02 March 2015 – The Hong Kong government recently released a new round of mortgage-tightening measures, claiming an overheated property market requires further cooling measures; yet no solutions were suggested in the 2015-16 budget to directly suppress the soaring property prices.
i-Cable news interviewed Joshua Han Miller, CEO of OKAY.com and Peter Churchouse, a renowned veteran property market analyst, about their views on current market trends and OKAY.com’s as a potential disruptor to the real estate agency industry.
Hongkongers are generally concerned about the looming threat of a housing bubble burst caused by multiple mortgages, while Peter holds a contrary opinion: “The property companies in Hong Kong are the most lowly-leveraged property companies in the world,” he commented, “we [Hong Kong] don’t have a major risk of a blow-up caused by too much debt.”
Peter also invested in OKAY.com, an online real estate agency that is seeking to address major inefficiencies with existing real estate agencies.
Peter shared with i-Cable that he was initially skeptical about the online real estate business. “My immediate reaction was, why do I want to get involved in the real estate agency business? If you are a person trying to buy real estate, it’s a nightmare. You have to deal with dozens of different agents.” However, after learning how OKAY.com eliminates those inefficiencies and the root causes of the problems consumers face, Peter subsequently invested in OKAY.com and is an Advisor to the Board.
Joshua went on to explain how OKAY.com differs from traditional retail-store agencies and other online agencies. “A large agency will often have multiple branches all very close to each other, and they are all competing against each other.” He added that the business model of traditional agencies involves severe competition among agents, where each of them will try to direct buyers to the districts they work, in order to secure a profitable deal. Buyers would normally have to approach multiple agencies before finding their ideal home. OKAY.com solves this conflict of interest by giving its agents the information and incentives to help advise equally across different properties and districts, and not try to “sell” clients on specific listings.
When buyers currently turn to online property listing websites, they face a different problem. The information posted online is still highly inaccurate, with almost no accountability for agencies to maintain accurate listings on their website. Joshua pointed out that the lack of transparency discourages home seekers from trusting most online sources.
“When [home seekers] enquire [online] about a listing, that property is often not actually on the market”, since many agencies use old listings to attract their clients. OKAY.com’s business model addresses this problem as well by automatically removing stale listings from its website and by providing its agents with substantial bonuses for maintaining an accurate database; incentives not found elsewhere in the industry. OKAY.com’s mobile platform also allows agents to respond more quickly as properties change in the market, enabling them to out-compete other agents and get new listings to their clients faster.
Last year, OKAY.com attained more than 80% revenue growth. Joshua believed that buying and selling with online agencies is more efficient than the traditional process. But the biggest obstacle for the business is gaining the trust from clients. He hopes that the government can enforce more effective measures to regulate the industry’s current practices.
Interested to know more? Watch the full interview here (starting from 04:35).