Updated! The future of real estate agencies in a digital world

Copyright PropertyGuru

Three trends that will shape the future of real estate agencies in a digital world

(A) A Move to Mobile Centric Platforms Is Long Overdue

Property portals in Malaysia have not evolved much since 2008 when they started out as web based search portals. They have barely diversified beyond basic “pay to list” advertising, with user-value still primarily derived from property search functions.

But as smartphones have become more powerful, cheaper and ubiquitous, First Time Home Buyers (FTHBs) and property investors are increasingly using mobile apps to access property news, search for properties, WhatsApp agents for appointments, view 360 virtual tours or videos, get estimated property valuations and even to apply for mortgages online through apps like Maybank's Houzkey.

As such, mobile-first apps that make more property services accessible from one place will be the key to success. Soon in the near future, agents and FTHBs will migrate to innovative, mobile-first property portals that will integrate in-app tools to create interactive platforms, providing a single, seamless place where property buyers can plan, manage and record their entire property journey while engaging with multiple agents. See here.

In app mobile tools already available at portals:

1. Valuation tools eg EdgeProp Analytics' Polynomial Trendline and Profitability Analysis

2. Chatbots to automate simple replies to requests

3. Application for mortgage financing

4. Online scheduling of viewings

5. Automated buyer or renter feedback, offering tools for step-by-step completion

(B) Property Search Will Become More Visual

The PropertyGuru Lens product is a mobile iOS app that employs Augmented Realty and AI technology that enables property buyers to take a picture of an apartment building on their smartphones while say, out on a drive, immediately upload the picture to a server, and within minutes get a list of listings in that particular building that are for sale (or rent). ( PG Lens was launched in Singapore sometime in 2019. )

Early beta tests have been promising according to a PG press release in February 2019:

Andrew Cheah, a first-time homebuyer, gushed, "Wow, where has this feature been all this time?! It's amazing that I can just point my smartphone camera at a building and all the details like property name, agents, asking price and so on are made available to me, instantly!"

Khalil Adis, a property consultant, enthused, "This is like the Pokémon GO of property! The AR-driven feature is so cool...makes property hunting really fun and nifty."

PropertyGuru Lens will be first made available on PropertyGuru Singapore's iOS mobile app (NB: The feature is designed to run on iPhone 7 and above devices, and on iOS 12 and up). The company will consider rolling out this solution to its Android mobile app in Singapore and evaluate how best to bring PropertyGuru Lens to its other core markets - namely, Malaysia, Indonesia, Thailand and Vietnam - in the near future.

I think a similar product for the Malaysian property market could be launched in 2022.

(C) PropertyGuru's Growing Dominance

Malaysian property buyers can now click on 360 virtual tours on some portals to see a 3D model of homes for sale or rent. For example, a local start up property listings platform ZeroHero.my charges only RM99 upfront (another RM900 payable upon finding a buyer) to property sellers to list their properties. A rep from ZeroHero.my will go to the seller's property and shoot a 360 Virtual Tour, video and pictures. Prospective buyers connect directly to sellers on the ZeroHero.my platform, bypassing real estate agents. See screen captures below:

But start ups like ZeroHero.my still face an uphill struggle to compete with PropertyGuru which now controls iproperty.com because of the network effect.

PropertyGuru (& iProperty.com) together have a commanding 60-70% market share of the Malaysian property search business, more than double that of its biggest competitor. In 2020, PropertyGuru acquired a Big Data analytics company, MyPropertyData Sdn Bhd and price transactions provider Brikz.com to complement its arsenal of services and product line. Now that it has gained listing status on the NY Stock Exchange, I think but cannot be 100% certain PropertyGuru is likely to embark on an accelerated acquisition pathway to grow earnings quickly.

More Acquisitions In The Pipeline?

With the acquisition of iProperty.com, ProgpertyGuru gained access to the browsing history of an estimated 60-70% of FTHBs and property investors in Malaysia. That kind of knowledge is a valuable asset that can be used to build its own ecosystem.

I think Property Guru's next steps might be to :

1. acquire a digital bank and offer other investment products ,

2. resell mortgage products similar to Maybank’s Houzkey

3. acquire a regional or international real estate agency to capture a chunk of the lucrative New Projects properties market where commissions are not limited to a maximum of 3%.

Watch this space.

But if tech savvy FTHBs can conduct Augmented Reality and AI assisted property search using a mobile product like PG Lens, see 360 virtual tours of properties for sale or rent, and then proceed to get home loan approval (all on demand on their smartphones) who needs real estate agents any more?

Will real estate agents -maybe not now but sometime in the near future -go the same way of the buggywhip manufacturers at the turn of the 20th Century?

Perhaps the future will be bright for the small number of Tech-enabled real estate agents, and dark for those non Tech enabled agents with No Skills, No Knowledge and No Idea.

All screen captures copyright by ZeroHero.my

Notes and disclaimer:

1. I am not paid by PropertyGuru or ZeroHero.my to write this post. This post was substantially revised on March 28 2022.

2. In 2017 I started a test website featuring 360 virtual tours of properties (KLCCVirtualTours.com) that never saw the light of day. There was no market for Fisbo (For Sale By Owners) websites back then, and the costs of hosting 360 virtual tours was also high. I think hosting costs on 360 virtual tour platforms like Matterport have since fallen 80% or more due to greater competition. 360 cameras in 2021 are now also cheaper AND better than in 2017-2018 when I worked on my website, www.KLCCVirtualTours.com.