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1 Key Takeaway from the Potential Disruption of Singapore’s Property Sector

Traditional industries are facing disruption, and the property sector could be next.

Singapore’s stock market is home to several large real estate companies. The incumbents range from real estate developers like CapitaLand Limited (SGX: C31), and City Developments Limited (SGX: C09) to logistics property provider Global Logistic Properties Ltd (SGX: MC0).  

A Business Times report said that real estate tech platform, www.disruptproperty.com, had listed 33 property technology companies – termed “proptech” – which are using technology to improve traditional property services. Among the areas that proptech is looking at are crowdfunding, property search, video analytics and so forth.

In essence, the disruptors are looking to solve existing problems by leveraging the use to technology. As investors, we could learn from this disruptive approach.

Simplifying onerous processes  

The process of buying or selling a home is far from simple.

For one, there are several parties involved in the transaction including the home buyer, the home seller, the property agents, insurers, lawyers, banks and even the government. The amount of paperwork involved between the different parties is significant and often onerous.

From the Business Times report :

“Property information such as ownership details, addresses, maintenance and repair history, et cetera, is recorded on the immutable digital ledger, such that home buyers and sellers can enter into “smart contracts” – digital contracts that automate the offline functions presently handled by agents, lawyers and banks. This also makes transactions cheaper and quicker.”

The solution above attempts to alleviate the pain point, that is the onerous amount of paperwork, and to simplify the process so that it is more efficient, faster and trackable.

Therein lies a lesson about disruption.

Are there processes within industries which involve a large amount of documentation? Are there multiple parties involved in the process that will benefit from the transparency of information? Can technology reduce the amount of duplicated documentation?

In my opinion, these are pain points that are waiting to be solved. If we are able to identify these pain points, we might have found the next area that could be ripe for disruption.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Chin Hui Leong doesn’t own shares in any companies mentioned.