Every year, hundreds of thousands make a pilgrimage to the holy city of Mecca in the Kingdom of Saudi Arabia. But this is not all that this Arab Sovereign State is known for. The modern city of Riyadh showcases Saudi’s urban side whereas Jeddah mixes the modern with history with an enchanting old city made of coral.
One can also head to the Red Sea coast if they seek world-class diving opportunities. This varied landscape provides opportunities for Proptech in the Kingdom of Saudi Arabia, but there are other factors that play a part.
The Kingdom of Saudi Arabia is the world’s largest producer and exporter of oil, and it is categorized as a World Bank high-income economy. It is the fifth largest state in Asia according to size. Its economy is often criticized to be the least diverse due to its major dependence on oil, and lack of any other resources. This monarchical autocracy nation hence is starting investment in a number of different sectors as part of its Vision 2030 program, including in real estate. This gives chance for Proptech to develop here.
It is also interesting to note that the Kingdom of Saudi Arabia is heavily dependent on foreign workers with more than 80% of the people employed in private sector being non- Saudi’s. Other than the major challenge of diversifying the economy, the Saudi government is also facing more challenges like the decline in per capita income, housing construction and most importantly providing quality education and skill to the growing youth to prepare them for the employment. Still, technology deployment and entrepreneurship is on a rise here which directly impacts the rise of Proptech in the Kingdom of Saudi Arabia.
Technology, Entrepreneurship, and Vision 2030 of Saudi Arabia
Mobile phone use reached 99.16% in 2018, the General Authority for Statistics (GASTAT) revealed. The same survey revealed that around 75.19% of individuals of varying ages said they used a mobile phone, while 92.66% of people aged 12 to 65 said they used mobiles in 2018. It is one of the most promising internet and mobile banking markets in the Middle East region. As the government is moving away from its sole dependence on oil as an economic driver, it is increasing its reach in multiple sectors, and investing heavily in technology and real estate development.
Both these sectors are touted to major players in the economy and together they make the market ripe for Proptech in Saudi Arabia. The Arabian government is at the forefront of global innovations and quick to adopt new technologies like Internet of Things (IoT), 3D printing, cloud computing and even virtual reality (VR).
As part of Vision 2030, entrepreneurs will have an increased role to play in the shift of dependency on oil and more public companies are coming forward to invest in unorthodox ideas. Startups are the perfect vehicle to increase employment for youth and create sustainability in the middle-income group of here. Increased venture capital is also creating a more conducive startup ecosystem for Saudi Arabia, and a good development field for Proptech in the Kingdom of Saudi Arabia.
It is not news that the Kingdom of Saudi Arabia and the GCC nations, in general, are now rapidly adopting new technology to more effectively construct and maintain real estate. The traditional real estate buying and selling process are being disrupted and one can see not just real estate platforms but also the adoption of technologies like cloud computing, the blockchain, virtual reality, IoT and 3D tours and drones. These technologies are bringing more transparency, efficiency and quicker turn around time in real estate transactions, paving the way for the growth of Proptech in the Kingdom of Saudi Arabia.
There are just some of the startups that are working in the space of Proptech in the Kingdom of Saudi Arabia. The Proptech space here is shaped by entrepreneurs trying to innovate for local problems, garnering renewed interest and funding from Silicon Valley and other markets. There are also startups here that are utilizing 3D mapping and virtual reality to provide tours of properties. It is true that the market is still budding and a lot needs to be done before the market is reinvented and Proptech in the Kingdom of Saudi Arabia becomes lucrative.
Way forward for Proptech in Saudi Arabia
New technologies and innovations are entering the Saudi Arabian market, and with the renewed attention of the government towards real estate and technological adoption, good times are ahead for Proptech in the Kingdom of Saudi Arabia. The developing real estate market as well rises in entrepreneurship combined should lead to a flourishing Proptech sector that disrupts how property is dealt with as of now. Currently, there are very few companies in this space but that should change soon. The coming few years should bring lucrative opportunities in this space as real estate market as well as proptech of here takes a turn towards growth.
Source: PropTech Time