Despite the PropTech development in the Southeast Asian countries lag their more developed counterparts, they are catching up fast and even have an opportunity to surpass European and American regions which has entered the PropTech 3.0 era.
Although the Southeast Asian countries have high population density, they have a young labor force, and the demand for housing is also increasing. In addition, the new generation of Gen Z is open to smart technology and even take it for granted, hence, many PropTech companies enjoy a large demand in Southeast Asia.
The competition in the Southeast Asian countries is fierce, and they generally have an open attitude to foreign investment. Therefore, many foreign investors are attached to invest in local housing markets and PropTech start-ups. Among them, countries with large populations such as Vietnam and Indonesia are more popular due to their large market size and scalability.
In Vietnam, the local market already has a population of nearly 100 million. The gross domestic product (GDP) of the Southeast Asian countries has been rising steadily in the past five years. However, after 2020, the countries have been deeply affected by COVID. Nevertheless, Vietnam’s GDP has risen by nearly 3%. This breakout performance has encouraged more investors and PropTech companies to invest and expand in Vietnam.
As the demand for foreign investment in real estate increases, so do the development opportunities for Vietnam’s real estate internet platforms. Homebase, a real estate financial technology company, has successfully raised US $30 million in late 2021. Michael Seibel, CEO of Y combinator, a well-known technology incubator in the United States, and several executives from technology-related companies, such as Opendoor and Microsoft, also participated in Homebase in their personal capacities. In addition, Propzy, Citics, A.Plus Home, Houze and other Vietnamese PropTech companies have successfully raised funds in recent years.
With SoftBank-backed Propzy previously dissolved the Vietnamese company to restructure the business model, Propzy plans to re-hire nearly 100% of its staff in the coming months, hoping to reduce exposure to its direct agency business and develop new growth areas. At present, there are about 140 PropTech start-up companies in Vietnam.
Coupled with the rising value of real estate, the influx of foreign capital, and the high acceptance of new technologies by the young people, PropTech in Vietnam has experienced rapid growth.
The development of PropTech in the Southeast Asia can be described as a latecomer who hits first. Countries in the Southeast Asia are committed to the development of smart cities, and the real estate market has begun to transform and integrate the technology. The market size is simply too huge to ignore.