Benchmarks listing against market data and home-seeker’s unique requirements
Singapore chosen to launch tool because of availability of in-depth data
REAL estate portal PropertyGuru has launched SmartSelect, touted as a “first-of-its-kind personalised property research engine” aimed at helping property seekers make their home-hunting experience journey in Singapore less stressful.
Citing its own research, PropertyGuru said that Singaporeans take an average of seven months from starting their property search to closing the transaction.
This journey typically involves a combination of browsing through properties both online or offline, in-depth research of vast amounts of Urban Redevelopment Authority (URA) and/ or Housing and Development Board (HDB) data, careful budgeting and good judgment.
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During a media briefing, PropertyGuru Singapore managing director Lewis Ng (pic) described SmartSelect as “the next step forward” for the company in innovation, the result of a two-year research and development initiative.
“The property market is changing and condition are changing. We feel from the consumers that there is a hunger and thirst for more data and depth of information.
“And SmartSelect is a tool that is going to enable us to provide that, and help consumers with their search,” he said.
Ng claimed that the company currently enjoys an 85% share of the Singapore market, with 3.5 million users accessing 210,000 listings every month.
SmartSelect is intended to simplify the shortlisting of properties by automatically benchmarking a specific property listing against market data indices and a home-seeker’s unique requirements, expressing that into a single score.
The portal personalises the property search by weighing this score against customisable criteria such as size, price per square foot, location, tenure and age of the property.
The three-step process begins with users setting their preferences on a list of criteria, ranking them in terms of importance.
After that, the search engine automatically compares the properties against URA or HDB data and PropertyGuru listing data, weighing the outcome against the user’s preferences.
A ‘SmartSelect Score’ is then assigned to the property and users are able to see how it ranks versus other selected properties.
According to Ng, about two-thirds of property purchases in Singapore are for personal homes, not investment.
About 32% of property seekers want all available data to dive deep into an analysis of a property, while 66% find the amount of data frustrating to go through and want more digestible information.
The introduction of SmartSelect, according to PropertyGuru, also serves to reinforce on-going awareness efforts with the property industry about the value of a high-quality listing, to weed out the “bad apples” and feed even better quality listing data into the tool.
“This will certainly be something that changes the market,” Ng declared.
Crunching the backend data
Hampel Carl-Eric (pic), PropertyGuru’s head of data business, called the SmartSelect tool an innovation that was unique to the industry.
“We thought it up ourselves and no one else has done this before. As you know and see all the time, the industry is full of people copying other people’s widgets or calculators. It gets a little bit tedious and we didn’t want to go down that path,” he said.
Carl-Eric said that the motivation also came from personal experience, both in hunting for property and the fact that in a prior career path back in Australia, he had built valuation models for banks which help approve mortgage applications quickly.
The most frustrating part of the home-hunting process is the research, where different potential properties have to be individually evaluated and tracked by the home-seeker manually, over a long period.
“The idea behind SmartSelect was that we needed a very simple way of saying ‘What’s important to you?’ What is particularly important in a property you’re looking for, and how do we encode that and have a very simple summary that would enable you to quickly go through multiple properties to rank and prioritise them.
“It’s deceptively simple, but at the backend we have some very complicated algorithms at work,” he claimed.
Asked about the competition launching similar tools, Carl-Eric said that attempts would certainly be made.
“They will see it and think it’s a good idea and will try it, but execution will be tricky. Unless you have scale and reach in the market, the results can come up a little dodgy,” he said.
In giving an overview of SmartSelect, Carl-Eric said that PropertyGuru was uniquely placed as a company to deploy such a tool.
“Well, we’ve got the reach, and the data. PropertyGuru has the ability to do things a lot of the other guys can’t because of its size, and when you have that many listings, you can do a lot with it,” he said.
In building the tool, the team had to create new algorithms which normalise properties based on key variables such as price, size and age of the property – what Carl-Eric described as a “reasonably difficult” process.
In addition, the team created indices down to individual developments, which allow analyses of specific developments and their performance over time versus the general market.
“That means that we can actually determine the value of a property at today’s prices, based on past transactions, even if the market has moved. It is a process that every valuer does in his or her head, taking into account market movements and information about comparative properties.
“With indices what you can do is plug proper valuation methodology into a model and automate that process, which isn’t as easy as it sounds,” he said.
The tool leverages on approximately 30,000 data points sourced from URA, HDB and PropertyGuru listings.
“If you’re going to create information that people can rely on, then it has to be legal data. Singaporeans are savvy and independent consumers who prefer not to listen to property specialists and want to be given the data to come to their own conclusions.
“There are some people cynical about the information we provide because they’ve been burnt in the past, but resistance lowers the moment we tell them that it’s from official government data sources.
“We don’t try to do anything cute with the data, there’s no point to that, but we are able to enhance the analysis with our listing data to fill in some blanks that official data sources don’t provide,” he added.
Property results and scores can be sent to consumers via email or mobile, and the service also offers integration with reputable agents who have at their disposal more sophisticated valuation tools as a follow-up option.
The Singapore anomaly, next steps
SmartSelect is currently only available in Singapore, mainly due to the country’s unique abundance of good quality data about property and volume of transactions, versus other PropertyGuru markets.
“Singapore really is the only market we could have done something like SmartSelect and have it launched and ready for the public. It’s almost like a free kick at goal and is the first in the world,” Carl-Eric said.
It currently does not cover landed properties, but Carl-Eric said this was next in the product pipeline in the company’s game plan for expanding out the set of tools it intends to make available to consumers.
He hinted that the company had “some interesting products” in the works that the team hopes to make available in the coming months.
“The pecking order in terms of product priority is to launch an in-depth analytics platform, work toward an international version of SmartSelect for international residential markets, before looking at the commercial property sector,” he said.
The analytics service was in response to initial consumer feedback where 50% of users requested even more data to delve into.
The reason for the initial focus on residential rather than commercial property, Carl-Eric explained, was because the commercial market behaves very differently from the residential market, which can be viewed as a commodity play versus the earnings focus of commercial investments.
Asked which market in the region the tool is most likely to be launched next, Carl-Eric said Indonesia is the most likely “next port of call” for the company’s rollout strategy.
“However, I must stress that SmartSelect in other markets wouldn’t work the same way in the backend the way it does in Singapore.
“The basic benefits will be similar but is highly dependent on the data. We will need to rework propensities and probabilities about the data to offer something new to our users,” he said.
Asked why Indonesia and not Malaysia was next on the list, Carl-Eric admitted that Malaysia would be an easier market to cater to but said that there was a bigger goal behind the choice.
“We want to build an international version of SmartSelect that would take into account the challenges inherent in less data-rich countries. Essentially, if we can make it work in Indonesia, then Malaysia would be a walk in the park,” he said.
For more information about SmartSelect, click here.
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