Proptech in Laos is hinging on the growth of real estate market of Laos. The real estate growth is mainly due to the arrival of entrepreneurs from its neighboring countries like Japan, Korea, Indonesia, Malaysia, the Philippines, Singapore, and Thailand. These entrepreneurs have invested money in realty projects, among other sectors, and expect a good return as the realty market shows a slight rise in demand and have positive projections in the near future.
As the property market is not at the boom like many other Asian countries, the use of technology in realty sector is quite moderate. A handful of entrepreneurs have developed some property websites targeting mainly the foreigners and emerging startups in the country for rent, lease or sale.
While natives prefer investing in lands and build standalone houses, foreigners go for apartments, well-constructed villas, and retiring homes.
The use of online portal ensures the presence and visibility of Laos’ real estate agency in other countries to attract foreign buyers. Though foreigners can’t own land in the country, a lot of property owners in Laos have sold the property by a 30-year lease agreement with the condition that if the law allows in future, the contract holders are entitled the legal title of the property.
The natural beauty of Laos provides a relaxed environment, and this attracts wealthy businessman from the US and many European countries such as France, Switzerland. The low property prices and cheap cost of living drive them to set up retirement homes in Laos’ scenic locations.
Real estate scene in Laos
As per TradingEconomics, the Gross Domestic Product per capita in Laos was last recorded at 1789.10 US dollars in 2018. The GDP per Capita in Laos is equivalent to 14 percent of the world’s average. GDP per capita in Laos averaged 844.34 USD from 1984 until 2018, reaching an all time high of 1789.10 USD in 2018 and a record low of 401.60 USD in 1988.
Foreign investments are pouring into the Laos real estate market especially from China. With its One Belt One Road initiative, Laos is among the main beneficiaries of China’s pet project. This high speed rail line being financed by China will go through Laos and into Southeast Asia, leading to even more trade in the future. Chinese businessmen are the dominant property investors in Vientiane, along with a mix of Laotian, Vietnamese and Thai investors
However, there are restrictions that restrain foreign investments, especially homes. As per InvestAsian, foreigners can only lease land for a period of up to 30 years. Though one can own houses and other types of real estate in Laos – yet not the land your property is built on.
The growth of realty market has taken place primarily due to continued economic development as well as the flow of foreign tourists in the country. As far as the residential market is concerned, the apartment culture is not very prevalent due to land laws.
There is no law, which allows various property rights on one large parcel of land, hence as an exception to the rule, a few of the apartments have been developed, and this segment faces a severe lack of supply.
Experts believe that if the government amends this law to encourage apartment culture, this will provide a fresh momentum to the property market. It will increase supply in the market.
The country’s retail sector is in the emerging stage with a low density even in the capital city of Vientiane. The office space area commands higher rent due to which it faces low occupancy.
Technology and real estate in Laos
Property websites have come up in Laos to help local population search property for end use as well as for investment purposes. A majority of them target foreigners. Besides searching for a right property for foreigners, these sites also provide a lot of consultancies to make them understand the legal laws of the country and how they can own a property despite these challenges. These brokerage firms negotiate on behalf of buyers for a commission.
In most of the developing countries, land revenue records are not digitised, and this makes a property purchase a complicated process. Same is the case in Laos hence to make the property purchase an easy and less cumbersome affair; brokerage firms offer to do due diligence exercise on behalf of buyers.
As per Asia News Network, small and medium sized enterprises (SMEs) in the Mekong region have to adopt new digital technology so that they can catch up with the changing business environment, the head of a Lao trade lobby group has said.
Some property portals are running as online to offline mode in which, they attract customers through their sites, and once the client contacts the brokerage firm, it takes them for a real property trip to each area.
Some of them have specially hired staff who can speak and understand foreign languages such as French, German, etc. to cater to the requirement of international buyers.
A Cambodia, Laos, Myanmar, Vietnam and Thailand (CLMVT) Forum 2018, was held in Bangkok on August 16-17. It was emphasised that SMEs, startups, and young entrepreneurs, as key drivers of the CLMVT economies, are increasingly under pressure to adopt new technologies that would enhance competitiveness and their integration into the global market. This would also help to create value and better livelihoods for all stakeholders in their value chains.
Here are a few proptech related startups in Laos:
The www.Yula.la is leading classified portal for real estate, automotive, electronics, and general product listings. Southeast Asia’s Digital Classifieds Group (DCG) purchased it. The website gives an option to buy apartments, villa, etc. They also enlist commercial properties like warhouses.
Dot Property Laos
Dot Property Laos brings together property buyers, renters and investors with private home sellers, renters, real estate agents and the best property developers in the country. Dot Property offers thousands of properties to search from and keeps users informed through news, tips and features. The Dot Property websites aim to make the move online faster and simpler whilst being one of the best tools to help sell or rent property.
IMMOLAOS is a leading Professional Real Estate Agency, Property broker and Specialist for Vientiane property market. They offer a wide range of luxury apartments, villas, homes, office spaces, factories, warehouses and lands as well as industrial and commercial properties available for rent and sale in Vientiane and all over Laos.
Some of the well-known property websites are Immolaos, Realestatelao, dotproperty.la, rentsbuy, J&C Services, Wegofa, Realestateinlao etc. While some of them offer online advertising space to other companies, some are the extension of offline brokerage business of real estate agents or developers.
Opportunities in proptech
If Laos leverages the latest technology in the realty sector, it will certainly result in property market growth and overall economic development for realty consultants.
Laos has some fabulous realty destination, which it needs to showcase to the western world to attract more and more tourists as potential clients. If people can take a walk into these destinations through virtual reality sitting at home, it will encourage and attract them. At present, realty portals haven’t converted into the full-fledged marketplace where people can buy and purchase the property.
Of late, Laos has started using the VR technology with the help of foreign companies in other sectors. For instance, Australian archeologists will use drones and multi-space cameras to take 3D images of the Plains of Jars, an archeological and mysterious site in Xieng Khouang province where thousands of stone vessels have found. Archeologists haven’t been able to find out the reason and purpose of these vessels.
After making pictures and videos, the VR technology helps create a museum where people can wear a headset and roam around the site as if they are visiting the site in reality. If the same technology can be implemented in real estate, foreign tourists can visit the picturesque locations and luxurious property locations with the help of technology without actually visiting the site.
Way forward for proptech in Laos
Laos is a country, which is small but huge in opportunity for the realty sector. The property market has shown a growth trajectory due to rise in internal consumption and demand from foreign consumers. There is tremendous potential for growth if the government amends the land laws in the country and realty players adopt the innovative technology to market their product.