Here, I will share eight key lessons I have learned after my many years in the industry. During that time, I have helped build some of the largest and most dynamic companies in the sector, participated in more than 30 mergers and acquisitions, and worked in diverse markets across China, Southeast Asia, and Australia-New Zealand.

1. Rethink who gets to play the disruptor

Over the past 20 years, 56% of the investment in property technology has been in portals, and portals have been the nexus for most technological innovations in residential real estate.

The next five years-plus will look very different.

I would like to challenge the general assumption that change will come necessarily from portals. You can already sense that portals in most markets are reaching maturity in their core advertising businesses.

Portals have largely accomplished their mission of moving property marketing from print to digital and have done so without significantly reducing the amount spent. This has given them huge margins and immense profitability.

Declining potential for core revenue growth explains why portals are scrambling to tackle ancillary services and get closer to the transaction. For most developed-market agents, real estate portals are no longer the critical source of leads. They are now just one of several.

After bringing advertising online, the next big transition in residential real estate is to bring the transaction online. It is not portals that are in the best position to do this, but agents.

I know this may surprise you. Agents have been worried for years about being disrupted right out of existence by portals but a good agent using advanced digital tools is generally in a better starting position to bring the transaction online than a portal.

Each market will find its own solution, but the ultimate fulfilment of the potential would be an end-to-end platform or ecosystem for agents and consumers. Think of a real estate version of UBER.

2. Evolve to fit your market

Every market is different, and successful companies must tune themselves to local market conditions.

The market for new property is different from the market for established or secondhand property. The new property market is business-to-consumer and characterised by high volume per client. A single developer may be marketing a single project with hundreds or thousands of new residential units at a time.

On the other hand, the established property market is low volume and focused on maximising prices in individual transactions. It has a consumer to business (the agent) to consumer model.

The rental market is completely different again.

What characterises the market you hope to serve? How will you adapt your business to its specific characteristics?

3. Make allowances for country differences

The uniqueness of individual national markets is well known within the industry. Proptech businesses that dominate their own country markets often give up any hope of replicating their model overseas.

When a proptech does wish to expand internationally, like the REA Group, it tends to purchase or partner with promising local businesses that have evolved to fit the local conditions, rather than trying to import its own way of doing things.

Social media, search engines, and even e-commerce companies have an easier time going international than digital companies in real estate. Few proptech business models are easily copied and pasted from one country to another.

Some countries, such as the United States, are predominately established housing markets. In September, only 800,000 new homes were sold in the United States. That compares to 6.29 million existing-home sales.

Other countries' real estate markets are overwhelmingly tilted towards new housing. China is an example. In Japan, more than four out of five homes sold are newly built.

The existing proptech ecosystem also varies widely from country to country. In more developed markets, new companies can build on and link to the infrastructure created by other businesses. On the other hand, proptechs in emerging markets must often create essential services and technologies before building more advanced offerings.

The digital business you can build in the USA —where there is an infrastructure of MLSs, CRMs, portals, marketing tech, etc.— is very different from what you can build in most Southeast Asian countries, where very little of that infrastructure exists.

In most lower or middle-income countries, mobile is much more important than in Europe or the USA. Mobile and online payments penetration is high, but computer ownership is low. This makes the mobile experience paramount to your success.

4. Get close to the money

Get close to the money and seek to integrate payments if you can. Doing so will reduce friction and increase the stickiness of your products and services.

Integrated payments improve payment data security and the user experience as well as giving you a much clearer indication of your business's key revenue drivers.

5. Define the consumer and customer

Because of the multiplicity of actors in property markets, some digital companies get confused about just who their ultimate customer is.

In new property, the developer is your real customer, not the intermediary of a property marketing agency.

In existing or second-hand real estate, the consumer (either on the sell or the buy side) is the ultimate customer. Not the intermediary agent.

And in rental real estate, it is the landlord rather than the intermediary property manager.
Structure your offering appropriately and make sure your incentives are targeting the correct party.

6. Define your margins and metrics

It is essential to identify the key metrics by which you measure your success and to define them carefully. This allows for the appropriate allocation of resources.

Clearly defined metrics also prevent confusion and misrepresentations from developing internally. When your team members have to report on their performance, human nature makes them likely to seize on any latitude to present their performance in the most optimistic manner possible.

For example, if your key metric is leads, but you don't define the leads carefully, you may see staff reporting a steady and welcoming increase in this metric without seeing the expected corresponding growth in revenue.

In most cases today, I think MAU (monthly active users) is the better measure than monthly unique visitors or related website metrics. If your business generates most of its enquiry from social media, for example, then your web traffic metrics are incomplete and insufficient.

Let me leave you with a couple of questions to provoke thought. Should a real estate portal count as its own the traffic it generates via SEM from Google?

