PropTech: Beyond the Classified Section

There’s a great deal more to property tech than online real estate listings sites, explains CEO of PropertyQuants, Nelson Lau, and Talox cofounder, Yves Luethi.

Singapore has become something of a regional hub for the PropTech sector. Of the US$7.8b in investment channeled into PropTech from 2013-2017, a large proportion of that sum, about $4.8b, flowed to start-ups in Asia-Pacific, according to reports from Jones Lang Lasalle. In 2017 Savills estimated the value of all developed real estate in the world at US$217t, one third of which is readily investable at scale.

Just as entertainment, transport, publishing, retail and numerous other industries are undergoing dramatic changes as a result of advances in technology, so too is  property in the midst of transformation. And whilst online classified real estate businesses are the best known face of property tech — or ‘PropTech’ — the areas being disrupted stretch far beyond listings sites such as Propertyguru or 99.co, prominent though they may be.

The advances taking place right now promise not only to make the buying, selling or leasing of property simpler, more efficient and transparent. They will also revolutionise the way properties are built, maintained, financed, transacted, planned, designed, operated, inhabited, and even their ownership structure (with new options like crowdfunding and fractional investment). Essentially, PropTech will improve processes and services across all areas of residential and commercial real estate.

Despite the high stakes, property investment decisions can frequently be driven by intuition, emotion, and flawed or limited data. Often, real estate practitioners will only possess expertise in their local market and will lack the ability to properly analyse the data they have in hand. Advanced artificial intelligence and machine learning (AI / ML) are helping solve these problems, allowing the analysis of data at scale to reach actionable conclusions. Through data science, PropertyQuants answers the question, “Where in the world is it best to invest?”

Property is a gigantic asset class, the largest, and in part due to its size, has been slow to evolve and sluggish in embracing the transformation new technology has brought in other sectors. On the plus side, that means there are enormous opportunities for entrepreneurs to devise solutions to the myriad inefficiencies and difficulties faced by all parties in the property sector.

Numerous Singapore-based start-ups are doing fascinating work in this area. For example, Attribuild transforms architectural floorplans into data, gauging how efficiently space is being used in a property and its suitability as a residence or place of business. Thanks to local start-ups such as Panopedia and WoobaVR, it is possible to conduct lifelike remote tours of properties using virtual reality (VR), augmented reality (AR) and 360-degree viewing, and also to figure out how a space works or what it will look like furnished — even if it’s yet to be built.

In partnership with state-owned real estate company JTC Corporation, H3 Dynamics’ H3ZoomAI has developed sophisticated drones that are able to check for hazardous defects in tall buildings, in places almost impossible for human inspectors to reach. Addressing another sort of danger — the difficulty for young people today to get a foot on the property ladder, when that requires a substantial down payment of $200,000 or more — start-ups such as InvestaCrowd and Fundplaces are working on crypto tokenisation of property, allowing Millennials and Generation Z to get into the market with investments of only a few thousand dollars.

A recent Singapore government white paper outlined plans to increase the country’s population by some 30%, to 6.9 million, by 2030. It is expected that much of the population growth will come as a result of immigration. There will be a need to accommodate and provide commercial real estate for the new arrivals — PropTech will be useful in a variety of areas. It can help smooth the tenant experience, perhaps providing temporary or co-living solutions, and facilitate the leasing of commercial and residential properties. PropTech can aid developers and investors in deciding where best to allocate their resources, and solutions of the sort offered by Talox give  landlords the wherewithal to efficiently expand their portfolios, using analytics to better assess and address risks and opportunities.

Despite the old saying, “Safe as houses,” property can be just as risky as any other asset class. (Remember 2008?) Listings sites may have made it easier to buy and sell properties, but it is the new wave of PropTech allowing us to make those decisions in a more informed manner, minimising risk, that could be to our greatest benefit.