Millennials and Gen Z, the generations born between the early 1980s and the early 2010s, are the world’s largest consumer cohort. According to McKinsey, they will each account for 25 per cent of Asia’s population by 2025.
As young consumers enter the workforce and begin renting and buying homes, property technology (proptech) developers will listen to their preferences and create solutions for them that will fundamentally change the real estate industry in Asia Pacific and beyond.
These tech-savvy generations have different preferences for their homes and office spaces than their predecessors. In general, they place more emphasis on affordability and flexibility. They are motivated by a desire for sustainability and wellness, and they expect the convenience of financial technology (fintech) and smart home solutions.
To connect with the millennial and GenZ generations, real estate developers, architects, and property managers in the booming Guangdong-Hong Kong-Macao Greater Bay Area (GBA) are increasingly embracing innovative proptech solutions. This is creating a wealth of opportunities for startups in this exciting space.
The digitalisation of real estate
Young people are driving demand for co-working spaces and shared short-term rental accommodation in the GBA. Booking, onboarding, calculating shared expenses, and invoicing can all be online through automation, bringing transparency and flexibility to tenants and property owners alike.
Hong Kong’s home rental market is also booming, fuelled by overseas tertiary students and an influx of young professionals under various talent schemes.
Serving these markets, several new online real estate platforms are leveraging AI to match tenants with properties and provide augmented reality virtual tours. Property managers are also using digital platforms to foster a sense of community for tenants by enabling them to connect and access facilities like video conferencing rooms and gyms, as well as dry cleaning and other services.
The rise in pet ownership among young, well-educated, high-income earners in Hong Kong and mainland China adds another dimension for property managers to consider. Using online tools to screen tenants’ pets and create digital pet profiles with references can help properties enact and manage responsible pet policies and attract desirable tenants.
Proptech innovations are reshaping lifestyles
There is a fundamental shift towards more eco-friendly and hassle-free lifestyles for Millennials and Gen Z. Whether at home or work, young people are seeking solutions that help them create a healthier and more comfortable environment, which is driving the growth of smart homes and smart building technologies.
Among the local startups delivering proptech innovations that meet this demand is a company with patented acoustic air-purification technology; a developer of autonomous service robots for deliveries, cleaning, and security; and a team that is building an AI-powered open platform for seamless building design and construction, building automation, energy management and more.
Another startup is integrating technologies that monitor and optimise building systems to help property managers control energy usage in commercial buildings, reduce their carbon footprint, and create a healthier and more comfortable environment for tenants.
There is also a lot of local activity in South China’s fintech sector. Online payments and smart contracts based on blockchain technologies are more frequently applied to rental contracts and co-working agreements in the GBA. They are also adopted by the region’s digital mortgage brokers to streamline and personalise the mortgage process.
Hong Kong’s support of proptech growth
Hong Kong has emerged as a proptech hub that is driving the growth of the sector throughout the GBA, as the city is one of the most mature and active real estate markets in the world.
While real estate and construction accounted for 9 per cent of Hong Kong’s economy in 2021, the government has further committed Hong Kong to a carbon neutrality action plan that will see the city increasingly embrace green and smart city technologies. All these would contribute to the long-term proptech development in Hong Kong.
Proptech development is also supported locally through organisations like the Hong Kong Science and Technology Park and Cyberport, which provide sandbox and incubation opportunities. Worth noting that a new proptech co-working space recently opened in northern Hong Kong as a joint project of Cyberport and the Hong Kong Housing Society (HKHS).
The collaboration, which includes a proof-of-concept programme, will give entrepreneurs access to Cyberport’s business guidance and HKHS’s knowledge of housing development and management as well as field trial opportunities at HKHS properties. It is also showcasing proptech products and solutions, including workplace robots and a smartphone booth, developed by Cyberport startups.
13 proptech startups were based at the co-working space on its opening day. They are part of a wider proptech ecosystem that encompasses a diverse range of startups, emerging growth companies, and innovative businesses across the commercial and residential real estate markets.
There continues to be huge potential for Hong Kong-based proptech startups that can add value to real estate businesses. Capabilities like sustainability, digital transactions, smart building integration, real-time data analytics and AI-powered customer service are only going to be more important to connect with the younger generation in years to come.
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