SMU825

PROPERTYGURU: DRIVING AI POWERED REAL ESTATE

A house was arguably the biggest investment most people made in their lives. In March 2020, Manav
Kamboj, CTO of PropertyGuru, pondered over this fact and how technology could enable people to
make more informed choices about their property purchase. What would it take for an online real
estate firm to become a one-stop-shop for the entire home-buying (from search to purchase and
renovation) process? Kamboj reflected on this thought, as he joined his team to celebrate the launch
of their new platform - PropertyGuru Finance.

The home finance platform, PropertyGuru Finance, had been introduced in the market a week earlier.
The intent of the product was to enable property buyers (seekers) to search for home finance options,
and then apply and seek approval for a home loan. PropertyGuru's entry into home finance was a key
milestone in the company's strategic plan to evolve from a property marketplace to a property' trust
platform' in Southeast Asia. The launch of the mortgage marketplace was envisaged to take the
company beyond its focus on property search into an online property 'search-find-finance' niche.

Established in 2007 as a property search platform, PropertyGuru had grown from a small Singapore-
based start-up to a company with operations in five countries across Southeast Asia. Over the years,
the company had tapped on user-generated data to create Artificial Intelligence (AI)-based tools to
understand user behaviour and enable property seekers to do more refined property searches in a
shorter time period. By 2019, PropertyGuru Group had become Asia's leading property technology
company and the preferred destination for over 24 million property seekers every month. The
platform offered a wide range of properties with more than 2.7 million homes and a choice of in-
depth user insights that enabled seekers to make confident property decisions.

Although PropertyGuru had grown significantly since its inception, its transformation journey from
a regional online property portal to a highly sophisticated technology-based real estate platform
service with a robust portfolio of AI tools had been a complicated path. Like many ambitious high-
growth companies, PropertyGuru had grand designs for the future of online property. The company
aspired to become the first in Singapore to enable digital mortgage applications by 2022 and fully
digital property transactions by 2025.

Business Intelligence and AI solutions had enabled the platform to draw in property seekers and
agents and make the online property search a successful business. To attain its vision, however, the
platform would have to overcome several hurdles, including streamlining due diligence processes,
cutting through silos across networks, resolving interoperability issues across platforms, and enabling
solutions to speed up verification processes.

Kamboj wondered: What other solutions could Property Guru build to provide end-to-end services
through the online channel, for the home buying process? What emerging technologies could it tap
on? Was its fully digital property pursuit a realisable goal, or an elusive dream?

This case was written by Senior Lecturer Seema Chokshi and Lipika Bhattacharya at the Singapore Management University.
The case was prepared solely to provide material for class discussion. The authors do not intend to illustrate either effective
or ineffective handling of a managerial situation. The authors may have disguised certain names and other identifying
information to protect confidentiality.

Copyright © 2020, Singapore Management University Version: 2020-07-21

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 SMU-20-0019 Property Guru: Driving AI Powered Real Estate

Property Market in Singapore and Asia

Since the early 1990s, the housing market in Asia had played a key role in its economic growth.
Housing prices had continued to appreciate in the region until the Asian Financial crisis in 1997.
Countries like Hong Kong, Singapore, Thailand, Philippines, and other Southeast Asian countries
had seen sizeable appreciation in property prices and had garnered increased economic interest
globally. After the financial crisis, the Asian economy had managed to stabilise again, allowing the
property market to advance and attract foreign investments from late 2000 onwards. 1

Singapore was big on public housing until the 1990s when the government introduced schemes to
encourage the development of private housing. Subsequently, private housing became a key driver
in the country's real estate market. In 2007, the residential market in the country saw a huge boom
due to robust growth in the economy and an increased influx of professional migrants propelling
demand (particularly in the financial service industry). To control property prices, the Singapore
government introduced market curbs in 2013, and again in 2018. 2 Despite these measures, the
demand for Singapore private property continued to burgeon, driven by tight supply and expanding
financial facilities available to service private wealth in Asia (refer to Exhibit 1 for Singapore
Property Market Curbs).

PropertyGuru: The Start-up Story

In 2006, Steve Melhuish knew practically nothing about the real estate market in Singapore when
the condominium he was renting in the city was put up for sale. A British national who had moved
to the city-country with his family a year before, Melhuish was used to looking for properties online,
which was by then the norm in the UK and most of Europe. However, when he tried to find properties
online in Singapore, he realised to his dismay that the only way to perform a reliable property search
in the city was to scour through thousands of newspaper classifieds published weekly and then call
up agents to find out more about the properties.

