The demand for affordable, quality housing is rapidly increasing across the ASEAN region, which is recognised as one of the world’s fastest-growing economies, with an average real GDP growth forecasted to reach 4.8% in 2024. The region is expected to undergo a demographic shift, with the middle-income class projected to increase to 65% of the population by 2030 from just 29% in 2010. This change is primarily fuelled by the rapid urbanisation, leading to higher consumption levels. Moreover, significant potential exists within ASEAN’s digital economy, which is expected to grow from about US$300 billion to nearly US$1 trillion by 2030. This has had an impact on industries as well, as the democratised access to mobile technology and the high speed internet has disrupted older, traditional ways of doing business, and subsequently, the consumer experience as well.
The Rise of Proptech
The real estate market is one such industry, benefiting enormously from disruption through technological introductions across the value chain. According to Markets Reports World research, the global property tech market will be worth US$53 billion by 2028. Through continuous innovation, increased consumer expectation and corresponding spend, as well as larger factors such as rapid urbanisation and a burgeoning middle class, the Asia-Pacific proptech market alone was worth US$ 5.12 billion in 2022.
Countries across Southeast Asia are also recognising the merits of the proptech industry. Take Singapore for example. As the city-state has become the regional hub for trade and commerce, it has witnessed a massive rise in demand for affordable, high quality housing as tech giants flock to Singapore. In the half-decade, the Singapore government has initiated strategic national projects to drive and enable the adoption of digital and smart technologies throughout the country. In addition, governmental collaboration initiatives with local and international universities are also helping the proptech landscape to flourish.
How Data is Changing the Consumer Value Proposition
Proptech startups have redefined the consumer journey in residential real estate, disrupting the value chain for buyers, sellers, property managers and real estate developers alike.
From automated valuation models for properties, to chatbots, virtual home tours, simplifying documentation and compliance system, more efficient and comprehensive customer data collection, coupled with advancements in data science education allow proptech companies to avail behaviour, asset and performance data to provide real time analysis and allow for far more informed decision making.
For instance, Singapore-based Mogul.sg uses artificial intelligence, locational data, and geospatial technology to streamline the home buying process. Leveraging 3D maps, geospatial analytics, and AI-based selling, the firm offers consumers fast-loading animated maps to visualise their preferred locations. Utilising data collected from satellite imagery, including over 70 million data points, Mogul provides details on Singapore’s HDB estates, such as the location of services, amenities, transport connections, schools, hospitals, supermarkets, and even features like greenery and EV charging points.
The firm also offers data on previous property transactions dating back 25 years, serving as benchmarks for future home buyers. Additionally, buyers can see the factors affecting pricing parameters, such as site orientation, amenities, floor rise, and comparative buildings of similar size and age.
A Win-Win for Consumers
Essentially, proptech increases efficiency across the entire real estate landscape. With the use of various technologies like AI, Big data and data analytics, proptech firms enable faster, more accurate decision making, transparency in the purchase cycle, and reduce operational costs and hence the ultimate burden of cost on the consumer.
By providing real-time information, proptech also greatly enhances credibility of information, enabling increased trust and reputation building in an industry that’s notoriously distrusted traditionally.
The improved customer experience – from using virtual and augmented reality to view homes and tour various properties, to personalised recommendation systems using AI, proptech is fueling innovation in a legacy industry that is set to grow exponentially over the next decade by democratising access to a fundamental human need – the search for a place to call home.
Navigating Challenges and Seizing Opportunities
While the growth trajectory for the sector seems rapid, there are challenges to overcome. Cybersecurity is one such imminent risk, as most firms operate with a large amount of private consumer data. Additionally, the region overall is still grappling with unequal access to public infrastructure, leaving the growth of proptech dependent on certain geographies for the moment. Access to affordable financing and effective, transparent cost evaluations for homes is also a challenge for most millennial buyers, who need to consider not just the purchase price but ongoing maintenance, moving and other hidden costs and fees as well. Often these cumulatively can serve to price many buyers out of the market.
With a young, growing demographic across the ASEAN region that is enjoying increased spending power while grappling with the need for affordable, sustainable housing, the expectations on and potential for proptech firms such as Mogul.sg to disrupt the legacy of real estate is tremendous. Working with stakeholders such as the government and developers alongside innovating the purchase and sale experience will be key to wooing the discerning Asian homebuyer of the future.
Who is Thanit Apipatana:
Thanit Apipatana is a Bangkok-based entrepreneur, investor, and startup advisor with a keen interest in venture building, real estate, F&B, sports and philanthropy. Mr. Apipatana has advised and invested in companies in the region, including Singapore-based proptech startup Mogul.sg and Thai-based Life Below Labs. As a thought leader, Mr. Apipatana shares his insights on entrepreneurship, F&B, education, sports and the social sector.