Real estate agents losing business as technology takes over
Growth in free property portals has removed the need for middlemen to conduct transactions
Construction cranes are seen on a residential building project. PHOTO: REUTERS
LAHORE:
Inroads made by digital trends into various economic sectors over the years have disrupted decades-old business practices in Pakistan.
This phenomenon is also being lately observed in the real estate sector despite relatively low level of digitalisation till now, which has already cost several brokers their jobs and agencies their businesses.
Real estate is considered a vibrant and lucrative sector for many affluent as well as middle and lower-income groups. Over the years, it has seen money inflows from a variety of investors, both local and overseas, which has resulted in a mushroom growth of real estate agencies and agents due to the low skills required for brokering and sales.
Following chaos, real estate markets largely stay stable
Posting properties for sale or rent on online portals is the only advancement this sector has experienced in its business practices over the past five years.
For several decades, newspaper advertisements have been the main source of knowledge for the buyers and sellers of property, with real estate agents being central to the ultimate deal reached between the two parties.
As a result when online property portals were introduced in Pakistan, realtors were their first customers and purchased packages to post properties online. Their role, however, remains that of middlemen and is quickly becoming redundant with the same portals offering free-of-charge property postings and listings.
“Internet has made the flow of information easier and same is the case for real estate data,” says Estate Heights CEO Mian Bilal Hanif. “Working with these portals has become a necessity for a majority of people before deciding where to invest.”
Hanif, however, said many clients, who previously contacted real estate agencies for transactions, were now feeling comfortable in posting their demands online without the aid of an agency.
“There is an equal ratio of successful and unsuccessful transactions as no one knows who is listing the properties on web, but yes that has affected the lives of real estate agents,” he said.
In Lahore, there is a lack of specific data on how many agencies and agents are working. Different associations claim to possess information which does not reflect the true size of the market or the number of people working in the sector.
Regulation
The new tax regime announced in the budget for 2016-17 has worsened the situation for agencies.
“Trading activities have seen a dip since the imposition of new taxes on the real estate sector,” F-1 Properties CEO Waseem Malik said, adding increased digitisation had already made lives of realtors difficult due to intense competition since the market has turned into a “global village”.
“Now the entire country has turned into a single property market without isolation of any city,” he said. “A broker or agency owner needs to keep a close eye on the opportunities arising in any part of the country from Gwadar to Karachi.”
Real estate markets slow down in budget month
Azeem Siddiqi, a Lahore-based agent, said three years ago the portals were helpful for the agents, but they have now turned into a source of competition.
“Since property data has been shifted to these portals and the portals themselves have started property trading, they pass on the left-over data for us,” he said, adding such issues have snatched market share from the agents and caused considerable unemployment.
The low skill level required for entering the real estate sector means brokers have few other skills to switch to another sector.
Published in The Express Tribune, September 1st, 2017.
Inroads made by digital trends into various economic sectors over the years have disrupted decades-old business practices in Pakistan.
This phenomenon is also being lately observed in the real estate sector despite relatively low level of digitalisation till now, which has already cost several brokers their jobs and agencies their businesses.
Real estate is considered a vibrant and lucrative sector for many affluent as well as middle and lower-income groups. Over the years, it has seen money inflows from a variety of investors, both local and overseas, which has resulted in a mushroom growth of real estate agencies and agents due to the low skills required for brokering and sales.
Following chaos, real estate markets largely stay stable
Posting properties for sale or rent on online portals is the only advancement this sector has experienced in its business practices over the past five years.
For several decades, newspaper advertisements have been the main source of knowledge for the buyers and sellers of property, with real estate agents being central to the ultimate deal reached between the two parties.
As a result when online property portals were introduced in Pakistan, realtors were their first customers and purchased packages to post properties online. Their role, however, remains that of middlemen and is quickly becoming redundant with the same portals offering free-of-charge property postings and listings.
“Internet has made the flow of information easier and same is the case for real estate data,” says Estate Heights CEO Mian Bilal Hanif. “Working with these portals has become a necessity for a majority of people before deciding where to invest.”
Hanif, however, said many clients, who previously contacted real estate agencies for transactions, were now feeling comfortable in posting their demands online without the aid of an agency.
“There is an equal ratio of successful and unsuccessful transactions as no one knows who is listing the properties on web, but yes that has affected the lives of real estate agents,” he said.
In Lahore, there is a lack of specific data on how many agencies and agents are working. Different associations claim to possess information which does not reflect the true size of the market or the number of people working in the sector.
Regulation
The new tax regime announced in the budget for 2016-17 has worsened the situation for agencies.
“Trading activities have seen a dip since the imposition of new taxes on the real estate sector,” F-1 Properties CEO Waseem Malik said, adding increased digitisation had already made lives of realtors difficult due to intense competition since the market has turned into a “global village”.
“Now the entire country has turned into a single property market without isolation of any city,” he said. “A broker or agency owner needs to keep a close eye on the opportunities arising in any part of the country from Gwadar to Karachi.”
Real estate markets slow down in budget month
Azeem Siddiqi, a Lahore-based agent, said three years ago the portals were helpful for the agents, but they have now turned into a source of competition.
“Since property data has been shifted to these portals and the portals themselves have started property trading, they pass on the left-over data for us,” he said, adding such issues have snatched market share from the agents and caused considerable unemployment.
The low skill level required for entering the real estate sector means brokers have few other skills to switch to another sector.
Published in The Express Tribune, September 1st, 2017.