Frustrated by his experience, Melhuish embarked on a journey to change the property market scene
in Singapore forever. In May 2007, he established the online property portal company, PropertyGuru,
along with co-founder Jani Rautiainen. The online property portal business model had worked
successfully and profitably in many countries, including France, Germany, China, and Japan and
Melhuish was confident that it would work in Singapore as well. 3

Customer Pain Points

The property market in Singapore was primarily offline, and agent led. Real estate brokers listed
properties, mainly through newspapers and other print media. Both buyers and sellers paid the agents
a commission, and all data related to the properties were managed manually by the agents. Managing
the property data offline was inefficient and time-consuming, and agents spent a lot of time and effort
collecting and managing property data. PropertyGuru tried to address some of these challenges to
provide consumers with solutions that were easy to use and more efficient. The platform provided
advanced search capabilities to property seekers and easily maintainable access to data and data

1 The link between GDP growth and the real estate market, Asia Green Real Estate, News & Insights,
https://www.asiagreen.com/en/news-insights/the-link-between-gdp-growth-and-the-real-estat e-market , accessed May 2020.
2 Singapore Property Market Cooling Measures, SRX, https://www.srx.com.sg/cooling-measures, accessed April 2020.
3 “ Wavemaker VC and Property Guru Group with Steve Melhuish”, Analyse Asia, August 22, 2019,
https://analyse.asia/2019/08/22/wavemaker-vc-and-propertyguru-group-with-stev e-melhuish/ , accessed April 2020.

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 SMU-20-0019 Property Guru: Driving AI Powered Real Estate

analytic reports to agents, helping them make more informed decisions (refer to Exhibit 2 for
Customer Pain Points).

Initial Strategy (2007-2010)

Like other real estate portals, PropertyGuru followed a simple formula to grow as a start-up: acquire
listings, build consumer traffic, and monetise the business model. The first step proved relatively
easy, the second hard, and the third inevitable. For the first few years, the company focused on
building a huge consumer audience and achieving traffic dominance.

With growing usage, the company was able to monetise its model and push out competition, forcing
the adoption of the platform by recalcitrant customers. Over time, however, it became evident to the
team that sustainable adoption was only possible by providing positive user experiences and building
on them through drawing on data that was generated by the platform on an everyday basis.

The company began to focus on getting more agents to list properties on its website. "So the strategy
was to attract more and more customers to the platform by building supplier volume," Kamboj noted.
As more properties got listed on the platform, more customers went online to check for properties.
Coincidently, at the time, there was also a huge influx of foreigners moving to Singapore from
western countries. They were used to online property searches, and this helped the PropertyGuru
platform to expand its reach further.

The company's revenue model was also crafted strategically to maximise monetisation and target
different customer segments, directing more than one source of revenue generation. There were three
segments of customers – property seekers, agents, and property developers. The revenue model was
made of three components: a subscription fee charged to agents using the platform, revenue from
advertising for agents (by selling ad spots on its online property portal and printed newsletter), and
revenue from support activities for campaigns by property developers through the entire campaign
lifecycle (from advertising to sales).

The platform's model proved to be viable. Within two years of its establishment, PropertyGuru was
able to hit the breakeven point and became profitable. In 2010, the company started to focus
aggressively on growth. It expanded operations in three countries (Indonesia, Malaysia & Thailand)
and undertook three acquisitions (refer to Exhibit 3 for PropertyGuru Timeline). It also started to
build Business Intelligence capabilities in its platform to make its offerings more attractive to target
consumers.

Business Analytics to Improve User Experience

By 2011, PropertyGuru was able to triple its revenues, doubling traffic and expanding its presence
to seven Asian countries. 4 The company grew organically, as well as inorganically through partners.
By the end of the year, the group's paying agent subscriber base rose by 85% to 13,000, while traffic
rose to around 4 million users browsing 48 million pages per month.

The home buying and selling process was complex and could take months to complete. In Singapore,
property seekers took an average of seven months from starting their property search to closing a

4 “ Property Guru Gets S$5m In Funding, Property Guru”, Market News, May 19, 2011, https://www.propertyguru.com.sg/property-
management-news/2011/5/40307/propertyguru-gets-s5m-in-funding, accessed April 2020.

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transaction. Improving the user experience was a key objective and strategy to grow the platform.
Kamboj recalled,

Our first focus in our data analytics journey was to understand consumer behaviour. What are
our consumers looking for, what are the triggers of their purchase behaviour? We then analysed
what we could do differently to help them find their property in a more efficient way. We tried to
bring science to how we were building products. We implemented Google analytics; we then
exported our analytics data into a data warehouse. Looking at that data and backing it with
consumer research, we were able to build solutions to help make the search process more efficient.
For example, a typical rental search process-cycle takes three to four weeks, whereas a purchase
process takes six to eight months. We looked at how we could support the customers during this
journey; we tried to help them shortlist the property faster by making the search results more
targeted.

Market Segmentation

To effectively implement customer segmentation, PropertyGuru used data clustering methods to find
associations in data and segment it into clusters. Property seeker customers were clustered based on
the type of properties they wanted to purchase, their budget, and their unique characteristics as
customers. For example, if property seekers from different economic backgrounds had children of
the same age group, their property requirements would share some similarities despite their budget
differences, and hence they could be in the same cluster. The clustering algorithms would pick up
these similar traits when forming the clusters. Moreover, clustering property data was also dependent
on local attributes of the property market for a country. 5

Clustering was also applied on property characteristics, producing three key residential property
groups, namely landed properties, non-landed properties, and public housing. Landed properties
included bungalows, semi-detached houses and terraced houses. Non-landed properties comprised
condominiums and apartments, and cluster houses. Finally, public housing was categorised under
housing development board (HDB) properties. Other categories included segmenting the residential
properties into newly-built (known as the "primary market") or existing properties available for resale
('secondary market').

