Proptech 3.0 start-ups in Singapore and elsewhere in Asia Pacific will face significant challenges in hiring experts with the required domain expertise, said a recent report by JLL.
A key reason for these challenges faced by Proptech 3.0 would be remuneration – there is a significant disparity to overcome in order to draw technical specialists away from conventional firms.
The report, ‘The Growing Influence of Proptech’, pointed out that in Singapore, the median salary of a Construction Project Manager is S$84,184 per annum whereas start-up founders can usually expect a starting income of S$24,000 to $60,00020, which indicates that of the same level, personnel at start-ups cannot expect to earn the same rate as their peers who work at more established firms.
JLL said that with total value of investable global commercial real estate reaching US$65 trillion by 2020, with Asia Pacific accounting for over 30 per cent of this increase, considering the number of emerging markets in the region and their accelerating urbanisation rates, the Asia-Pacific region will play an increasingly important role in the global real estate landscape.
“This is a sector that has been under-served by start-ups, but not for long. Property technology –or proptech– start-ups have begun entering a space traditionally dominated by large incumbents. Asia Pacific has seen its own share of proptech start-ups emerging. Our research shows that they have received around 60 per cent of over US$7.8 billion invested in proptech startups worldwide since 2013.”
The report noted that the market dynamics of the Asia Pacific property market have caused proptech here to evolve differently from proptech in North America and Europe. Property listing start-ups have the lion’s share of funding, driving rapid expansion into adjacent verticals such as big data and analytics.
Meanwhile, Asia Pacific’s diverse demographics and differing levels of infrastructure and development present challenges such as the lower availability of tech talent and consumer preferences for offline channels and tools.
JLL speculated that such difficulties should be alleviated soon given the growing smartphone penetration in Asia Pacific and rising salaries in the technology sector, which will attract an influx of talent from traditional industries. Other strong drivers of change like rapid urbanisation and government support for Smart Cities are likely to boost the development of proptech as well as corporate engagement and collaboration in this space.
JLL added that there are plenty of opportunities to be first movers in the under-served niches of proptech 3.0.
The report noted that the current Proptech 3.0 wave – arose shortly after Proptech 2.0 in 2014, and that is led by startups employing emergent technology such as Unmanned Aerial Vehicle (UAV) and solar power to address enterprise needs.
These products require heavy upfront investment and domain knowledge in the property sector. JLL said that Proptech 3.0 innovations are built from the ground up to address complex enterprise needs instead of being adapted from products of other sectors.
“With the continued growth of the property sector, property developers and brokers will face a corresponding increase in demand for their services. This is a growing niche that start-ups can serve and benefit from. The rising importance of technology in all aspects of life has encouraged the growth of technical sophistication within the region and attracted global tech talents to Asia Pacific.”
This sets the stage for technically advanced Proptech 3,0 start-ups catering to enterprise needs to grow rapidly, said the report.
Singapore also is fast becoming the regional HQ for Proptech 3.0 startups, the report said. Adding, the Republic’s branding as “smart nation” helps this drive. Singapore was recently awarded top ranking in Asia in JLL’s “Global Real Estate Transparency Index”.
Mr Paul Ho, the chief mortgage consultant at icompareloan.com said Proptech was already disrupting traditional business operating models in real estate here.
In keeping up with proptech start-ups, property agents “must upgrade or die”, said Mr Ho. He noted that many property agencies struggle to keep up with all the regulatory changes in the industry, as well as the changing financial calculations for acquiring a property. He urged property agents to master the basics in property financing, refinancing, taxation and CPF.
Mr Ho said that iCompareLoan.com runs a full 2 – 3 days course on how property agents can produce such reports for their customers. He added that the trademarked course teaches Property Agents how to generate complicated Financial calculations using – Home Loan Report (TM) – in 3 mins flat. This helps Property agents to close deals faster and serve customers more professionally.
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