Real Estate Tech in Malaysia
Real Estate Tech in Malaysia is making the market more efficient, before the technology hit the realty sector in Malaysia, the property market ecosystem had developers and brokers who used to take prospective buyers on trips to identify the right kind of property for purchase or rent. The system still works, however, the real estate sector has realized that how technology can change the way they market their project and attract buyers.
When technology has come into play in real estate, buyers have got the benefit of having better property options and agent selections whereas developers and agents have got more business at lower cost.
The technology turns every smartphone like a sales and marketing office of developers. A buyer can also get hundreds of project on a single platform. He only has to fill the location, the price bracket in which he is searching a property and the type of flat he is looking for in the search option and with one click, he gets all buying options in his preferred price range.
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The realty stakeholders of Malaysia believe that technology can make transactions easier and rewarding experience for everyone.
Due to slump in the real estate sector, realtor’s profit margin has dipped considerably, so they are looking for ways to reach the larger market segment and boost their sales. They know that only technology can make it happen.
Before we take a look at the how far technology has penetrated into the realty sector, here’s a brief look at the current property market scenario in Malaysia.
Real Estate Scene in Malaysia
Like many other countries, Malaysian real estate industry is also going through a severe slump since 2013-14 mainly due to the international financial crisis.
According to Malaysia’s National Property Information Centre (NAPIC), property transaction in the residential sector dipped 4.6% in volume and 10.5 % in value in 2015 as compared to 2014.
Developers don’t want to launch new realty projects as they feel that they will find it hard to sell them. The NAPIC data suggest a 19.2% decline in the launch of new project in 2015 from 2014. The situation has further deteriorated in 2016 and early 2017, and it doesn’t seem that market will improve shortly.
Banks have made the criteria to offer home loan more stringent, and property prices have also gone up beyond the affordable limit in some areas of the country. These have also impacted negatively to the housing market.
But experts feel that market has already seen its worst and things will improve in the coming few years. According to them, the crisis is not due to any internal dysfunction, but it is due to international market conditions.
Many research and surveys have shown that there is still a high demand among people to buy home. For instance, a study done by PropertyGuru, a realty tech startup, says that 60% of the respondents want to buy a new home within six months.
Such surveys have made experts believe that the market will move towards positive sentiments as the top priorities of the buyer are the type, size, and location.
Some experts say that the situation will start improving from 2018-19 when end users will start returning to the market, and the temporary phase of recession will get over.
Real Estate Tech in Malaysia
The use of technology in real estate is at the nascent stage in Malaysia as property website, and mobile applications have come up to assist homebuyers and investors to select properties that suit their pocket. These websites offer property listing, blog content on real estate market projections, search options, area specific feature guide and other related services.
Some of them provide experts who take questions from the people and offer advice and buying tips free of cost.
Real estate experts believe that the Real Estate Tech players in Malaysia should take the help of the technology which will not only add value to the property market, but it also becomes a game changer. They believe that people’s trust in digital media and social platforms have enhanced which is visible from the rise of e-commerce.
Of late, a lot of developers have decided to use virtual reality technology to boost their sales. It is an innovative technology that can allow any buyer or investor to get the real time construction update through videos from any part of the globe.
Besides this, the technology has multiple benefits. Every developer opens its sales and marketing office in various locations to sell its project. With the help of VR technology, the developer can have a virtual show unit and virtual gallery at far lesser cost than a complete sales unit.
Top Realtors of the country believe that VR can reduce the cost of the project by 10 to 15% at the pre-construction stage. But above all, the technology can help them expand their reach at minimum cost.
One of the realty tech startups, PropertyGuru has introduced drone videos which provide buyers a top angle view of a property and the infrastructure that surrounds it.
Along with VR, the other innovative measures have also got the attentions of the sector. But the realty tech scene has many challenges. Investors don’t seem to be quite enthusiastic putting their money into Malaysia realty tech startups.
In fact, Malaysia-based Frontier Digital Ventures, which is reportedly the third-most active investor in real estate tech since 2011, has invested but in Latin America-focused listing service VivaReal and Africa-focused listing service PropertyMaputo.
Real Estate Tech in Malaysia – Top Startups
Last year in October, GOWU Portal Sdn Bhd (GOWU) launched a real estate mobile application which will help to bridge the gap between both buyers and developers in Malaysia. The team of experts from the company assists buyers and sellers to stay connected through a smooth process of the deal till it gets finalized.
Besides this, the app will also help deal with all legal hassles of buying a property in the country. Along with listing and search options, it acts as a marketplace for buyers, agents and property dealers.
Besides Malaysia, GOWU is also available in Hong Kong, China, and Thailand. The company plans to reach one millions users by the end of 2017. It has spent US$ 1.17 million to the developer this mobile application for Malaysia and US$4.68 million for other three countries.
Another Malaysia-based Tech startup, Fang Tian, too launched a real estate mobile app platform in August 2016. The company aims to complete transactions of 30,000 property in the next three years with an estimated trade value of US$2.45 billion.
Malaysia startup bumbung, which was launched in May 2016, claims to be the first tech-based real estate company which can help connect home buyers with reliable and reputable brokers and developers.
Asserting to make the transaction process convenient, transparent and innovative, its promoters say?that once a prospective home buyer key in his requirement in the search option on the website, he will be connected to five relevant property agents within 24 hours.
Besides startups and tech-based companies, some property brokerage firms have also introduced technology in their day-to-day operations. For instance, RedBricks, which claims to be Malaysia’s first tech-based property agency, says that its cloud-based CRM allows negotiators to track, manage and study leads to improve conversion and increase efficiency.
Besides these tech-based mobile applications, there are dozens of websites and startups that can help buyers match the developers and brokers of his choice and need.
Some of these prominent websites are iProperty, PropertyGuru, Propwall, DurainProperty, PropertyCircles, iBilik, Prophunter, Speedrent, PropSocial, Property Pricetag, WonderList Property, Proper.my just to name a few.
Many of these websites also offer their mobile applications. Also, some of these websites were born out of the frustrating experience of some youngsters to look for an ideal property to buy or rent.
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For instance, Speedrent’s founder Wong Whei Meng decided to disrupt the property agent services when he realized as a landlord that dealing with brokers is a time-consuming affair and that they didn’t provide him with any real value.
A crowdfunding site launched in July 2013 in Singapore, CoAssets lists properties from around the world, and it has launched a Malaysian office recently. The company says that it has crowdfunded US$26 million for over 15 projects, with a total payout of US$88,000. It further claims an average return of 10 to 20 percent.
Opportunities in Real Estate Tech in Malaysia
At present, Malaysian realty tech startups and companies are limited to offering to list, search and marketplace services. With these services, a buyer can narrow down his property search and can even buy property online as well.
However, technology such as virtual viewing, 3D printing, augmented reality, immersion screens, interactive screens and dynamic, interactive apps, project mapping and social media strategy is missing from the real estate market in Malaysia. Startups can import such technology tying up with other companies and can come up with customized version in the country.
Conclusion: Real Estate Tech in Malaysia
Real Estate Tech in Malaysia, is just the reflection of the realty scenario in the country. Since the market is struggling with sluggish demand, the tech scene is also trying to come of age from infancy. The positive side of the country’s realty sector is high local demand for property which is sure to take the market out of a slump and on the path of recovery, and this will give a lot of impetus to the current realty tech startups.
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