Customers in landed and non-landed segments were grouped under upgraders, new households, or
households displaced from private land sales. Agent segmentation involved sorting agents into cohort
groups based on their transactions, property and location specialisations, and their ranking within
their cohorts.

Agent Platform

One of the first tools PropertyGuru implemented to attract agents was the AgentNet platform. All
agent subscribers were provided access to this platform, through which they could manage their
property listings and run enquiries on the parent portal. The Analytics feature in the AgentNet portal
allowed agents to seek information and customise analytics reports regarding an individual property.

The analytics report had several benefits. For instance, agents could do better negotiations based on
the information in the report. The report provided agents information on the seller, the likely seeker

5 Cluster analysis refers to a collection of methods used to segregate a set of observations into groups based on their degrees of similarity.
For example, if a bank has customers with varied incomes, it can group its customers under three clusters – low income, middle income,
and high income. In other words, clustering is the process of dividing the entire data into groups (also known as clusters) based on the
patterns in the data.

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 SMU-20-0019 Property Guru: Driving AI Powered Real Estate

and the demand of the property. The report could help them understand whether the present owner
was selling at a profit or loss. It could be one of the factors in determining how flexible the owner
could be with the offer price. A fair idea of demand of the property also enabled agents to decide
how long the property would require to be listed. For property rentals, the report helped agents get
an overview of the rental price that the property was likely to get. The analytics also helped agents
gauge the median private residential rental price, which was useful for understanding general market
trends for rentals and comparing it with the index published by government agencies every quarter.

In addition, the analytics report allowed agents to compare prices of similar properties to determine
the value of the property they wanted to list. The report was customisable, and agents could select
the parameters that were more relevant for the property. For example, the report provided a default
selection of five nearest properties with the same tenure for comparative analysis. The user could
customise further and select five other projects or properties for comparison. Such customised
information helped agents cater to their clientele' requirements more efficiently (refer to Exhibit 4
for PropertyGuru Analytics Report features).

The AgentNet platform also provided data-driven insights on an agent's listing. For example, agents
could see the viewership of the listing in the last 30 days. In addition, a 'listing performance insights'
report provided in-depth performance statistics for each active listing. A host of metrics was also
available for the agents on the platform to gain better insights. These included impressions, views,
phone reveals, messages, and a line graph. By providing agents with performance insights that were
specific to each active listing, coupled with customised feedback on the listing that was actionable,
the platform empowered agents to make precise marketing decisions.

The 'Conversion Funnel' concept was used to guide agents to improve their listing performance. The
concept proposed that in a property search journey, an agent was led through a funnel, where listings
with high impressions would get more views, and in turn, more leads (refer to Exhibit 5 for
PropertyGuru Conversion Funnel). More leads could eventually generate more conversions. Agents
were also provided with advice on improving impressions and views. This included advice on when
to repost, when to boost, the kind of property cover image to upload to get better views, and pricing
the property correctly.

Reposting a listing allowed it to appear on the top of the search result page. It also automatically
extended the listing's expiry date, which was 32 days from the new post date. The Boost feature
allowed listings to be upgraded in searches and in property details pages. Boosted listings would
immediately follow weekly featured listings - which allowed listings to be ranked on the top of search
results in selected pages. Kamboj explained,

To come up with our solutions, we looked at agent motivations. What can be an agent's next best
action? What do his data tell me? Using simple and sometimes more advanced tools, we tried to
suggest to them their next best action. The objective was to make them more successful. If the
agent is not successful, the agent will not renew with us. So it makes sense for us to ensure that
we provide agents with the right tools to succeed.

The AgentNet platform provided other additional offerings as well. Data like the recent selling price
of similar properties in the same district with the same size and similar features, pricing insights
reports, market news articles, and a yearly market outlook report offered by the platform helped
agents determine property prices more effectively. In addition, the platform also provided agents
with access to a tool called AreaInsider, which showed the highlights of an area (like how property
prices were trending in the area) and amenities and proposed future developments. Such information
was of great value to agents in the property price decision-making process.

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 SMU-20-0019 Property Guru: Driving AI Powered Real Estate

Agents were also assigned an agent score by AgentNet based on the performance of their listings,
and corresponding enquiries and advertisement views. The platform regularly provided agents with
customised recommendations about how they could improve their score, vis-à-vis the top performers
within their cohort. These insights were provided in a timely, relevant, and useful manner, such that
agents could take concrete, data-driven actions to improve their outreach on the platform, and see
better performance subsequently. For example, if listings of one agent were not doing well because
the individual posted fewer pictures of the property interiors, this information was immediately
shared with the agent so s/he could improve the listings.

Advanced Search for Property Seekers

In addition to introducing analytics capabilities, PropertyGuru also made it a point to collect data at
every point of interaction to help property seekers make more confident decisions. Property seekers
could search for their desired property based on the area, postal code, condominium name, or address.

