Published: 25 Mar 2019 in The Edge Financial Daily
KUALA LUMPUR: Singapore-based Ohmyhome Pte Ltd (OMH) is looking to expand into Malaysia, as the proptech start-up looks to test the waters in a bigger market before continuing to grow its footprint in the region. Proptech is a collective term describing technological innovations set to disrupt the real estate market.
OMH chief executive officer and co-founder Rhonda Wong told The Edge Financial Daily that the company will kick off operations in Malaysia, starting with the Klang Valley, in mid-2019.
Launched in September 2016, OMH operates a one-stop platform aiming to simplify property transactions, allowing do-it-yourself (DIY) transactions at no charge to the buyer or seller.
Users can also engage an agent – the company has full-time ones – to assist in their buying or selling and pay only for the services required. Access the platform via an app or the website www.omh.sg.
“We have been planning to expand into Malaysia since when we started because it is a much larger market compared with Singapore. Our playbook will be made by our expansion into Malaysia,” she said.
To date, OMH has facilitated over 2,500 transactions in Singapore, with about 50,000 active users monthly.
To keep its platform up to date, the company removes listings by users that have not accessed the platform within a month, unlike many other platforms which include unavailable properties and dummy listings.
However, Wong said the property market in each country has different pain points, therefore the company will take a different approach for the Malaysian market.
For example, she said the major pain point for buyers and sellers in Singapore centres on the agency costs involved, typically about 2% to 5% of the property’s value. However, OMH charges a fixed agency fee of S$1,888 (RM5,627) for buyers and S$2,888 for sellers in Singapore.
“In Singapore, the largest pain point is price. The purchasers and sellers find the agents are charging too much. So when we came up with OMH, it was really about offering a price point that people could afford.”
Meanwhile, she said the company will not be able to offer flat rates in Malaysia. Instead, it will charge commissions of 2% to 3% when users opt for an agent, in line with the market rate. However, if the user prefers a DIY transaction, it will still be free.
Wong said transaction fees are not a pain point in Malaysia. Instead, OMH is looking to address the issue of trust in the market.
“Developers don’t trust agents, and customers definitely don’t trust agents. We’ve heard enough horror stories of owners passing the keys to agents and the units turned into a mess or illegal immigrants have moved in.
“The pain point is really just about trust and not really the price or speed of transactions. This is where our agents come in. They are full-time professionals employed by our company and they don’t function like a freelance agent.”
For example, if a person is looking to sell a property, OMH will assess the seller’s needs and details of the property, and match the seller with an agent specialising in the type and location of the property.
Thereafter, the company will handle all advertising of the property, including on platforms such as iProperty and PropertyGuru.
OMH also provides other services by working with firms providing renovation, feng shui, home staging, mortgage broking and lawyer conveyancing services. OMH gets a portion of its revenue from these service providers in the form of advertising fees, besides generating income from data analysis services.
“We are not in the advertising business, so we don’t just let any company advertise on our platform. We have a process in place to assess these service providers and if they do not pass our assessment, we will not recommend them to users,” said Wong.
The company is targeting 1,000 listings in the first month of its launch in Malaysia, and 100 transactions in the first three months.
Wong said the company will focus firstly on the Klang Valley, constantly tweaking its model to better fit the market, but added that it could expand into Johor next after noting the oversupply issue in the state.
On whether the subdued property market in Malaysia would be a challenge to OMH, she said the company is not too concerned about it, pointing out OMH commenced operations in Singapore during a slow period after the government imposed cooling measures. Currently, the company is facilitating transactions of between 100 and 200 units per month in Singapore.
“The Klang Valley has 10 times the transaction value of Singapore despite the supposed slow market, so it’s actually not that bad. We don’t see it as a bad market at all; it’s still very active.
“Not all unit types are seeing transactions but the volume in the Klang Valley is still huge, and it’s 10 times bigger than what we are used to managing.”