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A transformation map for the industry

Over the next few months, the Ministry of National Development (MND) will be bringing together various stakeholders to collectively develop the Real Estate Industry Transformation Map (ITM).

The aim of the ITM to create a resilient and future-ready real estate sector that will continue to provide good jobs for Singaporeans.

Dr Koh Poh Koon, Minister of State for National Development and Trade and Industry, made this announcement during the MND’s Committee of Supply debate on 7 March 2017. He explained that challenges posed by digital disruption is an impetus for the industry to reinvent itself.

Today, the ease of access to online property platforms and property-related information have led to changing consumers’ preferences and expectations.

Sophisticated online platforms in other countries enable consumers to conduct property transactions themselves, and offer value-added services like online property viewing and e-conveyancing.

Closer to home, home hunters and sellers plus landlords and tenants are able to connect directly through a number of DIY portals and handle the transactions on their own without the need for property agents.

In fact, a 2015 survey by the Council for Estate Agencies showed that while close to eight in 10 consumers were satisfied with the services provided by their property agents, the proportion who were undecided if they would engage an agent in future increased to 31 per cent from 24 per cent in 2012.

“To survive and thrive, the industry must consider new ways of doing things,” said Dr Koh. To this end, MND will bring together property developers, property agencies, conveyancing and valuation firms, to collectively effect change across the real estate value chain through the ITM.

The ITM will involve three broad thrusts:

  • Raising productivity and streamlining processes;
  • Helping businesses scale-up and take advantage of new growth areas, and supporting them in expanding to overseas markets; and
  • Equipping workers with the right skills

Boosting productivity

To help real estate companies maintain their competitive edge, Dr Koh said that the real estate ITM will explore ways to help businesses maximise the potential of their workers and raise productivity. Government agencies will look into streamlining processes to make the sector more productive so as to provide greater convenience and more positive experiences for consumers.

For public housing transactions, HDB is already reviewing its resale transactions processes with the aim of significantly reducing total transaction time. For instance, it could be possible to do away with one of the HDB’s resale appointments through technology. Dr Koh also said that the ITM will explore how rental and private property transactions can be streamlined.

Seizing new opportunities for growth

Working with the industry to identify new growth areas to scale up, plus supporting their efforts to deepen their expertise, develop competitive niches, and enter overseas markets was the next priority highlighted by Dr Koh.

“With scale, companies can leverage greater economies of scale, increase their value proposition, and better respond to market disruptions,” Dr Koh explained.

One such example is home-grown company LHN Group. The company originally focused on space optimisation services, and has since ventured into facilities management and shared services. With support from SPRING and IE Singapore, the company has expanded into China to manage mixed-use developments.

Equipping workers with the right skills

The third thrust is to ensure that workers are equipped with the right skills to take on new roles. Dr Koh said that the ITM will take a collaborative approach to work with stakeholders to ensure that there are training opportunities to help workers upskill and refresh these skills throughout their careers.

“As we work with the sector to raise productivity and pursue new areas of growth, there will be new ways of doing things and new jobs created. For example, with more information and services being online, it may be more important for property agents to hone their skills in servicing clients and building up their credentials rather than just competing on marketing and closing transactions,” said Dr Koh.

Acknowledging that a major transformation of the industry “will not be easy”, Dr Koh stressed the need for the journey to begin now.

Quoting Reed Hasting, CEO of Netflix, he said, “Companies rarely die from moving too fast, and they frequently die from moving too slowly.”

The real estate ITM is one of 23 ITMs being developed under the Industry Transformation Programme. Companies and businesses, industry associations, workers, and unions will be involved in drawing up the ITM.

The Committee on the Future Economy in its report released in February 2017 highlighted the development of ITMs as one key strategy to position Singapore's economy for the future. Together, the 23 roadmaps will cover about 80 per cent of the economy by the end of the year.

Selected graphics created by Freepik