PART 2 Proptech 3.0: Changing the Face of Property
Digitising the Property Supply Chain to Reflect Real-time Transactions
As Industrial Revolution 4.0 disrupts industries across the board through convergent technologies, its ripples are already being felt in the property segment, traditionally an offline chain rife with inefficiencies at multiple contact points.
For example, sellers and agents are often faced with “delay of knowledge,” where property prices often lag behind current market trends due to imperfect sharing of information. It can take months for the announcement of a major pull factor such as a retail mall, for example, to be reflected in transaction prices for the area.
Inefficiencies like these are common throughout the property supply chain. They affect stakeholders from developers and investors to owners, tenants and contractors alike.
What’s exciting is that Proptech 3.0, through the digitalisation of offline processes and application of seemingly unrelated technologies, has the potential to address many of these friction points.
For example, PropertyData.my, a platform I co-developed, leverages on machine learning to anticipate future price fluctuations.
This helps alleviate the delay of knowledge prevalent in domestic property market prices, with increasing accuracy as more data is fed into its algorithm. Agents are afforded more data-driven insights to help sales, while sellers are more likely to receive beneficial prices.
In many ways, Malaysia is a perfect market for such solutions due to the relative scarcity of property valuation data here relative to more developed markets, as well as the timeliness of that data.
There have already been calls for the National Property Information Centre to release information on a quarterly basis, as reports tend to lag two quarters behind current market conditions. With Proptech 3.0 platforms, such delays are less of a concern.
AI-driven Chatbots, Robo-Advisors Transforming the Role of Agents
Another area where Proptech 3.0 can transform the industry is the role of agents in the supply chain. Here, artificial intelligence (AI), in combination with machine-learning in property valuation, has the potential to change the very face of the industry.
This is already being seen in the financial services sector, with AI-driven chatbots and complex wealth robo-advisors emerging as the new status quo. In fact, there is a close interrelation between fintech and proptech, with innovation in fintech frequently finding applications in property.
Given the financial commitment needed for property purchases, it is likely that virtual advisors in property will develop as a complement to agents and brokers, similar to their equilibrium in financial services.
Home seekers will always need the human touch when negotiating and finalising a lifelong property debt. As such, AI will automate mechanical workloads for today’s agents and brokers while generating leads, allowing them to focus on more strategic tasks.
This is seen in other areas of the agent workflow as well. For example, AI can be used to deliver actionable insights into listings performance through real-time comparison with other listings and data sets.
With these insights, agents can fine-tune their own offerings with reference to market benchmarks. This is not a possibility, but a reality happening now, with proptech players such as PropertyGuru introducing features such as Listing Performance Insights.
Building with Blockchains – Crowdfunding to Digitised Land Registers
Finally, I would be remiss not to address the proptech applications of blockchain. As an active participant in the blockchain conversation in Malaysia as well as regionally, I have watched uptake on local shores grow and anticipate this trend to continue into the future.
To start, I always feel it’s best to clear up misconceptions regarding blockchain by defining the concept itself. Blockchain is not bitcoin or cryptocurrency, but the technology on which these were built.
In simplest terms, it is a distributed ledger, where data exists as a consensus of information replicated, shared and synchronised across multiple sites. The decentralised nature of blockchain lends itself to operating models where data integrity and security are priorities.
When it comes to property, this has numerous applications, from crowdfunding platforms to digitised land registers. However, it should be noted that much of this functionality can already be duplicated by non-blockchain technologies.
At the same time, such functionality would be “tacked on” after the development of initial systems, and as such can have more problem points where data hygiene can be compromised.
By contrast, any system built with blockchain in mind from the start, with an eye to data integrity, will be comparatively more robust, stable and secure.
In the end, blockchain should not be adopted for its own sake, but for the benefits it can bring throughout a supply chain.
At Fourth Industrial Revolution Structural Transformation, our role is to ensure that the technologies driving Proptech 3.0 are clearly understood, as misconceptions can hinder the pace of progress.