The real estate sector in the MENA region has undergone significant transformation in recent years, spurred by the widespread integration of technology across various sectors. PropTech, the term for technology-driven solutions in real estate, has reshaped how people buy, sell, rent, and manage properties in this region.

According to a report by MAGNiTT, $128 million in funding was directed to MENA’s PropTech sector in 2021. This growth can be attributed to a few key factors. First, the region’s population is predominantly young and tech-savvy, with over 60% under the age of 30, creating strong demand for tech-based solutions. Additionally, MENA’s real estate market is relatively young, with many areas undergoing rapid development, making it an ideal environment for PropTech startups to thrive.

A report by Realiste highlights significant growth potential for PropTech in the region, with the Middle East real estate market projected to expand by up to 111% in the next five years, driven largely by new technologies. Expected to play a major role in this transformation are virtual reality, artificial intelligence (AI), and self-service platforms like Airbnb, which align with modern consumers’ preference for streamlined services. However, challenges persist, including a lack of reliable databases for real estate companies, transactions, and future projections.

Two notable markets undergoing urbanization and digital transformation are Egypt and Saudi Arabia.

Egypt's PropTech Landscape

Egypt accounts for 11% of PropTech funding in MENA. While there’s room for growth, this reflects the modernization of its real estate sector. Egypt’s Vision 2052 includes large-scale projects to build 14 new cities to address population growth and reduce urban congestion. These cities, including the New Administrative Capital (NAC) near Cairo, will be equipped with IoT-based applications, AI algorithms, and smart city operations to optimize infrastructure, including sensor-equipped roads and smart water pipes.

According to Amr Talaat, Egypt’s Minister of Telecommunications and IT, Egypt has invested EGP 50 billion in digital transformation projects and aims to grow its ICT exports. In 2022, Egypt launched Digital Egypt, a platform providing digital government services to citizens.

Saudi Arabia's Digital Transformation

Saudi Arabia, the largest economy in the Arab world, has set ambitious goals for digital transformation, investing over $6.4 billion in advanced technologies and entrepreneurship to become the MENA leader in digital innovation. By 2030, the Kingdom aims to develop eight new megacities, including Neom, Qiddiya, the Red Sea Project, and Amaala, with a total investment of $575 billion, aiming to add 1.3 million housing units. Established cities are also growing, with plans for 100,000 new homes in Riyadh by the end of 2023.

Key PropTech Trends in MENA

• Virtual Property Viewings
  Virtual reality (VR) enables prospective buyers and tenants to view properties remotely, saving time and effort. UAE-based Property Finder, for example, uses VR technology to offer immersive 360-degree virtual tours.

• Smart Home Technology
  IoT-powered smart home technology allows homeowners to control temperature, lighting, and security systems remotely, enhancing both security and energy efficiency.

• Property Management Software
  Property management platforms streamline tasks for landlords and property managers, from tenant screening to rent collection, optimizing property operations.

• Coworking Spaces
  Coworking spaces are gaining traction in MENA, providing flexible office solutions for freelancers, entrepreneurs, and small businesses. Startups like Dubai-based Letswork use technology to facilitate easy booking of coworking spaces.

In Summary:

• PropTech is revolutionizing MENA’s real estate sector.
• Egypt and Saudi Arabia are leading the region’s modernization and digitalization efforts in urban planning.
• Trends like virtual property viewings, smart homes, property management software, and coworking spaces are reshaping the market.
• While challenges remain, particularly around data availability, MENA’s real estate market has immense potential, with technology as a key growth driver in the years ahead.