Despite the pandemic keeping us in one place most of the time, proptech is still taking off. And not just in the U.S.
Dongnae is looking to digitize the rental and home buying market in South Korea. The startup is announcing the close of a $4.1 million seed round, led by Flybridge and MetaProp, with participation by Goodwater Capital, Maple VC, and a variety of strategic angel investors in both Korea and the U.S. This brings Dongnae’s total funding to $4.8 million.
The company was founded by Matthew Shampine, who was born in Korea but raised in New Jersey. Running WeWork Labs, Shampine was stationed in Asia and then more specifically Korea to build out that arm of the massive coworking firm. Moving a lot, Shampine realized the massive hole in the very fragmented real estate market in Korea.
Dongnae is very similar to Redfin in the U.S., giving buyers and renters a centralized place to find their new home. For now, the startup only represents the buyer/renter side, partnering with the thousands of brokers in Korea to essentially build out the country’s first true MLS (multiple listing system).
Some important context: the real estate market in Korea is very different than here in the states. First, most buildings have their own broker with retail space on the ground floor, meaning that there are thousands of brokers in Korea who only represent a limited number of properties. In fact, Shampine says there are about the same number of brokers in Korea as in the U.S., which has has a much bigger population.
Secondly, due to the fragmentation across brokers, there is no real MLS in Korea that unifies all available properties. Renters and buyers must work across dozens of brokers and usually have to go see the space in person, rather than browse photos online. This system also means that the brokers are often representing both the buyer/renter and seller, which means they aren’t always negotiating in the best interest of the buyer.
Dongnae partners with brokers to centralize all the listings into one place, and gives buyers and renters an interface to browse those homes. In fact, Dongnae offers a Tinder-like experience for buyers, letting them swipe left and right on homes to learn more and more about what they’re looking for and ultimately serve up the best fit.
Not unlike Airbnb, Dongnae goes from complex to complex and builds out the digital inventory for each listing, taking 4K photos and watermarking them and passing them back to the broker, while also listing them on Dongnae.
“It’s not necessarily a franchise but it’s a really close partnership,” said Shampine.
Dongnae makes money by taking a buyer side fee, just like any other broker, which is around 8 percent in Korea. The team is 25 people strong and gender diversity at Dongnae is about 50/50.
TORONTO – One expert predicts Ottawa‘s changes to mortgage rules will help spur demand among potential homebuyers but says policies aimed at driving new supply are needed to address the “core issues” facing the market.
The federal government’s changes, set to come into force mid-December, include a higher price cap for insured mortgages to allow more people to qualify for a mortgage with less than a 20 per cent down payment.
The government will also expand its 30-year mortgage amortization to include first-time homebuyers buying any type of home, as well as anybody buying a newly built home.
CIBC Capital Markets deputy chief economist Benjamin Tal calls it a “significant” move likely to accelerate the recovery of the housing market, a process already underway as interest rates have begun to fall.
However, he says in a note that policymakers should aim to “prevent that from becoming too much of a good thing” through policies geared toward the supply side.
Tal says the main issue is the lack of supply available to respond to Canada’s rapidly increasing population, particularly in major cities.
This report by The Canadian Press was first published Sept. 17,2024.
OTTAWA – The Canadian Real Estate Association says the number of homes sold in August fell compared with a year ago as the market remained largely stuck in a holding pattern despite borrowing costs beginning to come down.
The association says the number of homes sold in August fell 2.1 per cent compared with the same month last year.
On a seasonally adjusted month-over-month basis, national home sales edged up 1.3 per cent from July.
CREA senior economist Shaun Cathcart says that with forecasts of lower interest rates throughout the rest of this year and into 2025, “it makes sense that prospective buyers might continue to hold off for improved affordability, especially since prices are still well behaved in most of the country.”
The national average sale price for August amounted to $649,100, a 0.1 per cent increase compared with a year earlier.
The number of newly listed properties was up 1.1 per cent month-over-month.
This report by The Canadian Press was first published Sept. 16, 2024.
MONTREAL – Two Quebec real estate brokers are facing fines and years-long suspensions for submitting bogus offers on homes to drive up prices during the COVID-19 pandemic.
Christine Girouard has been suspended for 14 years and her business partner, Jonathan Dauphinais-Fortin, has been suspended for nine years after Quebec’s authority of real estate brokerage found they used fake bids to get buyers to raise their offers.
Girouard is a well-known broker who previously starred on a Quebec reality show that follows top real estate agents in the province.
She is facing a fine of $50,000, while Dauphinais-Fortin has been fined $10,000.
The two brokers were suspended in May 2023 after La Presse published an article about their practices.
One buyer ended up paying $40,000 more than his initial offer in 2022 after Girouard and Dauphinais-Fortin concocted a second bid on the house he wanted to buy.
This report by The Canadian Press was first published Sept. 11, 2024.