And what about the traffic a real estate portal generates on the listings provided by an agent? Should that be counted as the portal's traffic or as the agent's?

7. Remove roadblocks for your users

The key to success is providing real value by removing roadblocks that hinder your users.

For example, when it comes to mortgage financing, provide a solution that pre-approves the property or buyer. This is a far superior solution for your users compared to referring leads to third-party financial services providers. It also provides much better results for your business.

8. Hire the right leaders

The importance of having the right team has been emphasised to the point of nausea, but most leaders still regularly make the wrong choices.

Everyone understands that the team is essential, but the knowledge of what characteristics makes good team members is not as widely held.

Experience as a middle manager in a large technology company, even a very impressive large technology company such as Microsoft, is not necessarily the suitable qualification for a fast-growing digital business in real estate.

Rather than hiring candidates with impressive names on their LinkedIn profiles, look for someone with the inherent outlook of an entrepreneur. This is fundamentally more important when you want that individual to help you drive change in your industry.

We have based our $90 trillion estimate on the piecing together of Asia-wide numbers from more fragmented data looking at smaller jurisdictions. Asia accounts for some 45% of worldwide residential property value despite average purchase prices that are on the whole lower than in Europe or North America. 

Cross-Border Transactions

While calculating the total value of Asian residential real estate assets, we also tried to make a reasonable estimate of cross-border residential real estate transactions. Unfortunately, cross-border transactions are more difficult to measure. No useful data exists, except in the case of mainland China. 

Juwai IQI's best estimate is that Chinese buyers alone acquired some US$202.8 billion of overseas residential real estate in the years 2015 to 2020. By logical extension, scaling this up to account for acquisitions originating in every Asian country (and not just China) would result in a considerably higher total.

At Juwai IQI, we take all of Asia to be our home market. That means we are trying to serve a region with a population of about 4.5 billion. To enable us to scale, we have had to put technology at the centre of everything we do.

Economic Rebound in Asia

Asian residential property has weathered the pandemic with surprising resilience. In part, this reflects the pandemic-driven change in homeowner preferences, which has created new demand. 

As in parts of Europe and North America, many Asian consumers are shifting from smaller residences in more central locations to more peripheral areas that offer the benefits of space and a better quality of life. High savings rates, a cultural affinity for real estate investment, and persistent undersupply problems have also supported the residential market.

The recently signed Regional Comprehensive Economic Partnership ("RCEP") is another factor in the positive outlook for Asian residential real estate. As the pact comes into force, it will also drive new investment in residential property.

RCEP is one reason we believe the ASEAN nations will be among those seeing the most rapid recovery of cross border real estate investment through 2022. Although the pact does not regulate property investment, its spillover benefits will boost the real estate sector.

Independent research suggests RCEP will raise global incomes by an annual US$186 billion, expand member trade by US$428 billion, and lead to its member nations generating half the world's global economic output by 2030.

Asia's wealth-creation machines have already begun to bounce back from their early-2020 doldrums. While the pandemic is far from beaten, it no longer has the paralysing effect it once did.

The pandemic has also produced some clear winners. The population of the Asian super-rich is multiplying and the Asia-Pacific region has the world's largest population of ultra-high net worth individuals accounting for 38% of the world’s ultra-high net worth individuals. By contrast, the Americas hold 35%, while 27% are in Europe, the Middle East and Africa.

Impact of COVID-19

Why didn't COVID-19 have a more significant impact on Asian cross-border residential investment? One factor that tempered the losses was the rapid implementation of technology. The industry compressed ten years of innovation into just six months.

As a result, both local and cross-border buyers found it possible and even easy to purchase overseas, including during the most restrictive lockdowns. Companies like Juwai IQI successfully deployed technology to enable buyers to research, inspect, negotiate for, purchase, and manage overseas properties — entirely online.

Data from Asia's largest economy supports the conclusion that investment fell much less than expected in 2020. China's Ministry of Commerce and State Administration of Foreign Exchange reported outbound all-sector direct investment was down by just 3% in 2020. That is minimal, given the seizures that paralysed the global economy last year.

Economic Situation in China

Because of China's role as the keystone economy for the region, its rapid emergence from the pandemic is a good sign for future Asian residential market growth.

Nomura bank's latest data shows that in 2020, the U.S. GDP fell by 2.3% while China's grew by 2.3%. That means China may now overtake the U.S. as the world's largest economy as early as 2026.

Other analysts report that Chinese consumer spending will likely more than double in 10 years, hitting $12.7 trillion by 2030. That's about the same amount that American consumers currently spend and more than double the $5.6 trillion Chinese consumers spent in 2019.

That's one reason why the South China Morning Post dedicated a long article this week to the special promotions developers around the world are using to attract Chinese and other international buyers during the Chinese New Year holiday, which begins on the 12th of February.

