Oct 2016

Peer-to-peer hits the real estate market

By: Odyssey Cloud
Tags: cloud, Disruption

This week we look at an interesting peer-to-peer disruptive model that has hit the real estate market.

For anyone who has ever sold a property, there are several variable costs that are always considered. Is my marketing budget sufficient or not. Should I go to auction or choose a price. What is the real estate commission.

This new website certainly seems to avoid these costs.

Enter AoFun into the mix. And there’s something about this peer-to-peer offering that certainly seems to indicate there is some disruption possible in the real estate market.

Launched just in September 2016, AoFun is providing an online platform to connect these original buyers and potential new buyers, where the two sides can negotiate directly.

AoFun indicates more than 170 off-the-plan apartments have been listed on this service for mostly Chinese investors. That seems quite a number for a property asset, given the website was less than a month old when AoFun started being noticed.

The drive for this supply and demand is the possible apartment meltdown and loss of deposits.

This website could morph into a place where people can “buy and flip” with relative ease. In the same way shares can be bought and sold, it’s not inconceivable that people can put a deposit on an apartment and then flip it a couple of weeks later, particularly if the above marketing and real estate costs are eliminated.

However, what is interesting in this peer-to-peer model is the impressive short time it has taken to bring this to market, and the reported success in the market to date.

Large problems create huge demand for immediate solutions.

And like the frog in the boiling pot, we accept that Australian compliance isn’t quite ready to be commoditized by immediate solutions in the near future, but it’s getting noticeably hotter in the pot anyway…