Driven by rapid population growth, increasing urbanization, and a tech-savvy demographic, the real estate sector in the MENA region is undergoing a transformative digital shift. This demand for innovation aligns with regional government initiatives, such as the UAE's Smart City projects and Saudi Arabia’s Vision 2030, which actively promote the adoption of PropTech solutions, according to industry experts.

“The use of artificial intelligence in identifying investment opportunities and assessing risks is growing. However, significant challenges persist due to limited access to comprehensive data across many MENA countries,” noted Firas Al Msaddi, CEO of fäm Properties in Dubai. “Data shortages affect property supply, sales transactions, future projections, urban planning, and occupancy rates. While Dubai leads in data integration, even here, complete data alignment remains a challenge.”

Learning from the experiences of U.S.-based firms Zillow and Opendoor, which faced substantial losses due to reliance on AI without sufficient data, the focus in MENA must be on strengthening data collection and integration. AI models also need flexibility to adapt to rapidly evolving market conditions to avoid similar pitfalls.

While technology adoption is still in its early stages across much of the MENA region, the UAE and Saudi Arabia are at the forefront, integrating IoT and AI solutions into real estate and urban projects to create intelligent and energy-efficient environments. The UAE is leading with smart building technologies powered by IoT, and the smart home market in the Emirates is projected to grow at a CAGR of 10.49%, reaching $113.8 million by 2028.

To reach its Vision 2040 objective of becoming a global smart city, Dubai is deploying cutting-edge technologies like AI, IoT, and blockchain, revolutionizing urban planning and reshaping the real estate landscape. This surge in PropTech is streamlining property management in the UAE, where digital platforms facilitate tenant screening, maintenance, and enhance overall efficiency for landlords and tenants alike.

Similarly, Saudi Arabia's smart city initiatives are integrating IoT into large-scale real estate projects, focusing on smart infrastructure, connectivity, and resource management. The iconic Neom mega-project exemplifies the region’s ambition, offering a model of future living where IoT plays a pivotal role.

To unlock AI's full potential in PropTech, collaboration among industry stakeholders, government bodies, and academic institutions will be essential.