Navigating the waters of property technology and Singapore’s property market | An interview with OrangeTee’s MD, Steven Tan
Picture Big Data and that fancy 2-bedroom condominium you are eyeing in Pasir Panjang. That’s not something you would typically see in the same sentence, much less imagine it. But, Steven Tan, Managing Director of OrangeTee has made it his mission to put these two things together, and for the benefit of none other than the consumers.
ZUU online met with Tan at the OrangeTee building in Toa Payoh to learn what that mission entails.
“We started to notice an industry trend towards technology sometime in early 2015. PropTech (Property Technology) companies were providing consumers with a lot more options to DIY their property transaction, along with a flat fee payment model,” Tan told ZUU online.
“It was a clear signal that the consumer was going to be king, and that we needed to provide clear value to our consumers if our agents wanted to continue to be relevant.”
Tan explained that consumers in the past had few options beyond engaging agents for their property transaction needs, because a lot of the information available was controlled by agencies. That has changed in recent years. “Now, we must able to convince consumers that the commission to their agents is a worthwhile investment, because the value they get from their agents is above and beyond the cost and time savings of them doing it themselves.” The solution – as he saw it – was a digital overhaul of the traditional property agency business.
A business transformation that is not just skin deep
Right from the start, Tan was determined that OrangeTee’s move towards technology went beyond lip-service. So in 2015, OrangeTee put together a taskforce that was committed to driving digital transformation for the entire company.
Tan told ZUU online that the taskforce continually looks at the transformation from many different areas. One of the most pivotal decisions that came out from the task force was the launch of the PropertyAgentsReview in 2016, a portal that helps consumers find a suitable property agent based on the reviews of other verified customers. “Many people will only transact a property two or three times in their life, so they may not be experienced enough to make a good decision about their property or optimize their property value. That is where a property agent can be really helpful, and it makes recognising and engaging the right agent even more important.”
From its inception, PropertyAgentsReview was designed to be user friendly and efficient. A visitor to the portal need only indicate the type of property they are interested in, whether they are buying, selling or renting, and the location in Singapore they are interested in. Within seconds, PropertyAgentsReview would provide them with a list of property agents who fit their criteria best.
Visitors to the site would then be able to access the profiles of the agents, details of their past transactions, and the honest reviews left behind by their previous customers who engaged them within the past 18 months. The platform centers around a Singapore map, which makes navigation more intuitive and relatable. It also makes it easier for consumers to locate property agents over several different locales.
Since its original launch, the portal has continued to add new features, including the search for a specific agent and the option to choose property agents who can speak certain foreign languages and mandarin dialects. Other new developments are also in the pipeline, according to OrangeTee.
As a testament to the portal’s success, PropertyAgentsReview currently has over 10,000 reviews, which Tan adds is neither screened nor edited. “We’re very confident that, ultimately, agents still have an important role to play,” he said.
Personalised insights for agents, for consumers
Perhaps the biggest changes are those that customers will not be able to see on the site. OrangeTee is building up its data analytics capabilities, in order to empower their property agents to provide more personalized insights for their customers.
At present, all property agents in Singapore are able to purchase reports from third party property platforms. The reports offer information like caveats or transactions, details of individual projects, comparisons with other projects, and some details like average transactions and district information.
While the information in these reports are handy, there is little variation from agent to agent. So OrangeTee is beefing up its dashboard for its property agents to provide additional information, like comparisons of property trends, and comparisons of projects over a longer period of more than 10 or 20 years.
“When you look at caveats over several months, you won’t be able to identify certain trends. During a downturn, the prices of everything goes down. But some will go down by a smaller percentage, or rebound much more quickly than others. Caveats won’t be able to provide that information, but data analytics can fill in that gap,” said Tan. “We would be able to identify developments that are more resilient than others, in the face of cooling measures or a downturn.” OrangeTee also has the added benefit of being able to provide more insights from its own database, to allow their agents to be more targeted in their marketing efforts.
“These are just two examples of what we are working on, but with data, there is still a lot more we can do, to generate insights for customers, so they can make the right decisions.”
Going back to OrangeTee’s basics
To be sure, Tan’s dedication to OrangeTee’s digital transformation, harkens back to his original decision to join the company in 2000.
According to Tan, OrangeTee was established in April 2000 as a predominantly online business. Tan was invited to leave his comfortable job as a branch manager in another property agency, to build OrangeTee’s offline agency business that would run in tandem with its online business. “I was quite comfortable [in my previous job], but I knew that the online space would be crucial, so I decided to join OrangeTee because of their emphasis on technology.”
Tan recalled that being an online business in 2000 was a lot simpler than it is now.
“In 2000, you just need to put information online for the agents to access, and you were already the market leader,” he said laughing. “At that time, we put caveats, transactions, and project information online and we were already ahead of the game. But our advantage was diluted when these services started being provided by other property portals.”
“Now we are in a very different ballgame, and we have to be very customer centric so our agents can maintain their relationship with their customers.”
A veteran in the property business
Tan started his career at a glass company in 1986, and was quickly promoted to become a marketing manager in a couple of years. When he noticed the growing popularity of full glass clad facades on buildings – also known as curtain walls – Tan quit his job in 1989 and set up his own company specialising in curtain walls.
The business was doing well for a time, expanding into Taiwan and then China, but ran into financial difficulty when the construction industry went into a recession in 1992. Tan made a quick decision to become a property agent and that became a 2 decades long career for Tan.
So what does Tan think about Singapore’s current property market outlook?
“Promising,” said Tan. “The overall sentiment is good, supported by the strong economic outlook both globally and locally.”
Tan points out that many property buyers are anticipating higher property prices – after recent collective sales were transacted at relatively high psf prices – and are now rushing to purchase property before the price hikes. New home sales had risen from between 7,000 to 8,000 homes in the past few years to over 10,000 homes in 2017 alone, and Tan expects the sales momentum to continue.
While many home buyers lament about the shrinking sizes of private condominiums in lieu of higher psf prices, Tan believes private homes here would never get as small as those in other developed cities like Hong Kong.
“I think, as a Singaporean, we have to get used to our homes getting smaller, because when the psf price is higher, and there is a cap from the TDSR, the only way we can purchase a property is to go for a smaller flat. But ultimately, if the private homes get too small, more people will compare and buy HDB property instead. Hong Kong doesn’t have this option.”
Investing in what he knows best
Even now, Tan admits that his own personal investment portfolio is predominantly in property. “Why property?,” he continues. “Because I’m familiar with property, and I have no time for other investments.”
“As a property investor, you must have a holding plan and an exit plan,” he told ZUU online. “A lot of people just buy because others are buying, or because the sentiment is good. All of these things are important, but you must also know why you want to buy, how long you plan to hold it for, whether it is for your own stay or whether you plan to rent it out, if you are renting, then you should also know how much of your mortgage loan can be realistically covered by your rental returns.”
“At the same time, you should also plan when you want to exit, when the price is good enough for you, because the market can be very unpredictable. That exit period could be very long, because you may not see the returns you want within the next few years, so you must also have the holding power to reach your exit plan,” said Tan.
“This is a more prudent approach, because unlike other investment asset classes, property investment is not so liquid.”
Ultimately, Tan still believes that property prices will always grow over the long term. So the longer one holds their property, the higher the chance they will see a positive return on it. “Even now, after 15 quarters of downtrend in Singapore, overall property prices fell by just 12%. But just watch, it probably won’t take 15 quarters to recover from that 12%.”