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HOCK LOCK SIEW

Will SoReal Prop give incumbents a run for their money?

Wed, Mar 14, 2018

Lynette Khoo


IT FELT surreal witnessing the launch of SoReal Prop, an online platform initiative that binds Singapore's biggest rivals in the property agency business together despite their differences and competition in growth, marketing and recruitment.

That "historic" move led by PropNex Realty, ERA Realty and Huttons Asia came at a time when online property listings have become a major cost for agents and the fees charged by commercial property portals, mostly backed by venture capitalists, will likely continue to increase.

Though the CEOs of these agencies stressed that this is not an attempt to take down existing property portals, there is no doubt that the SoReal Prop platform - which includes an app for agents that is free in the first year - will turn up the heat on the incumbents. This will hopefully compel them to review their revenue models and subscription packages.

Donning yellow ties (since yellow is seen as a neutral colour among the three agencies), the CEOs of PropNex Realty, ERA Realty and Huttons Asia announced on Monday their inaugural collaboration in the form of SoReal Prop.

This was a rare show of solidarity among rivals who often wrestle for market share, project marketing jobs and agents in an industry where size matters.

Under SoReal Prop, the sharing of property information, listings and documents can be done seamlessly via its portal. Real estate agents can use the RealAgent app for free in the first year, but they will have to start paying from the second year onwards. Consumers can use the RealHome app for free; this app, which allows consumers to rate their agents, is now at the testing stage.

The initiative was mooted in early 2016 by these agencies' chiefs after receiving feedback from their agents on the challenges they face when subscribing to property portals for their business, which include rising subscription fees, duplicated listings, and outdated information that is not refreshed in real-time.

This collaboration has remained a well-kept secret until now. The Singapore Estate Agents Association (SEAA) was also considering in 2016 a non-commercialised property portal for agents to publish property listings and share the database, but this idea has not taken off.

The SoReal Prop initiative came at short notice to other property agencies last Friday, three days before the launch. Even so, seven other agencies signed the partnership agreement with SoReal Prop on Monday. Talks are under way to bring more agencies onboard.

All this is commendable effort, and is very much in line with one of the key aims of the real estate industry transformation map - that is to move property transactions towards being fully digitalised and seamless.

Also underpinning the move is the growing disquiet over how much agents are paying for property listings on major portals here or for property reports that are generated using the very data that agencies share for free in the first place.

In a bid to ramp up their revenue, some portals have also introduced a credit system to incentivise agents to buy additional credits to re-post their listings, or feature themselves for certain districts or projects.

Since PropertyGuru's revamp of subscription packages last August, agents say they end up paying substantially more in subscription fees and the re-posting of listings.

Agents' subscription fees for PropertyGuru range from S$880 to S$9,880 per year, depending on their packages; SRX Property's packages range from S$699 to S$4,299 a year before discounts. But agents usually pay for additional credits in order to bump up their visibility in searches.

99.co's platform, which charges subscription fees from S$388 to S$588 a year before any promotions, does not have a credit system. Instead, agents can "refresh" a listing up to three times a day so that it comes up on the site's front page.

In the face of these incumbents, a huge plus of SoReal Prop for agents is its starting point as being non-profit driven. It has no ambition for public listing and hence no pressure to raise returns for its shareholders.

But it is early days before we know whether SoReal Prop will give the incumbents a run for their money. For now, it is unclear if this initiative will sustain beyond its one-year financial support from the top three agencies.

To keep this a sustainable effort, SoReal Prop will have to be self-sustaining through subscription fees from agents from the second year onwards. It will have to work out a formula in a way that ensures affordability for agents. But it will probably have to steer clear of the credit system of existing portals that has proven to be an upward fee spiral for agents.

SoReal Prop will also have to gain traction with consumers for property agents to want to remain on the new platform.

Still, this SoReal initiative shows how industry players, despite their competing interests, can fight back in the face of disruption, and even try to turn the tables on the disruptors.

Even without SoReal Prop, there will probably be new players springing up with similar services at lower costs, and pulling some market share from incumbent portals. This is to be expected since the government is making more data accessible in the nation's push towards fully digitalised and seamless property transactions. Of course, more automated property transactions will also mean that agents have to play roles of higher value-add that artificial intelligence cannot replace.

On that note, property portals and agents too will have to constantly revisit their relevance.