PART 1 Proptech 3.0: Changing the Face of Property
Faced with stagnating property values, developers, investors and industry stakeholders are turning to property technology (proptech) in ever-increasing numbers to differentiate their portfolios.
In fact, global investment into real estate tech startups in the first half of 2019, at US$12.9 billion (RM54 billion), has already exceeded the 2017 full-year record of US$12.7 billion (RM53.2 billion).
Regionally, innovations in augmented reality are already changing the way home seekers seek, learn about and evaluate properties in markets like Singapore. Closer to home, advances in proptech have the potential to fundamentally transform how property is conducted as a business in Malaysia.
Evolution of Proptech
From the Humble Excel Spreadsheet to Regional Proptech Powerhouses
It should be noted that proptech has been around for decades, with each wave reflecting trends in computing as well as housing. Currently in its third iteration, early proptech was driven by the growth of personal computing in the 1980s.
This early wave saw the rise of applications such as Excel and computer-aided design (CAD), both boons to the property segment, as well as industry giants such as Microsoft and Autodesk.
It coincided with the implementation of large-scale national housing projects in Malaysia, as well as the transition to affordable housing quotas by private housing developers in the mid-1980s.
Proptech 1.0, with its heyday in the early 2000s, was largely an overseas phenomenon, with online property marketplaces such as Zillow, Procore and Trulia laying the foundation for increasing consumer confidence in online transactions.
The next wave, dubbed Proptech 2.0 is currently ongoing. Reflecting more dynamic online experiences with the advent of Web 2.0, this wave saw the rise of shared economy giants like Airbnb and WeWork, as well as regional proptech powerhouses such as PropertyGuru – all of which have made their way to local shores.
This shifting tech paradigm remains deeply tied to the national housing agenda, with players such as PropertyGuru helping Malaysians in their aspirations to own homes with proptech innovations like Home Loan Pre-Approval.
Such solutions promote convenience and transparency in the home loan application process by allowing home seekers to know their loan eligibility ahead of time – a key challenge in conventional home financing in Malaysia.
In review, Proptech 1.0 and 2.0 focused on the evolution of the consumer journey, with solutions tailored to address consumer needs. Moving forward, Proptech 3.0 is set to change the way the property supply chain itself works, primarily through digitalisation.