Two months ago at SMART Expo, I spoke about ‘5 Disruptive Trends That Are Changing the Singapore Property Industry’.
In my presentation, I shared with the audience how digital technologies like Big Data, Fintech, Virtual Reality and Smart Homes are reshaping the Singapore property market, while highlighting the emergence of the DIY generation.
Let me recap 3 of the disruptive trends that will forever change our real estate industry.
Trend #1 Every buyer will be an ‘Informed Buyer’.
I mentioned in my book No B.S. Guide to Property Investment that the real estate industry is an imperfect market. Homebuyers and property investors often lack the market information they need before they commit.
For instance, many property resources and tools are designed only for real estate professionals, but not for the public. For retail investors, there is no choice but to trust the mass media and industry analysts.
However, with the availability of property portals and online databases, endusers can now do their own market research and run their own property analyses based on first-hand data.
Gone are the days when we can rely only on agents and appraisers to tell us the market value of a property. Everyone can be a property analyst in the Information Age.
How big is the future supply? Which new projects have leftover units? What are the recent transacted prices? How much rent a similar unit can fetch? The answers are just a few clicks away.
In my earlier post ‘5 ways Big Data is disrupting Singapore’ property market’, I talk about how to harness Big Data technologies to capture and analyze huge amount of property data in order to identify trends and patterns meaningful to industry players and property investors.
Big Data is definitely going to get even bigger in the future. And Big Data can turn into big profits if we know how to turn transaction data into useful insights.
Trend #2 Hear the voices of sophisticated customers.
Besides being well-informed, today’s customers are also getting more sophisticated.
In the past, developers build, buyers will come. In the internet age, developers build, buyers will google.
In the past, any dissatisfied customer can complain to ten others by phone or dozens of people by email in one day. In the internet age, any dissatisfied customer can complain in the social media and reach hundreds or thousands in one day.
Tonight after I publish this blog post and repost it on the PropertySoulBlog Facebook page, I know it will easily reach a few thousands by the next day.
Thanks to the power of social media. We have plenty of enduser reviews, discussion forums and community groups online. Customers are just a few clicks away to find out what others think of a product or a service.
If there is trust, there is business. If there is positive review, there is sales.
A value-conscious developer should put more dollars into monitoring the social media rather than advertising in print media. Afterall, there is buying interest only if a property ad can engage the target audience.
Similarly, a professional media should declare the writers’ or the analysts’ interests when they comment on the property market in any article. Afterall, there is credibility in a media only if it takes a neutral stand in news reporting.
Very soon, there will be websites to review customer service of property agents (not just OrangeTee’s Property Agent Bank with listings of only 5-star rating agents), quality of TOP projects, charges and services of conveyancing lawyers, etc. – there is nothing to hide.
Gone are the days when homebuyers have no choice but to pray that there won’t be any hiccup after they paid for their property. Customers these days know their rights, and they won’t hesitate to fight for it.
In 2015, residents of the Seaview Condo sued the developer, the main contractor, the architect and the electrical engineers for $32 million for defects in the development.
In March, 200 owners of La Fiesta complained about their units’ over aircon ledges which exceed 5 to 7 percent of the total floor area, representing a total overpayment of $18 million in unused space.
The government reacted in less than a month by stressing that “URA will take developers to task if they misrepresent important information about the units they are selling to prospective home-buyers”. It also states that “the floor area of various types of spaces, including air-con ledges and balconies, must also be accurately represented in the showflats”.
Trend #3 The age of DIY has arrived.
If we can use self-service check-in kiosks at the airport; order burgers on a touch-screen LCD display in McDonalds; pay for groceries at self-service counters in NTUC Fairprice, why can’t we buy our properties the DIY way?
A survey by the Council for Estate Agencies (CEA) proves that only 60 percent of consumers said they are likely to engage an agent for future transactions. Figures from HDB show that DIY buyers and sellers of resale flat have increased from 11 percent in 2010 to 23 percent in the last 5 months. HDB also publishes online guides and conducts seminars for the new DIY generation.
There are many portals for no-agent buyers and sellers, landlords and tenants – DirectHome, OhMyHome, Snappyhouse, and recently Stackedhomes. There is also Yotcha offering a platform for property agents to bid if they want to get the business from the sellers. For sellers, they can post online photos of their home, find an agent-free buyer, and do the paperwork on their own.
Saving money is only one of the reasons. Today’s customers have changed: They want to buy, but don’t want to be sold. They prefer self-service than to be served. Stop pushing to them what you think they want, and listen to what they say they want.
The mortgage industry is jumping on the Fintech bandwagon too. OCBC has closed more than S$10 million in home loans through its chatbot application over just three months.
Property agents, mortgage bankers and other middlemen in the property industry are facing unprecedented challenges. The future of DIY is now!
Are you ready to fully embrace the age of disruption?