A new website makes it easier to find a place to live in Hong Kong
We recently came across a startup whose mission touches practically everyone in Hong Kong. It's an online property advertising platform called spacious.hk. Nothing remarkable in that you might think, but this site aims to shake up the residential online market by radically improving the experience for buyers and renters. "You only need to compare websites in Europe and the United States with what's available here to see how poor the situation is here and elsewhere in Asia," says co-founder Asif Ghafoor, a 34-year-old from Britain.
The problem as he sees it is that in Hong Kong and elsewhere in Asia the market is dominated by agents incentivised to get the highest price possible to boost commissions. Their main interest is to get as many leads as possible to show off their properties. "This has resulted in a culture of trying to bait people," Ghafoor says. "On most property websites here, as many as one in three of the listings will be fake." People that inquire will find that the property has been sold or let, but the salesman says he has plenty of other properties he can show. This frequently results in a waste of time and frustration.
Since the websites are being paid by the agents to list properties, they have no incentive to remove the fakes. Ghafoor says that during the firm's market research, "we uncovered a big pain point here for renters and buyers". Spacious does not charge for listings and will enable users to mark properties as spam, and if enough people do so, they will be taken down, resulting in a black mark for the agent.
Ghafoor believes that by attracting large numbers of renters and buyers to the Spacious platform, agents will get what they need i.e. a large number of leads, and so obviate the need for fake listings. With an eye on sites such as Zoopla in Britain, Ghafoor says the team focused on making Spacious a world-class easy-to-use site.
Both Ghafoor and co-founder David Beatty come from property-owning families in London and Australia. They have funded the site themselves with assistance from the Hong Kong Science Park incubation programme.
The two software developers met while working at Goldman Sachs. They drew on their experience in the finance industry to develop their own pricing algorithm, which works on historical prices and current listings and enables them to indicate how much the asking price is over or undervalued.
Using techniques they used to value over-the-counter products in the finance industry, they have come up with a model that gives what they think is a fair value for the property. This gives renters or buyers better information when negotiating with landlords or sellers. It improves the transparency of the market in that they can corroborate independently to some extent the information given to them by agents.
Another feature of the site will be to provide a neighbourhood guide to give people a sense of what it might be like to live in a particular area.
As to how Spacious makes money without charging for listings or taking commissions on completed transactions, Ghafoor admits the model has not been finalised yet. He says that in the four months the site has been live, they have been concentrating on attracting traffic to the site rather than on making money. The hope is to monetise the traffic by charging agents a fee for "premium" listings, so they feature prominently in searches. They also hope to attract revenue from property developers advertising their sites. There are also plans for a package of tools for agents that, for a monthly subscription, would enable them to see which of their sites were attracting the most attention and so on.
The site has been operational since August and for the first three months was being revised two or three times a day based on feedback and fixing bugs. But now that this work has stabilised, there are plans to build it out. A month ago, it added a Chinese-language version. So far it's been growing at about 20 per cent week on week and currently attracts about 3,000 unique visitors a week. "Our aim is to attract millions a month - across Asia," Ghafoor says. The aim is to extend coverage to other Asian markets, such as Singapore and Bangkok. It was reported recently that about 90 per cent of property transactions started online. "I don't think that's the case in Hong Kong or Asia at present, but we don't see why it can't be like that here, too."
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