Hardly a day goes by without a portal company somewhere in the world releasing a new report or new set of data about the housing market in its country. In this article, Juwai IQI Executive Chairman Georg Chmiel muses on the changing role of property portals when it comes to housing data. Georg is one of a roster of prestigious speakers at tomorrow’s Property Portal Watch APAC event. Registration is still open and totally free through this link.
For centuries, economists, statisticians, and analysts have relied on official data to help them predict market trends.
Reliance on official data goes back at least as far as William the Conqueror, of England. His 11th-century Domesday Book was a comprehensive inventory of land and landholders --and thus of taxes owed-- across most of England.
The drawback of official data is that by the time you have it in your hands, it is already nearly out of date. William's Domesday book took the better part of a year to compile.
Today, society has advanced in many ways. One thing that has not improved tremendously is the timely release of official data.
Australia's Foreign Investment Review Board ("FIRB") is a good example. The FIRB issues annual reports on the foreign investment it has approved and denied. Yet, these reports generally are not published until nearly a year after the end of the covered period. The 2018-19 report, for example, was not released in the second half of 2019. Nor did it see the light of day in January or February of 2020. The FIRB's 2018-19 report was finally published just one month before the end of the following financial year, in May 2020.
Australia's FIRB is not exceptional in its tardy release of official data. What is notable is that today we finally have an alternative source of data from an economic player that is timely, comprehensive, and precise. That new source of data is real estate portals.
The first property portals were nothing more than online equivalents of the old print ads that helped fund decades of newspaper profits. Today, though, portals have transformed into critical pieces of infrastructure for property markets that bring together agents, developers, and consumers in a mutually beneficial web of services and transactions.
Because portals are digital, all of the activity they enable can be tracked, anonymized, and aggregated. I believe that makes real estate portals today’s most significant sources of data and insight on property markets. More than government bodies, more than the largest real estate agency networks, and more than third-party market researchers, real estate portals have become the true authorities on the real estate markets in which they operate.
Nor is it just real estate. What analysis of the automobile market would be complete without the latest data from online new and second-hand auto sites? And economic analysis is frequently buttressed with the latest job-ad data showing both employer and employee demand.
At Juwai IQI, we have embraced this new role as sources of authoritative data about the property market. Our data is cited in news reports and requested by government agencies and financial institutions around the world. Bloomberg, the Wall Street Journal, the Financial Times, Yicai, and Caixin, are just a handful of the prestigious global media outlets where you can see our data reported.
But Juwai IQI is not alone. Zillow and Redfin in the USA, Rightmove in the UK, Fang in China...portals all over the world are doing similar things. The real estate industry no longer has to wait for official government or institutional data. Instead, portals are using their live, real-time data to track and report on market trends. Who benefits from these deeper and timelier insights? The list of beneficiaries includes investors, industry, policymakers, and consumers.
As U.K. market leader Rightmove puts it, portals offer "the most complete market picture, with millions of data points added monthly." Rightmove has begun to use its data to provide valuation and surveying tools to lenders, housebuilders, and surveyors. The data that portals can provide is both market-wide and hyper-local since nearly every acquisition or sale today takes place at least partially online.
Zillow, in the U.S., famously got its start in 2006 as the first real estate listings website to incorporate valuation data. These so-called "Zestimates" allow anyone to see what their home might be worth.
Today, Zillow has turned its scale into more powerful data products. Its Zillow Home Value Index is a measure of the typical home value in a given region and housing type. Zillow also offers an Observed Rent Index, as well as for-sale inventory, newly pending listings, mean and median days to pending, median list price, median sale price and share of listings with a price cut.
Southern European property portal idealista was just acquired by EQT for EUR 1.3 billion (US$1.54 billion). Surely, idealista's massive and ever-growing cache of data played some part in that impressive valuation. The company promises its data can help investors and industry players to reduce risk, manage their portfolios, and evaluate new opportunities.
This article provides just a small sample to demonstrate how portals have become the new authorities on real estate markets. Their data has great value for the marketplace, but the portals who claim this role also benefit.
The portals' data can help guide their own business decisions in such areas as product design and strategy. For those portals that wish to launch new business models, such as Zillow’s move into ibuying, having a proprietary source of market data provides a competitive advantage. This data is also a marketer’s dream, providing tangible and useful news that can create headlines in the top media.
Portals have to remember that they do not exist in a vacuum. Today, many consumers have a heightened sensitivity to privacy. Portals are wise to remember they operate only with the permission and cooperation of the real estate industry and consumers. By providing useful data to the marketplace, portals have discovered another way to serve their stakeholders and cement their role as a critical intermediary in the property market.