Ohmyhome - Q3 2024

Transcript

Moderator (participant)

Hi, good evening, everyone, and good morning to our investors in the US. Welcome to Ohmyhome Q3 2024 growth updates. Before we start, we would like to quickly go through the important notice and disclaimers. This presentation contains forward-looking statements that reflect our current expectations and view of future events, all of which are subject to risks and uncertainties. If used, the words "believe," "may," "will," "estimate," "continue," "anticipate," "intend," "expect," and similar expressions are intended to identify forward-looking statements. Forward-looking statements give our current expectations or forecasts of future events. You can identify these statements by the fact that they do not relate strictly to historical or current facts. These statements are likely to address our growth strategy, financial results, and product and development programs.

You must carefully consider any such statements and should understand that many factors could cause actual results to differ from our forward-looking statements. These factors may include inaccurate assumptions or broad varieties of other risks in the sentences, including some that are known and some that are not. No forward-looking statements can be guaranteed, and actual future results may vary materially. Factors that could cause actual results to differ from those discussed in forward-looking statements include, but are not limited to, assumptions about future financial and operating results, including revenue, income, expenditure, cash balances, and other financial items. Our ability to execute our growth strategies, including our ability to meet our goals, current and future economic political conditions, our capital requirements, and our ability to raise additional capital, which we may require.

Our ability to attract customers and further enhance our brand recognition, our ability to hire and retain qualified management personnel and key employees in order to enable us to develop our business, trends and competition in the brokerage and related industry, and other assumptions described in this presentation underlying or relating to any forward-looking statements. We describe certain material risks, uncertainties, and assumptions that could affect our business, including our financial conditions, results of operations, and alternative filings. We base our forward-looking statements on our management beliefs and assumptions based on our information available to our management at the time the statements are made. We caution you that actual outcome and results may and are likely to differ materially from what is expressed, implied, or forecast by our forward-looking statements. Accordingly, you should be careful about relying on any forward-looking statements.

Except as required by law, we undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events, or otherwise after the date on which statements are made or to reflect the occurrence of unanticipated events. You should read our public filings and the documents that we refer to in this presentation with the understanding that our future results may be materially different from what we expect.

Rhonda Wong (CEO)

Hi everyone, good day to you. I'm Rhonda Wong, CEO and co-founder of Ohmyhome. Thank you very much for joining us today. We founded Ohmyhome in 2016, and that's Ray, Swan, and myself in the image, our sisters born in Malaysia, raised in Singapore. We started Ohmyhome with a background in property transactions and also trading, and we realized that there is a huge market gap where a lot of people who are selling and buying infrequently do not quite have the right knowledge or information when it comes to real estate transactions, and we're very much reliant on real estate agents to provide information, so we have since become Singapore's largest integrated property transactions and services platform.

Many people call us the one-stop shop, which means that aside from buying, selling, and renting with Ohmyhome, you can also secure a mortgage, legal services, as well as renovation and property management. Our vision is to be the most trusted and comprehensive property solution for everyone. And by everyone, we mean people including those who can't afford services or agent fees, as well as the rest of the market from investors to your daily folks buying and selling for the first time. In order to achieve scalability and to be able to serve more consumers across the world, we then use technology to bring speed, ease, and reliability to property-related services. So we're very happy to share and present our results today. And today's presentation will be led by our Director of Finance, Leo Li.

Leo Li (Director of Finance and Head of IR)

All right, thank you, Rhonda. So first off, just a quick overview of our latest cap table. So our ticker symbol is OMH, traded under the Nasdaq exchange. Our IPO was last year, March 21st. And our current shares outstanding is at 23 million shares as of the latest of yesterday. And our share price as of yesterday was $0.44. And our last 90-day average trading volume is 135,000 shares per day. Analyst ratings by Maxim and Zacks are sitting at $1.5 and $3 respectively. On the September 6th, 2024, the founders, which are namely Race and Rhonda Wong, have actually exchanged half of their monthly salaries from January 2024-August 2024 into ordinary shares. And those shares were issued on October 4th, 2024. And so this green section here that you see are the additional shares that are being acquired by the two founders.