Luxury real estate agent Jamie Mi told the Post that her team recently sold several top-end homes in Melbourne, Australia to international buyers whose key family members are still overseas. 

Her agency, Kay & Burton, is celebrating the Year of the Ox by offering its personalised concierge service to all potential international buyers who make an inquiry from 12 February to 14 March.

"To make a decision is not always easy," said Mi, who is partner and head of International Division at Kay & Burton. "We can organise a chauffeur service, personal interior stylists or lawyers to help them with home purchases."

For centuries, economists, statisticians, and analysts have relied on official data to help them predict market trends.

Reliance on official data goes back at least as far as William the Conqueror, of England. His 11th-century Domesday Book was a comprehensive inventory of land and landholders --and thus of taxes owed-- across most of England.

The drawback of official data is that by the time you have it in your hands, it is already nearly out of date. William's Domesday book took the better part of a year to compile. 

Today, society has advanced in many ways. One thing that has not improved tremendously is the timely release of official data. 

Australia's Foreign Investment Review Board ("FIRB") is a good example. The FIRB issues annual reports on the foreign investment it has approved and denied. Yet, these reports generally are not published until nearly a year after the end of the covered period. The 2018-19 report, for example, was not released in the second half of 2019. Nor did it see the light of day in January or February of 2020. The FIRB's 2018-19 report was finally published just one month before the end of the following financial year, in May 2020. 

Australia's FIRB is not exceptional in its tardy release of official data. What is notable is that today we finally have an alternative source of data from an economic player that is timely, comprehensive, and precise. That new source of data is real estate portals.

The first property portals were nothing more than online equivalents of the old print ads that helped fund decades of newspaper profits. Today, though, portals have transformed into critical pieces of infrastructure for property markets that bring together agents, developers, and consumers in a mutually beneficial web of services and transactions.

Because portals are digital, all of the activity they enable can be tracked, anonymized, and aggregated. I believe that makes real estate portals today’s most significant sources of data and insight on property markets. More than government bodies, more than the largest real estate agency networks, and more than third-party market researchers, real estate portals have become the true authorities on the real estate markets in which they operate.

Nor is it just real estate. What analysis of the automobile market would be complete without the latest data from online new and second-hand auto sites? And economic analysis is frequently buttressed with the latest job-ad data showing both employer and employee demand.

At Juwai IQI, we have embraced this new role as sources of authoritative data about the property market. Our data is cited in news reports and requested by government agencies and financial institutions around the world. Bloomberg, the Wall Street Journal, the Financial Times, Yicai, and Caixin, are just a handful of the prestigious global media outlets where you can see our data reported.

But Juwai IQI is not alone. Zillow and Redfin in the USA, Rightmove in the UK, Fang in China...portals all over the world are doing similar things. The real estate industry no longer has to wait for official government or institutional data. Instead, portals are using their live, real-time data to track and report on market trends. Who benefits from these deeper and timelier insights? The list of beneficiaries includes investors, industry, policymakers, and consumers.

As U.K. market leader Rightmove puts it, portals offer "the most complete market picture, with millions of data points added monthly." Rightmove has begun to use its data to provide valuation and surveying tools to lenders, housebuilders, and surveyors. The data that portals can provide is both market-wide and hyper-local since nearly every acquisition or sale today takes place at least partially online. 

Zillow, in the U.S., famously got its start in 2006 as the first real estate listings website to incorporate valuation data. These so-called "Zestimates" allow anyone to see what their home might be worth.

Today, Zillow has turned its scale into more powerful data products. Its Zillow Home Value Index is a measure of the typical home value in a given region and housing type. Zillow also offers an Observed Rent Index, as well as for-sale inventory, newly pending listings, mean and median days to pending, median list price, median sale price and share of listings with a price cut.

Southern European property portal idealista was just acquired by EQT for EUR 1.3 billion (US$1.54 billion). Surely, idealista's massive and ever-growing cache of data played some part in that impressive valuation. The company promises its data can help investors and industry players to reduce risk, manage their portfolios, and evaluate new opportunities.

This article provides just a small sample to demonstrate how portals have become the new authorities on real estate markets. Their data has great value for the marketplace, but the portals who claim this role also benefit.

The portals' data can help guide their own business decisions in such areas as product design and strategy. For those portals that wish to launch new business models, such as Zillow’s move into ibuying, having a proprietary source of market data provides a competitive advantage. This data is also a marketer’s dream, providing tangible and useful news that can create headlines in the top media.

Portals have to remember that they do not exist in a vacuum. Today, many consumers have a heightened sensitivity to privacy. Portals are wise to remember they operate only with the permission and cooperation of the real estate industry and consumers. By providing useful data to the marketplace, portals have discovered another way to serve their stakeholders and cement their role as a critical intermediary in the property market.