Thomas Ma already knows what to expect from real estate technology in the new year.
Reigning from one of Hong Kong’s leading real estate developer families, Ma partnered this year with real estate icon Fredrik Eklund to launch REAL Messenger, the social app for real estate.
In the course of 2023, Ma predicts the death of iBuying. An iBuyer is a company that provides instant cash offers in order to purchase properties outright.The current iBuyer models are taking advantage of sellers/buyers, stealing agent’s leads and then making profits out of it. Furthermore, Ma thinks AI and data analytics are not only for property assessments. They have multiple uses. Agents can use insights to evaluate and learn their content performance, client behaviors, etc, to improve their business model and marketing strategies.
Digital Journal: How has technology changed the real estate business over the past five years?
Thomas Ma: There is a lot of technology for hardware and IoT in real estate, with cloud brokerage emerging to help real estate agents to work remotely. However, there is still room for improvement. The evolution in how we’ve communicated since the pandemic has created a real estate market in desperate need of innovation. As businesses and consumers increasingly rely on technology to connect, source new business, and provide customer management in real-time, it’s imperative to have a globally accessible, 24/7 communication platform to accommodate a ‘phygital experience’ (a blending of digital experiences with physical ones).
A communication platform that mirrors the real-life experience with calling, streaming and video capabilities makes that possible. REAL brings that opportunity to consumers and agents for a personalized homebuying experience built on curated, machine-learning data.
DJ: How has proptech innovated recently?
Ma: Cloud brokerage is an area with an incredible opportunity for growth. Unfortunately, numerous surveys of real estate brokerages reflect that the real estate industry is one of the slowest to matriculate technology adoption and innovation into their essential services.
I expect to see a growing transition to this industry in the coming year as professionals opt for cloud-brokerage companies for various benefits, including efficiency, speed of delivery and better control over their leads and CRM.
Many recent proptech innovations have been interest-rate dependent. In 2023, I predict continued shuddering of these technologies that failed to deliver an effective long-term business strategy. A key example from this year is the axing of iBuying.
DJ: How important are data analytics?
Ma: Data for proptech companies can predict or provide data in the market. However, the primary pain point for analysts and data scientists is unstructured data sets. If you’re using data to analyze market needs, inform business decisions and build a long-term strategy, relying on partial amounts of data can make or break a business closing its doors like many of the proptech companies we’ve seen this year.
Time lags can also lead to more fragmented data, making it harder to analyze and not a complete picture of the market and behavior of the whole industry. Without the context of instant behavioral data, historical data is of little value to guiding market predictions and business decisions.
As a result, organizations must have a refined AI powerhouse working in the background to implement a successful long-term strategy. A vital source of reliable, high-quality data and an AI platform that can correct itself in real-time reduces mistakes, improves industry workflows, and even predicts future markets to help guide better-informed business decisions.
DJ: How has AI transformed real estate?
Ma: AI can be a matchmaking dream for real estate professionals and homebuyers if implemented correctly. The matchmaking capabilities of machine learning allow agents to improve their overall efficiency and workflow by narrowing their target demographic to reduce wasted time on dead-end leads with little intention to buy.
As AI evolves, it will be crucial for businesses across every sector to automate user sentiment and provide real-time solutions that better serve their customers. For agents, in particular, REAL can quickly access consumer homebuying preferences, tastes and budgets to match them with more accurate listings.
DJ: Which types of clients do new technologies appeal to?
Ma: All real estate stakeholders would benefit from these new advances in proptech. Buyers, sellers, agents and investors can all benefit from AI technology. Consumers don’t want to be bothered with long, gruelling searches. Investors want to invest in technologies that appeal to consumers.
Data-driven decision-making is the garnish that completes the personalized buyer/seller experience that real estate has historically captured incredibly well. New technologies have the potential to save clients time, money and resources to match them with more accurate listings.
DJ: Are there any barriers to implementing further advances in technology? How might these be overcome?
Ma: Over the last few years, we have witnessed multiple proptech companies try to implement the iBuying model. While the iBuying model was successful in a hot market, the business model lacks sustainability in relying on the economic state of the market.
iBuying was built on an entirely new business model that went untested before hitting the market, posing significant risks for wary investors of what a crash may look like down the line. Relying on specific algorithms to dictate home prices became a significant issue for many of these companies. Innovation for the sake of innovation has little potential for long-term adoption if the technology is market-reliant.
DJ: What are your key predictions for 2023?
Ma: To successfully target customers, we must understand their needs, budget, values and desires. We can do that through AI. I predict that agents won’t be able to do their job in five years without data analytics.
Data quality trumps quantity to give real estate professionals a clear competitive advantage to close more deals and create personalized experiences for key stakeholders.
AI-type services will kill off any portals that do not focus on AI in the next five years. If they continuously become a database type of portals and their revenue model is ad-based instead of a subscription (i.e., SIL), it won’t be as strong. Eventually, AI will kill off those portals. Businesses that don’t pivot to a subscription-based and value-added model will risk becoming obsolete.
DJ: How do you see real estate evolving over the next ten years?
Ma: AI will allow us to predict and implement customer needs and solution-based services. Technology will continuously be implemented as all stakeholders in real estate search for the most personalized experience.
In a competitive market, the MLS moves too slowly, leaving buyers and sellers searching for any tool or app to get them ahead in the real estate game, even if it means giving away their data for free.