This has shown that the founders believe in the business and is committing, basically, it's committed to the business and willing to commit more. Later on, we will share the reason why, and primarily it's because of the growth of the business that we are seeing. So we are a property one-stop shop. And this diagram encapsulates all the businesses that we do. So our customers can come in from every part of their life cycle with regards to property. So let's say if you're a property potential buyer or a seller, usually we'll start with the research section where you will look at free blogs, evaluation of the homes, and look for guides. And some of those who may be thinking about doing it by themselves with the time and energy to do so, they will do so via our DIY platform with verified listings by homeowners.

The majority of our customers actually prefer to have an agent to help them transact the property. All of our agents are in-house, and then they are also top 1% in Singapore in terms of number of transactions across the entire Singapore. We usually charge around 1% of the property's value as a commission revenue for our brokerage business. To support our brokerage business and also to help our customers close faster, we also work with other banks to provide mortgage to all of our customers and also work with a panel of trusted law firms to provide legal conveyancing services where we acquire advertisement revenues from them. During the process, of course, in Singapore, it is very common for homeowners who just purchased their home to look for renovation.

We are also the main contractor in the renovation business that has in-house interior designers as well as project managers to help design and build their dream homes for our clients. So for this segment, we typically service high-end condominium homeowners, land homeowners, as well as office renovation projects. Lastly, we have the third business unit, which is also a prominent business unit, is the property management business, where we are the managing agents for multiple condominium projects that basically we help them manage all of the common areas and allow the residents to book all of the facilities such as tennis court, such as sauna room, et cetera, et cetera. And we collect property management revenue from them. A quick recap of our first half of 2023's results in case some of the investors here missed it.

In the first half, we have seen a stellar growth of 106% in terms of revenue. Our revenue grew from SGD 2.17 million-SGD 4.47 million. Our gross profit has almost doubled. This is mainly due to a margin improvement across all of our businesses. Our brokerage has increased its gross margin from 46%-49%. Our renovation business has also increased its margin from 23%-28%. Our property management business has also increased their gross margin from 31%-33%. We are still incurring a loss, although the loss is narrowing because we are continuing investing in the technology. The loss has been narrowing. We have seen a net decrease of SGD 220,000 compared to the same period last year. OpEx remained high in the short term, mainly due to a recent acquisition of the property management business.

We still need some time to optimize the costs that are involved. There's also an increase in advertising expenses of SGD 440,000 in the first half of 2024 versus only SGD 180,000 as compared to the same period last year. The operating expenses are expected to reduce significantly from the third quarter onwards, mainly due to a series of cost optimization plans that we have initiated in the second quarter of 2024. We expect this number to narrow significantly going forward. In terms of balance sheet-wise, we have also seen an increased improvement in the balance sheet health. We have seen an increase in assets, decrease in liability, which leads to a net increase in equity. Cash and cash equivalent, we have also rebounded to a healthy number of SGD 2.4 million.

This is mainly due to placements that we have done in the first quarter of the year to execute our strategy for further growth and breakeven. Now come to the important part. We would like to summarize our presentation to three main key points. One is that we are a high-growth PropTech company. Secondly is that we are a business model that is highly profitable at scale. Thirdly, currently we are trading at a low valuation multiple as compared to what's happening in the industry. With regards to the first point, which is high-growth PropTech, I'll go into the detailed numbers here. For the third quarter of 2024, what we are seeing is that for the first nine months of 2024, what we are seeing is SGD 212 million in terms of the gross transaction value of the homes that we have brokered.

And this number has a 51% increase as compared to last year, we have also seen a significant increase in the renovation contract that was signed for the first nine months of 2024, so the contract we have signed so far is SGD 2.43 million, and this is essentially close to 300% of what we see in the same period last year, and in terms of the units under management by property management business, we have seen a significant growth compared to the 6,700 units that we managed at the end of the year, now this number has increased to 9,283, and this represents a 38% year-on-year increase. In terms of total property transaction GTV, we are looking at SGD 334 million, which is similar to last year, but out of that, 63% has gone through our agent as compared to only 42% compared to the same period last year.

