The COVID-19 pandemic has proven to be the crucible for businesses In Singapore. With restrictions during the start of the Circuit Breaker on the 7th of April, non-essential businesses were given a choice between shifting their processes online and implementing WFH measures, or to suspend operations indefinitely while we found our footing in the fight with the virus. Fast forward and the 19th of June marked the transition into phase 2. Though the restrictions have somewhat eased, the last few months have been a taste of the “new normal”.
This period has affected Singapore’s residential property landscape significantly. Earlier in April, the Urban Redevelopment Authority (URA) revealed flash data that initially cited a 1.2 per cent drop in the prices of private residential properties in the first three months of 2020 in comparison with 2019, this estimate was given an optimistic outlook, being adjusted up to 1 per cent later in the month. This is a small consolation for the final tally for Q1 2020, as private home sales fell by 12%, and HDB resale transactions saw a 7% drop.
This effect is compounded by shifts in the office rental market, with WFH measures potentially being extended to the later part of the year, companies relocating from the CBD and spacing themselves through other areas, creating greater opportunities for residential spaces to take over.
Industry 4.0 for real estate
Kicking the inevitable digital migration into high gear, the foundation laid earlier by industry 4.0 has played a huge role in getting the global population to be receptive in wholly digitally interactions and transactions across industries. This becomes a challenge for property rentals, where significantly greater financial commitments have resulted in the need for physical touch points as assurance.
Through the years however, we have seen a growing acceptance as online transactions for property have inched their way forward. Our comfort zone has moved from nightly transactions from hotels (Agoda and Booking.com), to private homeowners (Airbnb). The Airbnb model has also extended itself from weekly getaways, to monthly engagements.
It is the logical next step that longer online rental engagements that span into years. However, adding longer time commitments would result in the need for more physical touchpoints for assurance. Issues such as rental laws, stringent KYC measures, and detailed clauses covering all parties come into play. We do feel however, that trust and transparency supplemented with intuitive tech can cover those assurances, making the complete digital migration of the long term rental experience possible.
The evolving rental market
We already search for rental properties and browse through listings on sites. With long term rental however, landlords and agents need to understand that more sophisticated search parameters are needed.
Availability via a calendar detailing tiered prices pegged to time frames for the lease – both which are negotiable, would be a starting point. The degree of furnish, and restrictions such as pets, and the limits of refurbishment allowed have to be clear.
Tenants planning for the long term need greater details such as floor plans that share where power outlets are located, ceiling height, where the property faces, and the availability of parking lots are major considerations. The information needs to extend beyond the property to amenities, the options for public transport, and the time and availability of eateries, schools, and supermarkets.
These parameters give a transparent outlook of the property and saves time by offering better quality of queries who are on the same page.
When it comes to inspections, being in the physical space is crucial for many. With phase one of the Circuit Breaker, however, we have seen developers leverage on virtual tours, finding a degree of success. Moving forward, tenants will expect agents and landlords to push the envelope of digital engagements through 3D, AR, and VR. Live video walkthroughs will add to the credibility in the offline to online migration.
Real-time portrayals will verify the accuracy of the listing, letting tenants experience the property as close to being “on the ground” as possible. Taking into account the vibe of the neighbourhood, and a sense of the immediate surroundings, the intangible benefits and inherent charm of a property in context of the location can be further presented.
The documents that precede and lead up to finalising the deal have to be transparent, and secure.
Minimally there should be digital contracts along with digital LOIs. Opening up the accessibility through multiple payment options that range from credit cards, direct debit, and legitimate online payment solutions have to be matched with flexible payment terms. This affords the convenience and ease of rent and security deposits.
The pandemic has given pause to the “business as usual” approach in the property rental industry. Leveling the playing field for the relationship dynamics for what has been for the longest time, a landlord biased one. With transparency and better digital tools, we believe the expectations for the property rental experience is one where a level playing field is presented for both landlords and tenants, and this is a progression in the right direction the industry sorely needs.
This post was contributed by Michael Hogg, CEO and Co-Founder of Flat Monthly.
Michael Hogg is the CEO and Co-founder of Flat Monthly, his experience working in real estate has given him the perspectives and pain points that landlords, agents, and tenants face. Armed with this knowledge, Flat Monthly aims to make the online property rental journey a fully digital and touchless process, making online property rental fun and comprehensive for everyone involved.