Industry transforming technologies from Crypto, Blockchain, AI and Big Data are changing industries and disrupting the way we do business. Thailand, with its rapid internet penetration rate and high social media adoption is strategically placed socially, geographically and economically to benefit from these advances in technology!
Despite this momentum, the Thai PropTech scene can often feel like the “unloved child” of the tech industry!
Most Thai PropTech enterprises, have ventured into conventional real estate business solutions, that usual focus on “advertising, marketing and sales” related platforms catered to Realtors and Developers. This has led, to a hypercompetitive Property Portal scene; with heavy-hitters such as DDProperty, Hipflat and Dot Property involved in a no holds barred struggle for market share.
A handful of startups have ventured out of this field and are making headway, such as Property Agency CRM solutions led by Property Flow. Other notable technologies include successful home maintenance app Fixzy, that offers homeowners easy access to a variety of home care service providers.
Most of these businesses are offering practical solutions with a direct route to monetization in the form of memberships and advertising subscriptions. Unfortunately, when considering some of the pressing issues faced by Thailand’s real estate, the Thai PropTech scene often aspires to be too conventional; failing to disrupt and address real market inefficiencies!
Just Food for Thought…
To clarify this article is not a cynical and critical review on the shortcomings of this new industry, but rather an optimistic open invitation to innovators!
As a modest Bangkok Property Agency, our Sales Team constantly face local issues that sadly stifle the industry’s growth. These are everyday problems faced by not only agencies, but also developers, investors and the general public.
It is our belief, that these market inefficiencies “can and should” be challenged by bold and uncompromising innovation!
The problems that really need fixing?
As an Agency our Sales Team often faces the challenge of disinformation and a fundamental lack of transparency. The result, inefficient pricing, mismanaged expectations and above all wasted resources.
Here are the 4 key market conundrums…
1. Condos and Homes Sales Transaction Records
At present in Thailand, information regarding the sales prices of condos, projects or areas are notoriously hard to access. Studying the historical sales price of properties usually requires physically visiting the local Govt. Land Office.
In comparison, in more developed property markets such as the UK the Land Registry publishes details of property transactions.
In the local context, this leaves developers and private investors scrambling for price information; at present Property Portals are servicing this need for information. While they present a “better than nothing solution”, this creates unrealistic expectations for sellers and buyers. As transaction and investments are based on advertising, rather than real historical and verifiable data.
2. “Ghost” Property Listings
Most local Property Agencies especially in Bangkok are guilty of never updating the availability of their property listings (Fresh is as guilty, as the rest…). Piling months or even years of listings onto their online advertising!
The reasons behind this inefficient business practice, is a complicated issue that usually can be summed up as:
“The more property listings advertised, the more sales and rental leads are generated.”
This has led many unscrupulous Agencies to go a step further, falsifying advertisements creating “ghost listings” that never really existed.
The result, any property searcher visiting the established portals always come across listings that were available “years ago” or that simply do not exist!
3. Rental Deposit Refund Disputes
A hyper sensitive issue, especially in Bangkok’s active rental market is the debacle of Security Deposit Refunds (Or more precisely non-refunds). This hot-button topic usually pits landlords against angry renters.
While the big stories that usually make a splash tend to involve an unscrupulous landlord cheating a helpless tenant out of their deposit. Landlords are also often cheated by unreliable tenants, that default on their rent and cause heavy tenancy related damages.
The fundamental cause of this issue is a lack of direct accountability for dishonesty.
Unlike in established markets (I.e. UK and Europe), where rental related issues have severe legal repercussions that can affect an individual’s “credit rating”. In Thailand there are little to no consequences resulting from “mischief”.
4. Property Agency Standards
There are no real estate licenses required to be a Property Agent in Thailand and there is no industry-specific legislation regulating the trade. Everyone and anyone can be and Agent and this results in varying level of standards between Agencies and Realtors, especially in Bangkok.
The immediate result of this lack of standard is the inadvertent effect of reputational hazard:
“Rental and sales clients do not trust agencies, simply because most agencies are not trustworthy.”
While many industry professionals are campaigning for a “Real Estate License” program, perhaps a more effective Tech alternative would be a service experience review website. Similar in scope and function to Trust Pilot and Trip Advisor.
This would allow Agencies and Freelance Professionals to be held accountable to the level of service they provide!
Challenging the Industry Realities? … Or Sticking to the Status Quo?
Fresh is pragmatic and understands that the issues above, do not have an easy path to monetization.
On top of this, fixing these problems are enormous undertakings that will likely be resource intensive.
What the future holds for Thailand’s Property Industry is uncertain.
However, with the advancements in PropTech it most definitely promises to be exciting!