While Chinese investors were scooping in properties in Australia, Jon Ellis, a young entrepreneur in Melbourne who has 12 years’ experience in real estate sniffed a business opportunity. “For many years, there has been a lack of communication platform that integrates the off the plan projects and helps real estate developers to promote their projects directly to clients.” said Jon, founder and CEO of Investorist to the reporter of 21st Century Business Review.
The real estate industry seems quite complicated, especially when overseas real estate is considered. In fact, one doesn’t need to go into all those complexities to get business opportunities. Today, there is an innovative platform synergizing Chinese investors’ valor and success in Australia by digging into the business opportunity to simplify the industrial chain and facilitate the transactions between the trading parties. Everything becomes much simpler ever since.
source: 21st CBR
In recent two years, Australian properties, with its high invest return, is increasingly becoming a new favor in the eyes of Chinese investors. According to a report by Credit Suisse, Chinese buyers took 12 percent of newly built housing in entire Australia in 2013. 18 percent of Sydney’s newly built housing and 14 percent of Melbourne’s newly built housing was taken by Chinese.
Chinese investors sweeping through Australia, and Investorist sniffed a business opportunity rising from overseas property purchase boom.
After over a year of conception and construction, Investorist, a B2B online off-the-plan reservation platform that focuses on the sales of new apartments in Australia is officially launched. Investorist hopes to make use of E-commerce and online trade technologies to connect “real estate developers, real estate projects and real estate agencies” together, to bridge regional and language disparities to establish a new mode of transparent overseas property purchase system with high efficiency.
Shall young Investorist transform the property sales mode in Australia? Is it feasible for this trading platform for off the plan to serve clients all around the globe?
24 billion RMB value of stocks on sale
Compared with property purchase in China, overseas purchase often involve more complicated issues such as language barriers, legal policies and offsite loans etc.. In Australia, transactions of newly built properties also rely on professional service because while real estate developers prefer agency sale to direct sale to clients, buyers are also inclined to use professional services from real estate agencies.
For this reason, Ellis decided to target professionals like real estate developers, sales agencies, financial planner and lawyers as users of Investorist. In order to ensure the authenticity of the user identity, Investorist confirms every new users’ identity via SMS or telephone once they register.
At the beginning, Investorist introduced its platform idea to every user and published listings for free for all real estate developers in order to attract the attention of the developers and sales agencies. According to Rebecca Zhao, International Marketing Executive of Investorist, “Investorist has built up online a sales network beyond languages and regional boundaries, at an extreme low cost. The concept was immediately embraced by developers and agents, as soon as it was put forward.”
After 10 months’ promotion, Investorist attracted over 123 real estate developers to put up projects on its website, with 162 apartment projects listed with a total stock value of nearly four billion Australian dollars (around 24 billion yuan RMB). 1464 member agent searched throughout the site 740,000 times, with an online search frequency of 500 times per person. According to Jon, Investorist.com attracts around 600 unique visitings (website members only) per week.
On the platform of Investorist, every detail of every project is described strictly according to the standard of “convenient online shopping experience”: name, type, location, dimension, price, house type and orientation etc.. Australian real estate developers can upload information of the development projects, communicate directly with global real estate consultants and realize the total management of order, contract and payment. For real estate agencies and financial planners on the other side, Investorist gathers large amount of Australian off the plan stocks that can be searched and inquired whenever and wherever possible. Also, it helps agents to consult with real estate developers directly about sales commissions.
The transaction mode of Investorist is very simple and direct. Agent users only need to click on the “reservation” button under the property they like and fill in relevant information. After receiving the order, property developers shall call the buyer to confirm more details and lock relevant properties to ensure the users who make the reservation have priority in purchasing the unit within certain amount of time. Once the reservation is confirmed, the buyer should first pay 10 percent as deposit into a trust account supervised by both the Australian government. “Before the completion and key-handover of the apartment, the deposit shall not be paid to the developer.” Rebecca explained.
In terms of business model, Investorist does not profit from agents’ commission but from platform services fees. Real estate developers pay $500 Australian dollars for listing per project, while network partners pay a $99 Australian dollars monthly membership. For each successful transaction on the platform, the developer is charged $25 dollars by Investorist as transaction promotion fee.
In order to improve the value of the platform, Investorist credits the agent $20 dollars back for every transaction completed on Investorist.com. “If the agent successfully reserves 5 properties on Investorist, then the monthly fee is exempted. The ultimate purpose is to encourage online transactions and to engage developers to ours sales channel, and in the end transfer their total sales activities onto our platform. ” By the end of February, 2014, Investorist platform has facilitated over 300 transactions.
Whose cheese is moved?
As the first transaction platform of off-the-plan apartments to initiate the B2B E-commerce, Investorist is aiming to transform the traditional sales of Australian properties. In normal practice, overseas real estate agencies are sub-agents to sell stocks distributed by Australian local agents who source stocks from local developers and their projects. Now with Investorist in place, overseas agents are connected to developers directly without any middle men anymore.
“Sales of Australian properties used to have many interest parties involved and the network is a bit complicated.” Jon commented. “The beauty of Investorist is its transparency. By using online real-time messaging and reservation techniques, Investorist gets rid of the middle men, who are indeed unhappy with us in the market.”
One man’s meat is another’s poison.
For real estate developers, simplified industrial chain and transparent transaction mode is highly attractive. Australian developer 94feet is among the first “buyers” of Investorist conception, and has so far concluded 12 transactions on the platform. Jonty Rzchecta, CEO of 94 feet, summarized his user experience in two words: simple and efficient. “Investorist offers considerate services. Its bilingual system is especially beneficial to our exploration of the Chinese market.” Jonty told reporter of 21 CBR.
Before Investorist, there are already quite a number of real estate transaction platforms, such as Sofun.com in China and realestate.com.au in Australia. However, Investorist is devoted to provide all sorts of value-added services online and offline, more than a regular information integrator and advertising platform. It also cooperated with Real Estate Investar (REI), which provide research tools for real estate investors. As users search for a certain property on Investorist.com, they can see on the right side of the page analysis provided by REI, including rental yield, vacancy rate, population etc.. All the fundamental data come from the trustworthy Australian Property Monitor (APM).
With the innovative platform in operation, Jon is also trying to be creative with other value-added-services that Investorist can offer. Investorist also invites developer to jointly launch exclusive projects that have physical participation from local users and at the same time go live broadcasting to its online agents based overseas. On April 10th, by using an experience account on this platform, the reporter of 21 CBR watched online a new project release held in the display suite in Melbourne. The live broadcast enables users to know the first-hand information about the project introduced by the developer and to interact with developer by asking questions in a simultaneous manner.
As a Chinese user of Investorist, Yan Dongming, CEO of Shanghai Australive highly rated this new platform when interviewed by phone, “Investorist’s conception is so new at its early stage. It is still a “newcomer” to the Australian property industry. Some Chinese agents may have not heard about it or have used it. But after a trial, the experience will change their mind and addict to it.” He is personally very optimistic about this new business platform, and believes it shall gradually replace the traditional rules.
Observing the strong buying power from Chinese investors purchasing the Australian properties, Jon decided that Investorist should strengthen its focus on the mainland China market. The company is preparing to open a representative office in Shanghai in a month or two, and is determined to provide Chinese agents with a more and more “improved and vibrant” platform.