BANGKOK -- The Thailand real estate market has a sort of Wild West feel to it.
There are no appraisal standards, and self-proclaimed real estate agents fall short of being trustworthy. At the same time, property sales platforms neglect screening out fake listings. This is to keep the buyers hooked. Even the government is unable to track the transactions.
Frustrated by the unstructured market, Natthapon Asswisessiwakul, a former property consultant at CBRE, decided to establish a real estate platform some years ago that offers accurate property information and helps connect sellers directly with buyers to reduce inefficiency in the market.
ZmyHome CEO Natthapon Asswisessiwakul (second in first row) poses with his team members. (ZmyHome)
“The market structure for people to sell properties in Thailand is very poor,” Asswisessiwakul in an interview with The Investor, pointing out the lack of reliable data.
“With no professionals, no transaction data, and no reliable platform to know the market, it is extremely hard to sell properties here,” he added.
Such scarcity of data and experts became a driving force for him to kick-start this own business. He launched the ZmyHome real estate platform in 2015 and established a company under the same name two years later. The seed money for his business came partly from the profits he made after selling some of his own properties.
On the platform, individuals or corporate customers can sell their properties directly to buyers. Since there is no middleman, both sellers and buyers are not charged any commission fees. The startup instead runs a subscription scheme through which it provides sellers with market data, such as the latest transactions of properties in the neighborhood and potential buyers.
The data, which is sent via mobile messenger Line, helps sellers set proper market prices for their properties and check the current market demand. Sellers can also promote their listings on the platform by paying extra.
“In the traditional way, it can take over a year to sell a property, and even 10 years in some extreme cases,” said the CEO, adding that he wants to decrease the average time spent in selling properties down to three months, which he says is usual in most developed countries, like the US.
“I wish to have all the houses in Thailand listed on our platform,” he said.
Despite the immaturity of the market, Thai properties are one of the most coveted assets among foreign investors, including those from mainland China, Hong Kong, Japan and the U.S.
Chinese investors, in particular, spent some $1.25 billion to purchase real estate in 2018, according to the Bank of Thailand. One of the main appeals is that no tax is imposed on foreign buyers.
But the lack of information is also a stumbling block for foreign investors who want to enter the market, according to the CEO.
Touching upon market regulations, he praised the government’s tightened loan-to-value rules implemented last month to curb increasing debts.
The new LTV rules require second- and third-home buyers to make a down payment of 20 percent and 30 percent of the home price, respectively.
“Although there are some complaints from property developers, I think it is the right way,” said Asswisessiwakul, emphasizing the importance of healthy market conditions. “Otherwise, there will be a lot of speculation.”
The household debt ratio in Thailand, which stood at 78 percent of the nation’s gross domestic product as of end-September 2018, increased to 78.2 percent by end-December, according to a news report by local newspaper Bangkok Post.
The news media claimed that the rising household debt, driven mainly by auto and mortgage loans, could hurt the nation’s financial stability.
The 2-year-old Thai startup, which has successfully raised $400,000 in a seed round, is currently raising a Series A fund and participating in Line’s ScaleUp post-accelerator program.
The company aims to achieve five-times growth in terms of sales from the previous year.
The Thai entrepreneur, who majored in architecture, got into the real estate market right after the financial crisis in 2007 instead of becoming an architect.
The CEO said he is not considering exiting since he believes ZmyHome has a great opportunity to grow into a bigger property technology company like those in developed nations, like Zillow in the US and Zikbang in South Korea.
By Kim Young-won (firstname.lastname@example.org)
This article is the result of collaboration between the Korea Herald and Antara, sponsored by the Korea Press Foundation.