One of the key drivers for both new user acquisition and visitor engagement was content marketing
- in which rich, useful and proprietary content was not only used to differentiate itself from its
competitors, but also to provide utility to consumers. However, the focus was not as much on Big
Data, but rather on small data. The company built its analytics capabilities by collecting more small
data. With search enhancements, buyers, sellers, and property seekers could search for properties
based on filters including price, property type, location, size, and some additional features, with many
photos of property interiors and floor plans.

The company also built a tool called Smart Select that allowed non-landed property listings to be
benchmarked against market data from government authorities and its database to generate a unique
score. This score varied according to the property seekers' unique preferences, giving each user a
consistent basis for comparing property choices. 6

The portal personalised the property search for the user by weighing this score against customisable
criteria such as size, price per square foot, location, tenure, and age of the property. Once properties
were scored, they were sorted in descending order and assigned a rank, creating a refined shortlist of
homes that could be visited.

AI and Recommendation Engine

By 2014, the PropertyGuru platform had become Asia's leading property site with over one million
listings and 30,000 agent subscribers in Singapore, and was crunching about 200,000 data points per
month. As user experiences became more intuitive, immersive, and empowering, and data collected
from users multiplied, PropertyGuru expanded its technical repertoire to introduce AI-based
solutions. The first step towards making the platform AI-driven was to clean the data, ensuring that
the database did not suffer from duplicates, illegal characters, and outliers. 7

Tabular data was sanitised, and different strategies were used to impute meaning to missing values.
Centrality measures, such as mean and median, were used to attribute values in parameters like lot

6 “ Property Guru Launches Smart Select, Sets New Frontier in Property Search”, Property Guru, Company News, November 5, 2014,
https://www.propertyguru.com.sg/customer-service/press-releases/propertyguru-laun ches-smartselect -sets-new-frontie, accessed April
2020.
7 Outliers in real estate data could be caused by many things such as erroneous data formats, bad default values and typographical errors
during data entry.

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 SMU-20-0019 Property Guru: Driving AI Powered Real Estate

size and price per square feet, whereas frequency measures like mode were used for parameters such
as zip code. Rows that had missing values in critical columns such as beds, baths, price, year built,
etc. were dropped, as there was no reliable way of salvaging such records. The data that remained
after implementing such sanitisation exercises were then used for further analysis by algorithms.
Kamboj explained,

For a property search, sanitised data were subjected to further filtering based on intrinsic
features to reduce the number of eligible properties. Renderers such as heat maps were applied
to quickly visualise the density of the listings. Plotting data with heat maps showed hot spots, and
combining maps with statistical plots yielded deeper insights.

When buying a house, a seeker would typically look for proximity to nearby amenities like schools,
grocery stores, pharmacies, hospitals, clinics and public parks etc. Geocoding modules were built
into the platform to help users search for such amenities within a specified distance around a selected
property. Another important consideration in property search for seekers was commute time to work
or school. To allow users to determine a property's accessibility to facilities, the team also built a
network module into the platform that could determine driving directions and trip duration using
historical traffic information. 8

By 2016, PropertyGuru had implemented several data-driven features in its platform to increase its
attractiveness to its key stakeholders. But the vision of the company was to become a property trust
platform rather than just a property search platform. Towards this end, the company invested hugely
in its Data Science capabilities. It established a Data Science team and hired top data scientists and
practitioners. It shifted gears from focusing on basic business intelligence to more advanced Data
Science techniques to meet growing customer needs. Business intelligence reports had provided the
company with good insights into the working of the business. Basic predictive techniques such as
regression analysis, done on samples of past data, had given some estimates of the future trends. 9

Data Science and Machine Learning

Online platform technology in the meanwhile had seen a massive evolution in the field of Data
Science. The availability of large volumes of data coupled with massive improvements in
computation capacity and algorithmic prowess to process that data had transformed the ability to
create value from data. More specifically, the field of machine learning (ML), which was concerned
with training the machine to learn patterns from data without explicitly being programmed to do so,
had seen several successful implementations. These models had the ability to evolve and improve in
accuracy as the scale of incoming data increased. This often translated to deeper insights and more
accurate predictions – thus enhancing value for the end customer. For. Example, Netflix was able to
post a massive US$ 1 billion in savings each year from improved customer retention by implementing
ML-based solutions. 10

Advanced applications of ML were not limited to structured data (i.e., rows and columns), but
enabled new and unstructured data, as well as new sources of knowledge to be tapped for business

8 “ Property Price Growth: Which Districts Had the Highest Price Psf Growth?”, Property Guru, Property Guides,
https://www.propertyguru.com.sg/property-guides/property-price-growth-which-districts-had-the-high est-price-ps f-g rowth-23379 ,
accessed April 2020.
9 Logistic regression is a statistical model that in its basic form uses a logistic function to model a binary dependent variable, although
many more complex extensions exist.
10 Aman Jain, “ How Netflix Saves $1 Billion a Year Using AI”, ValueWalk, Jun 20, 2016,
https://www.valuewalk.com/2016/06/netflix-how-saves-1-billion-year-ai/, accessed May 2020.

