Tech bigwig Paul Philipp Hermann shares his insights on Southeast Asia’s booming online real estate sector
Paul Philipp Hermann, global co-founder and managing director of Berlin-based real estate network Lamudi, recently spoke with Property Report about his emerging market predictions for the New Year.
According to Hermann, 2015 was a big year for Lamudi in Asia, with constant improvements made to its website and mobile applications, as well as the acquisition of the MyProperty.ph brand in the Philippines and PropertyKita in Indonesia.
“We have even bigger things planned for 2016 and a continued focus on our Asian markets is a part of those plans,” he said.
Here’s the rest of our conversation with the Lamudi co-founder:
Give us a brief background on what happened last year. What were the biggest issues that Southeast Asia’s online real estate industry faced in 2015?
The biggest issues in 2015 were internet accessibility, lack of market transparency and the preference of agents and developers for maintaining their use of traditional offline methods of conducting transactions.
Paul Philipp Hermann, Lamudi’s co-founder and managing director
However, in countries like Indonesia and Myanmar, internet penetration increased dramatically in 2015, in many cases doubling since 2014. There is a growing preference among consumers for mobile internet access, which we predict will lead agents and developers to acknowledge the value of doing business online.
Although lack of market transparency is a continuing problem, it is on the decline thanks to the help of government regulation and involvement from online giants like Facebook and Google, who empower consumers with easier access to information at low bandwidths.
Based on your estimate, how many online real estate users are present in ASEAN?
As we currently have a presence in only three ASEAN nations – Myanmar, Indonesia and the Philippines – we don’t monitor these statistics for the entire region. However, we estimate that the number of overall Internet users in the ASEAN markets where we do business to be about 132 million, which is approximately 30 percent penetration – an increase of more than 10 percent since 2014.
In addition, our research shows that real estate transactions in the Philippines make up approximately 11 percent of GDP; Myanmar real estate makes up about three percent, and Indonesia’s comes to around seven percent. This amounts to approximately 95 billion USD.
More: Meet the woman who is helping to shape the Philipppines’ online real estate revolution
The region recently witnessed various national elections take place, and this 2016 it will be the Philippines’ turn. How has politics and political reforms impacted the property portal industry?
Naturally, policy changes in any market have both a direct and indirect effect on the real estate industry, including online property portals. During the elections in Myanmar last November, there was a slowdown in the industry due to the uncertainty of upcoming changes in real estate taxes and government policies.
This is not uncommon in the emerging markets, and it usually resolves itself once investors and property hunters become more comfortable with new policies. Myanmar’s new democratic government is certain to be a boon to the industry. Likewise, Indonesia real estate, especially in Bali, is expected to surge after limitations on foreign investment are lifted.
The progress of Southeast Asian real estate is affected by changes in foreign countries as well. For example, when the central bank of the United States raises its interest rates, it has an effect on emerging markets that have dollar-based loans, which subsequently has an effect on real estate values.
Where do you think is the next real estate hot spot in Southeast Asia?
In our opinion, the next real estate hot spot in Southeast Asia will not be a single locality. The biggest gains and progress will be found in emerging cities and will slowly move away from large cities like Jakarta and Metro Manila. Naturally, hot spots depend on property type as much as they depend on location. In the Philippines, the next hot spot for residential properties will be Boracay, currently the most popular vacation spot in the country.
In contrast to the growing popularity of emerging cities, megacities will never go out of style as they offer the convenience and efficiency of urban design and planning. For example, Yangon is receiving a lot of attention right now for its commercial real estate possibilities. Developers from Thailand and Vietnam are now entering the market, and other nations are expected to follow.
What are your boldest predictions for the property industry in Southeast Asia for 2016?
Lamudi’s boldest predictions for Southeast Asia in 2016 are that mobile technology and rising foreign investment will change the face of the market. Mobile devices and apps will have a huge influence on how people conduct real estate transactions. Foreign investment in both infrastructure and real estate development projects will grow substantially.
We predict that mobile apps, especially in the early stages of property hunting, will guide prospective buyers, renters and investors through the process, creating an abundant amount of leads for agents and developers. Although mobile and online-based real estate will never fully replace traditional methods, the majority of property hunters will start to look to apps and websites as a first step.
Foreign investment in Southeast Asia is also expected to rise greatly as the ASEAN is fully integrated into a single economic bloc. If the real estate markets of nearby nations like Pakistan are any indication of Southeast Asia’s future, it is expected that economic giants like China and Russia will become increasingly involved in the sector.
Now read: The winners and losers in ASEAN real estate in 2015
Source : property-report.com
Read more…Emerging market predictions in 2016 from Lamudi’s co-founder
