Dubai had been one of the favorable travel destinations but now it has turned into a business setup hub. Being a tax haven it provides various opportunities to the people who are thinking to settle their business in Dubai UAE. UAE is one of the fastest growing economies and will soon become a global technology hub. That is the reason they are adopting blockchain technologies specifically in Dubai.
What is Blockchain Technology?
Blockchain technology consist of decentralized and distributed digital book or registry used to record transactions across many computers so that in case of any alteration, subsequent blocks and the collusion of the network alteration is required.
This technology therefore begins a new era of technological advancement and economic growth in Dubai. According to reports, blockchain technology in middle east will be used for all the government documents by 2020.This seems to be really important for the real estate sector and particularly for setting up business in Dubai UAE.
According to the World Bank Report, 75% of the total of global $217 trillion real estate market is covered by residential property. But the real estate market is extremely volatile. This depresses the price and the transactions that are about to take place.
Real estate fintech is using innovative business models and financial technologies in real estate. According to it, 3 major categories which face the problem are asset ownership, leases and mortgages as these are firstly slow and then expensive too. This happens as the real estate market is highly volatile and illiquid. Friction cost of completing a project is 5% of the total property cost in Middle East, which is again a problem. While Dubai has been considered and it is the safest in terms of transparency and efficiency, other Middle Eastern countries lack in these factors.
Application of blockchain technology in Middle Eastern property market
These are the main domains where blockchain tech can play important role in real estate:-
Property right transfer: – Due to its decentralization and immutability blockchain tech is best suited for property rights transfer.
Blockchain Smart contracts: – For the management of transactions it is required since there is lack of trust in real estate sales, mortgages and leases. This is a self executed code generated by blockchain.
There is a strong interest and inclination to use the blockchain in real estate corporations worldwide and not only in UAE. This is so because they have the trust that this technology is going to prevent fraud and is genuine. As blockchain will be more prominent real estate firm is going to adopt this in near future.
This technology will make business setup consultants work quite easy and transparent. Though the technology is yet to come, it has opened the doors wide open for new business setup opportunities for the people as the technology is made for transparency and efficiency.