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 SMU-20-0019 Property Guru: Driving AI Powered Real Estate

value (e.g., text, images, and audio). For example, Netflix used video data to predict viewing habits
of users and evaluate the quality of customer experiences. 11

Recommendation Engine for seekers

The first step towards incorporating ML was the building of a 'Recommender System' to allow the
platform to suggest to consumers property choices they were likely to be interested in. The vision
was to provide users an enjoyable experience while propelling incremental revenue, similar to
companies like Amazon, Netflix, Linkedin and Spotify who had used recommendation systems to
conceive new products and offerings.

Since the early 2000s, recommender systems had been implemented by organisations to help resolve
the problem of information overload, valuing content and focusing attention on the user. Google, for
example, had implemented 'Google Adsense' in order to optimise advertising profits by taking
advantage of recommendations based on the content of queries or even emails (an example of
content-based filtering method). The principle was to simply propose private advertisers to provide
hyperlinks directed towards their website in the margin of content selected by the user. Netflix, on
the other hand, used a collaborative filtering method to identify movies that viewers might want to
watch based on their interest similarities with other viewers (refer to Exhibit 6 for a Brief on
Recommendation Systems). 12

PropertyGuru launched its recommendation engine in 2017. The recommendation engine

implemented cluster analysis of property listings based on the similarity of the properties. It also
provided a market basket analysis of enquiries based on similarities of user behaviour. In addition, a
'claim your property' feature allowed property owners to help select property fields more accurately.

Recommendations to property seekers were made based on search behaviour, taking engagement to
the next level. The algorithms were trained to recognise behavioural cues to determine the kind of
properties users were looking for and the content they were likely to be interested in. As the
recommendation engine learnt more about each user's unique needs and preferences, its
recommendations on properties became tailored, smarter, and more accurate. Key features of the
recommendation engine included display of properties relevant to the search, a chat function which
took into account the user's search behaviour, and an additional list of 'handpicked' properties for
users to access.

Initially, basic collaborative filtering-based recommendations were used, in which the

recommendations were guided by what people who displayed similar behaviour were doing.
However, Kamboj and his team were aware that property recommendations were different from other
products, in a number of ways, due to the unique characteristics of properties and the property-
purchase process. Firstly, property inventories were limited, especially in the resale market. Secondly,
unlike e-commerce, where a customer's search and purchase behaviour could be observed over
multiple visits to provide better recommendations, a property seeker did not purchase a property
multiple times. Thirdly, property buying was a limited period experience - albeit the most important
purchase a consumer made over his/her lifetime.

11 Ibid.
12 Tongda Zhang, Jun Qian, Xiao Sun and Daoqiang Guo, “ Personalized Recommendation Using Similarity Powered Pairwise
Amplifier Network”, 2019, International Conference on Algorithms, Computing and Artificial Intelligence,
https://www.researchgate.net/publication/339093367_Personalized_Recommendation_using_Similarity_Powered_Pairwise_Amplifier_
Network , accessed May 2020.

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However, because property was a special purchase, buyers often focused on specific criteria rather
than general criteria, thus reducing implicit browsing behaviour. Recommendation algorithms could,
therefore, rely on explicit interest of users based on their search terms and filters. Noting the
constraints of traditional recommendation algorithms, Kamboj and his team started to leverage deep
learning recommendation models which did not rely solely on the behaviour of customers who were
looking for similar properties. The team also started to leverage other techniques like image similarity
to figure out user interests.

Research had revealed that evaluating houses was a profoundly personal process. 13 Different buyers
looked for different characteristics in a house. Not all aspects were considered commensurably; hence
the algorithms were designed to assign different weights to various features. This allowed each
property to be allocated a weighted sum score. A house was considered more desirable if its weighted
score was higher. Some attributes were considered desirable (ex. well light and well ventilated) and
weighted positively, while others were considered undesirable (such as rooms without windows, less
storage space) and weighted negatively.

However, a property scoring function had its own set of limitations. While it was useful in comparing
the features of screened houses, it could return skewed scores when applied directly (without scaling)
to the characteristics. The reason behind inappropriate scores was the susceptibility of a scoring
function to return large values for attributes that were numerically larger. For instance, property price,
which was much larger numerically compared to the number of bedrooms, could return a much
higher score. The scaling function was applied to the scores to ensure that no single feature influenced
the property score inappropriately beyond its assigned weight.

Deep Learning for Trust Platform

As PropertyGuru became more confident in its trials with AI, it adopted more solutions to improve
the user experience, and as users became better informed, they made better decisions using the
platform, thereby contributing to the user's overall trust in the platform. Moreover, optimised search
results also contributed to building trust and user conversion. Kamboj noted,

With AI and Data Science, existing data became more beneficial in the sense that as users used
the site more, more data got created and so the more personalised the search results became.
The AI function started learning about user preferences. This could be anything from location to
the number of bedrooms and property type. When a listing is created by an agency, for example,
AI rates listing the moment this is done. Among other things, it analyses the images uploaded for
quality. It can check if the image is valid and if the agent is on the image with a phone number.
We know that visitors don't like the agent's face and phone number on images, which in turn
reduces the response rates. AI can flag this during the list creation process. Monitoring this
permanently ultimately leads to better content quality.

