3 Key Takeaways 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 such as  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 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.

1. Simplifying onerous processes – click here

2. Opaque market prices – click here

3. Crowdfunding

Buying and selling a property is a financially significant transaction for any individual. But the Business Times article  also points out:

“Abraham Tachjian, director of digital banking at Standard Chartered, likens it to how some start-ups have begun to monetise highly illiquid assets such as art, splitting ownership of a single piece of art into tokens and allowing multiple holders to keep their share or sell it in a secondary market.”

In essence, technology could provide a larger reach where individuals would be able to group together to invest in assets can be out of reach for the individual. While I am skeptical of the application of this idea on certain assets like art, the underlying idea deserves some thought.

Can you think of higher priced assets that are out of reach to the common individual? Are there assets which are hard to fund or not easily bought and sold?  

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.