China, Hong Kong lead APAC’s $4.8b property-technology market
TECHNOLOGY is revolutionizing every business in the world. It’s creating interesting amalgamations like fintech and reg-tech, which are accelerating disruption and transforming industries to positively impact the lives of customers.
A new field, proptech, short for property-technology, has grown widely popular in the Asia Pacific (APAC) region over the past year or so. In fact, it’s already attracted investments worth US$4.8 billion.
Of that pie, Hong Kong and China have managed to secure US$3 billion. There, proptech looking to disrupt the way real estate markets work by re-shaping the way properties are built, occupied, managed, transacted, and recorded.
— KPMG in the UK (@kpmguk) November 16, 2017
According to the South China Morning Post (SCMP), the real-estate industry and the regulators in Hong Kong have been slow in tapping into these advances. Here are some reasons analysts attributed to the country’s sluggish growth:
● Hong Kong’s high living costs and history as a traditional financial center have held back innovation and tech development, according to JLL.
● Red tape. Regulators are swamped with daily tasks, and would require a special task force to lead the initiative, says chairman of the land surveying division at the Hong Kong Institute of Surveyors (HKIS) Conrad Tang.
● Highly competitive agency business and stagnant secondary market. Home sellers are not incentivized to invest in marketing.
However, according to JLL, private sector partners have been leveraging proptech solutions to their benefit. “co-working space operators using sensors to detect vacant rooms and cubicles to fully utilize space,” is a good example they cited. It’s exactly the reason proptech companies have been booming in the country.
However, it’s not just a trend in China and Hong Kong. Proptech is booming across the APAC.
Last week, a panel discussion organized by the Global Entrepreneurship Movement (GEM) in Malaysia discussed proptech and the future of the real estate sector.
One of the panelists, Malaysia Proptech Association’s Deputy President Elizabeth Siew made a very important point that highlighted the potential of the proptech sector very clearly:
If we can use technology to increase efficiency in the entire process, we will be able to achieve something that the government has been talking about – bringing the prices of houses down to a level that’s more affordable to younger homebuyers.
According to her, proptech has great potential to facilitate cross-border property transactions as well.
For investors in Hong Kong and China and across the APAC region, proptech will bring several opportunities and open several doors – simplifying the process of investing aboad.
Finally, proptech will also help transform city planning. New projects like Vektor – an autonomous spatial mapping robot; Airsquire – sensor drones to detect fires on rural properties; and Surreal – an app plug-in that allows homeowners to visualize floor plans in 3D will further boost interest in the industry, attracting more investments and disrupting real estate as we know it today.