In 2018, PropertyGuru implemented an algorithm called Optimus to calculate ad credits for post,
repost, boost, and spotlight of a listing. 14 Optimus took into consideration the demand of consumers
and supply of listings, according to the property type, location, project, and other parameters. The
key metrics used to measure this were based on the number of visitors, the total number of listings,
the average price of the property, leads generated on the listings, etc. Depending on the score that

13 Caroline Terwee, Lidwine Mokkink, Dirk Knol, Raymond Ostelo Lex Bouter LM and Henrica C. W. de Vet, “ Rating the
Methodological Quality in Systematic Reviews of Studies on Measurement Properties: A Scoring System for the COSMIN Checklist”,
Quality of Life Research, May 2012, https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3323819/ , accessed April 2020.
14 Spotlight allowed a listing to stand out in search results, capture relevant property seekers’ interest and generate more leads.

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was calculated through the algorithm, some listings could require fewer ad credits to post, repost,
boost, or spotlight; while others could need more. 15

In 2019, PropertyGuru launched a mobile-based application called PropertyGuru Lens. The

application allowed users to focus their phone camera on any residential building and ask the platform
to interpret the image and perform a search and show listings of units that were available for purchase
or rent in the requested building.

The concept of "Lens" was inspired by several factors. Firstly, the firm had learned through a
consumer research study that users were increasingly looking at property search as a mobile
experience. Secondly, the team had recognised that cameras were an important feature of
smartphones, which users were using increasingly in their everyday lives. Use of visual search was
on the rise in retail, and was considered as the top technology. 16 Thirdly, it was predicted that the
future of property discovery would progressively become a visual experience, rather than one
involving the keyboard. 17

The Lens tool employed a deep learning model in the front end (on the phone) and the building
identification was performed by using the device location and position. This, along with geospatial
data from the device and the property listings data at the backend, allowed the application to then
identify and match properties at the location, and list available properties for the search. The deep
learning model of the Lens tool also helped the application cope with the limitations of the device,
for example not using the battery too much (which could result in heating of the device) and creating
a building identification model that did not take up much memory space in a mobile device. Tensor
Flow deep learning framework was implemented to train the model, and the iOS' core machine
learning framework was used to deploy the application on to iOS (refer to Exhibit 7 for TensorFlow2
Architecture). 18,19

Towards an End-to-End Property Solutions Business Model

The launch of PropertyGuru Finance in 2020, had taken the company beyond its platform focus of
'property search' into the end-to-end property solutions space. A range of smart tools on the platform
was designed to help property seekers at every step of their home finance journey, from
understanding loan eligibility and comparing loans to easily applying for multiple loans available
online. 20 PropertyGuru had partnered with several banks to offer digital home financing services
including instant in-principle approval, instant loan offers, and refinance checks, to enable buyers to
consume home financing services conveniently, securely and quickly. The home finance application
had taken the company one step closer to achieving its vision.

15 “ What is Optimus? Property Guru, Al About Ad Credits”, http://help.propertyguru.com.sg/en/articles/2397875-what-is-optimus,

accessed April 2020.
16 Kaleigh Moore, “ Why More Retail Brands Are Launching Visual Search Tools”, Forbes, Sep 4, 2019,
https://www.forbes.com/sites/kaleighmoore/2019/09/04/why-more-retail-brands-are-laun ching-visual-search -tools/#7d810c9b1bda ,
accessed May 2020.
17 Albizu Garcia, “ Why Visual Search Will Be One of the Biggest Digital Marketing Trends of 2019”, Jan 15, 2019,
https://www.socialmediatoday.com/news/why-visual-search-will-be-one-of-th e-biggest-digital-marketing-trends-o f-20/545999/,
accessed May 2020.
18 Charmaine de Lazo, “ How PropertyGuru Built its Google Lens-Like Feature”, Tech In Asia, May 27, 2019,
https://www.techinasia.com/propertyguru-built-visual-search-feature, accessed April 2020.
19 “ Tensor Flow, Tensor Flow Guide”, March 31, 2020, https://www.tensorflow.org/guide/effective_tf2, accessed April 2020.
20 PropertyGuru Finance, PropertyGuru, Mortgage, https://www.propertyguru.com.sg/mortgage?gclid=EAIaIQobChMI-
qL9j7CI6gIVwg0rCh1yoQboEAAYASAAEgJhtvD_BwE , accessed May 2020.

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 SMU-20-0019 Property Guru: Driving AI Powered Real Estate

Company's Vision

PropertyGuru's vision of enabling online property transactions had come at a time when the concept
of the online property market was gaining greater momentum in Singapore. The Singapore
government had launched the real estate industry transformation map (ITM) in February 2018 to
automate the property transaction process. 21 Industry experts felt that emerging trends in real estate
had placed the industry at the intersection of platform technologies (which leveraged AI, Data
Science, and mobile technology) and managed logistics (eSignature and transaction management
platforms). 22

Emerging trends in real estate

Emerging trends were expected to dramatically lower transaction costs, and enhance confidence in
public land records, as well as facilitate peer-to-peer transactions and automated processes. 23
Concepts like the virtual coach and Facebook groups, which acted as collective-conscious mentors
for agents, were also gaining traction. For customers who expected the personal touch, robo-advising
was being tested as a possible solution. 24 Blockchain, the technology underlying bitcoin, had also
emerged as a viable virtual currency and real estate pilots in some countries were already
demonstrating its potential to revolutionise digital databases and trusted business transactions. 25

