Unlike during the 2007-08 Global Financial Crisis, opportunities never go unnoticed in today’s age of enhanced information and transparency, thus allowing investors to seize on them irrespective of where they are.
Data democratization is the ongoing effort enabling everyone—regardless of location, expertise or social status—to gain instant access to information, capitalize on trends and ultimately make data-driven decisions. From an investment perspective, the impact of data democratization is two-fold. It allows investors and companies to be fully aware of options, enabling them to identify opportunities as they arise, instead of adopting the ‘spray and pray’ approach.
This in turn propels the growth of attractive markets, sectors and economies that have proven worthy of those investments.
Role of data in property market development
Take real estate investment, for example. One of the main reasons wealthy individuals have been moving to Dubai is that they have been made aware of the lucrative opportunities in the property sector. Although the information democratization started taking shape much earlier, the speed at which it travels now, the variety of reliable information sources and transparency were not as ubiquitous.
Investors sitting in India, China, Russia, Egypt, UK, Europe or any other part of the world are aware of the latest real estate offers, prices and market trends in the UAE, as much as those investors here. Real-time data meant people can easily identify opportunities and take advantage. The new market reality data dominance has created serves as a hedge against recession by deservingly drawing investments into high-performing markets.
In the last credit crunch, this was not quite the case. The transition to a more democratized view of data since has made a huge difference for investors, companies and economies. Today, information about price drops in real estate may trigger a wave of investments, boosting sector growth and contributing to the economy. On the other hand, a negative market sentiment can have a wide-reaching adverse impact.
There is no doubt Dubai boasts an attractive real estate proposition that stands to benefit from data democratization. Russians have been flocking to Dubai not only because they find a safe haven, but gives investors access to opportunities through an open knowledge gateway, allowing them to reap differentiated returns. Dubai remains a unique global investment destination where HNWIs continue to unearth investment gems thanks to the prevalence of data.
The question remains: can this data be trusted? Considering the various sources of data, including from developers, agents, property portals, regulators, third-party research, as well as social media and word of mouth, I believe there is nearly zero room for misinformation among discerning consumers. Even with biased sources, the sheer volume of information and the variety of trusted sources makes it easy for decision-makers to differentiate.
Data as an asset class
Data has emerged as a new asset class, creating unprecedented value for investors and all other stakeholders. Given its growing status as a valuable asset, data is being increasingly represented on balance-sheets s. The economic value of data for countries like the UAE is also of utmost importance, especially as the nation focuses on a competitive knowledge-based economy, where data science and analytics play a key role in attracting FDI, accelerating local development efforts, and enhancing growth.
Information democratization is partially driven by the advent of data science, which involves statistics, performance trends and meaningful insights. Without data science, investments are less likely to generate a good return…
- The writer is founder and Managing Director of Union Square House Real Estate.