intending to spend more than a quarter of their IT budget on new technology innovations in 2020, up from just 12% in 2019.
Over half of respondents to the survey (55%) – which included general counsels, heads of legal/IT, C-suite executives and other senior roles – said that implementing new technology within their business is a key enabler for growth that will lead to better decision making, with 45% highlighting artificial intelligence (AI) and machine learning (ML) as their greatest enabler to growth.
Commenting on the findings, Shiraz Sethi, Middle East Managing Partner and Co-Head of Employment at DWF, said: “As evidenced in our research, it is clear that the real estate sector is on the cusp of change, with a host of new technologies poised to transform the sector. Whilst this brings an array of new opportunities and challenges, this can be managed with a thorough approach to risk mitigation.”
Shiraz further commented that “Although often perceived as behind the curve, our global survey suggests the real estate sector is on the verge of change propelled by technology that has the potential to transform businesses – whether it is through the use of blockchain to provide increased liquidity and transparency on transactions, or the use of artificial intelligence to allow ever more accurate investment decisions to be made. The UAE has taken a lead in that respect with initiatives ranging from the Dubai Land Department’s Smart Investment Map and Blockchain Project whilst a significant portion of the UAE’s tech savvy population already uses technology to guide their real estate research with 72% of prospective property buyers using online portals to search for properties.”
“With Technology transforming all aspects of industry, the real estate sector is not immune.” Said Shiraz “Businesses that embrace change and invest in new innovation will ensure they lead the charge towards a more digital future.”