A blockchain was defined as a shared ledger in a computer network that was accessible by all
stakeholders. 26 Whenever a transaction was processed, all the computers in the network would record
the transaction. A decentralised system enabled by blockchain had the potential of eliminating fraud
by enabling transparency in the transaction process. 27 The introduction of smart contracts in
blockchain platforms had enabled assets like real estate to be tokenised and traded in cryptocurrency
like bitcoin. 28 However, blockchain technology was expected to have its own set of challenges. A
key issue was the concern over the time it could take to settle a transaction over the blockchain due
to the involvement of multiple parties. 29 Verification of the identity of involved parties could also be
cumbersome. Many countries did not have an official ID for all residents, and this could become a
hurdle in the execution of transactions over the blockchain. 30 It was, therefore, essential to
complement blockchain with ID identification or other personal identification technologies like
biometric analysis which could help make the process less cumbersome. 31

A key concern with implementing blockchain was interoperability, as there were various different
networks within the technology's umbrella. Additionally, there was the issue that lack of
interoperability between the networks could create silos which could make transaction processes even
slower. Another hurdle was the cost of running bitcoin blockchain networks on scale, as they required
very high computing power for execution. Lastly, the implementation of bitcoin transactions over a

21 Council for Estate Agencies, Press Release, February 8, 2018, https://www.mti.gov.sg/-/media/MTI/ITM/Built-Environment/Real-

Estate/Real-Estate-ITM---Press-Release.pdf , accessed April 2020.
22 Ibid.
23 Ibid.
24 Ibid.
25 Nick Hastreiter, “ What’s the Future of Real Estate?”, Future of Everything, News, https://www.futureofeverything.io/ask-the-
thought-leaders-whats-the-future-o f-real-estat e/#comments, accessed April 2020.
26 Rosa M. Garcia-Teruel, “ Legal Challenges and Opportunities of Blockchain Technology in the Real Estate Sector”, Journal of Property,
Planning and Environmental Law, January 20, 2020, https://www.emerald.com/insight/content/doi/10.1108/JPPEL-07-2019-
0039/full/html , accessed May 2020.
27 Ibid.
28 Ibid.
29 Ryan Browne, “ Five Things that Must Happen for Blockchain to See Widespread Adoption, According to Deloitte”, CNBC, October
1, 2018, https://www.cnbc.com/2018/10/01/five-crucial-challenges-for-blockch ain-to-overcome-deloitte.html , accessed May 2020.
30 Ibid.
31 Ibid.

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 SMU-20-0019 Property Guru: Driving AI Powered Real Estate

blockchain for settling real estate transactions required regulatory support and a regulatory framework
that could enable such technologies to flourish on a large scale. 32

While end to end online property transactions had not evolved yet, some real estate players were
already using online technology solutions to enable convenient property transactions. Singapore
based real estate company, JTC, had rolled out a paperless tenancy renewal solution for customers
to renew their tenancy through a simple declaration. 33 Many real estate agents had started to use
virtual simulation technology to allow customers to visualise property units and configurations before
purchasing newly built properties. 34

Dot It Yourself (DIY) real estate portals were also gaining traction as consumers gained more
confidence in making decisions on their home purchase using the online channel. The DIY approach
tried to remove the agent from the real estate transaction by allowing sellers to list, sell, compare and
transact and seekers to search, find, loan and transact for their property themselves. 35

Many online property platforms were also providing renovation and interior design services
extending a real estate's value offering to beyond the property transaction stage. Some property
portals had gone one step further to offer renovation as a free gift with the sale of a property. The
idea behind this 'free gift' concept was that a renovated house could attract a better price for the seller
and garner increased interest from seekers. 36

What's Next?

Kamboj ruminated over all the possibilities that PropertyGuru could further explore to attain its
vision. Amidst the development of the ITM framework in Singapore, the company's long-term goals
seemed quite feasible and attainable. However, Kamboj knew that technology alone yielded a
slippery slope towards sustainable success.

There were several key questions that required careful consideration, keeping in mind the company's
growth chart so far. What had been Property Guru's key value proposition? How had Business
Intelligence and AI contributed to the company's growth and success so far? How could AI help
further accelerate the growth of the company and help it achieve its vision? How could PropertyGuru
become an end-to-end solutions cross platform in the real estate market? What real estate services
could PropertyGuru add to its repertoire to expand the platform further? What emerging technologies
could it leverage for the offering of these services?

32 Ibid.
33 Lynette Khoo, Real estate ITM identifies property transactions services, facilities management for transformation, Business Times,
Feb 08, 2018, https://www.businesstimes.com.sg/real-estate/real-estate-itm-identifies-property-transactions-servi ces-facilities-
management-for , accessed May 2020.
34 Ibid.
35 David, The economics of DIY real estate platforms, PropertyInvestSg, April 13, 2018, https://www.propertyinvestsg.com/the-
economics-of-diy-real-estate-plat forms/ , accessed June 2020.
36 Inclusive Estates, Sales, https://www.inclusiveestates.co.uk/sales.php , accessed July 2020.

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 SMU-20-0019 Property Guru: Driving AI Powered Real Estate

EXHIBIT 1: SINGAPORE PROPERTY MARKET CURBS

Effe ctive Date Major Cooling Me asures that Affe ct Re sidential Property Market
Additional Buyer's Stamp Duty (ABSD) rates for Singaporeans and Singapore Permanent
Residents (SPRs) purchasing their first residential property will remain unchanged at 0% and
5% respectively; Rates for individuals buying their second and subsequent properties will be
6-Jul-18 raised by 5%, while that for corporate entities would be increased by 10%; Non-remittable
ABSD on residential developers 5%
Loan-to-Value (LT V) limits tightened by 5% for all housing loans granted by financial
institutions.
Seller Stamp Duty (SSD) reduced by 4% for each tier. With this change, SSD will only apply to
properties sold within 3 years of purchase, down from 4 years previously.
T otal Debt Servicing Ratio (T DSR) will not apply to mortgage equity withdrawal loans with
11-Mar-17 LT V ratio equal or below 50%.
Introduced Additional Conveyance Duties (ACD) for Property Holding Equity (PHE). ACD
plugs a loophole which exempted companies from paying ABSD and BSD in the past. A PHE is
a company whose primary (> 50%) tangible assets are Singapore residential properties.
Reduction of Cancellation Fees from 20% to 5% for Executive Condominiums.
Resale Levy for Second-T imer Applicants
Formerly second timers are not required to pay a levy. T his is applicable to only new EC land
9-Dec-13 sales which are launched on or after 9th December 2013.
Revision of Mortgage Loan T erms
T he Mortgage Servicing Ratio (MSR) cap will apply to EC purchases from 10th December 2013
onwards.
Singapore Permanent Resident Households need to wait three years from the date of obtaining
SPR status, before they can buy a resale HDB flat.
Maximum tenure for HDB housing loans is reduced from 30 years to 25 years. T he MSR limit is
reduced from 35% to 30% of the borrower's gross monthly income.
27-Aug-13
Maximum tenure of new housing loans and re-financing facilities granted by financial
institutions for the purchase of HDB flats (including DBSS flats) is reduced from 35 years to 30
years. News loans with tenure exceeding 25 years and up to 30 years will be subject to tighter
LT V limits.
ABSD introduced for further cooling measures:
Foreigners and non-individuals pay 10%, PRs buying second and subsequent property pay 3%,
Singaporeans buying third and subsequent property pay 3%.
8-Dec-11
Developers purchasing more than four residential units and following through on intention to
develop residential properties for sale would be waived ABSD
T o qualify, developers have to produce proof of development and sale within five years
Holding period for imposition of SSD increased to four years from three.
SSD rates raised to 16%, 12%, 8% and 4% of consideration.
14-Sep-11
LT V lowered to 60% from 70% for second property.
LT V for non-individual residential purchasers capped at 50%.
Holding period for imposition of SSD increased to three years from one.
Minimum cash payments raised to 10% from 5% for buyers with one or more outstanding
30-Aug-10 housing loans.
LT V lowered to 70% from 80% for second properties.
Introduction of SSD for residential property and land sold within one year of purchase.
20-Feb-10
LT V lowered to 80% from 90% on all housing loans except HDB loans.
Interest absorption scheme (deferment of instalments until T OP) and interest-only housing loans
14-Sep-09 (interest payment only until T OP) were scrapped for all private properties.

Source : Singapore Prope rty Marke t Cooling Me asures, SRX, https://www.srx.com.sg/cooling-measures, accessed
April 2020.

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 SMU-20-0019 Property Guru: Driving AI Powered Real Estate

EXHIBIT 2: CUSTOMER PAIN POINTS

Source : Author’s own

EXHIBIT 3: PROPERTY GURU TIMELINE

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 SMU-20-0019 Property Guru: Driving AI Powered Real Estate

Source : Company Data

EXHIBIT4: PROPERTY GURU ANALYTICS REPORT

Source : Company Data

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EXHIBIT 5: CONVERSION FUNNEL

Source : Company Data

EXHIBIT 6: RECOMMENDER SYSTEMS

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TAXONOMY OF RECOMMENDER SYSTEMS

CONTENT BASED FILTERING

COLLABORATIVE FILTERING

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 SMU-20-0019 Property Guru: Driving AI Powered Real Estate

HYBRID FILTERING

Source : Lionel Ngoupeyou Tondji, Web Re commender System for Job Seeking and Re cruiting, African Institute
for Mathe matical Sciences (AIMS),
https://www.re searchgate.net/publication/323726564_Web_Recommende r_System_for_Job_Seeking_and_Recruit
ing , acce ssed April 2020.

EXHIBIT 7: TENSORFLOW 2.0 ARCHITECTURE

Source : Te nsor Flow, What’s coming in Te nsorFlow 2.0, Te nsor Flow Blog, Jan 14, 2019,
https://blog.tensorflow.org/2019/01/whats-coming-in-tensorflow-2-0.html

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