So lastly, of course, profitability and maintaining cash balance is always a focus for us. So as of September 30th, 2024, our cash balance sits at SGD 2.1 million. And this actually increased from the last reported figure, which is SGD 1.8 million in June. For brokerage services, we have seen a steady increase. So this graph, the orange bar represents the number of transactions that we have done by our agent team. And the blue line represents the gross transaction value in USD millions. As you can see, both have seen a healthy increase over time. And for the first nine months of 2024, what we are seeing is a 51% increase in the total GTV. And in terms of the number of transactions, we have seen a 32% increase for the first nine months of 2024. We have also seen an increase in gross margins.

This is primarily due to improved brand awareness that we have in the market and also primarily contributed to the Homer AI launch that we have done in the second half of 2023. So to recap, for Homer AI, this is actually a one-of-a-kind homeowner-focused platform that streamlines the home selling process. So this is available on both application and mobile. So you can simply just search Homer AI. And this is available currently only for our customers in Singapore. So what you do is that you actually will be able to see an accurate valuation of a home that is live, that's updated by what's happening in the market, and also supported by tons of guides, data about recent transactions. And also our service is always just one click away for you to engage us.

So this allows us to build a sales pipeline for mid to high-intent sellers and provide us with first access to customers upon their intent to sell. And because of the higher customer lifetime value that we have versus via a single customer acquisition, this allows us for a core focus of user acquisition strategy going forward. So in terms of the growth of the product on its own, what we are seeing is in the third quarter of 2024, we have seen close to 10,000 homes connected. These are homeowners with their registered address, with their registered phone number that we know exactly who they are and know how to contact them. And by studying their behavior on the platform and how they use our data, we are able to know when to target them, when we need to target them exactly.

As you can see, this number has increased steadily. And for the GTV that's transacted via homeowner users, this number has also increased steadily over the years. This total homes transact, sorry, total homes connected right now is around $33,000 with over $20 billion of gross merchandise value of the homes connected that's waiting to be transacted. The transaction that's contributed by Ohmyhome AI users now has grown from 0% in the start when we first developed it to close to 20% of the total brokerage that we have done. We have also been developing new features and products that allow our users to do more. One of which is that Ohmyhome AI users now are able to post their listings directly on the app if they have the intention to do it themselves.

They are able to know the latest valuation, upload their homes, and then we are even able to pre-draft some of the messages for them via AI. And also lastly, able to help them fill in the critical information. So it's just one click away. So why people love us? There are multiple reasons. And most importantly, is that we are the future of property transactions. So because of the technology that we have, that we show you just now, there's an Ohmyhome AI, and one of which is another one that we have shared in previous presentation, which is the MATCH technology that actively matches the buyers and sellers. We are able to transact 65% of our deals in seven days on average. And 73% of our properties are sold above market average prices.

And most importantly, it is that the experience that we give to clients basically helps us get the 4.9-star out of five-star rating across all of the platforms that you can see out there, including Google and Facebook. These are generating reviews by our customers having used our services and were impressed by our services. Compared to some of the well-known names out there in the market as the traditional brokerage or the TEB out there, so compared to, we are much more efficient with the use of technology. So each one of our agents is able to transact 60-70 deals a year. So the average number last year for us was 63 deals per agent per year. And comparing to all the big names out there, PropNext, ERA, OrangeTee, and Huttons Asia, which they do have a large army of agents.

But in terms of how many deals each agent does on average, their number hovers around three to four to five, which is a typical number that an agent does in the market when they're operating as a freelance model. And for us, because we operate a very close-knit and also supported by technology, we are able to close a lot more. Each one of our agents is able to close three to five deals or even more per month. So what they do in the year usually is what we do in the year in a month. Even comparing to some of the well-known names in the U.S., this same metric we are also significantly higher.

Redfin is the only close comparable that we see with some of the leading names out there, including Compass and eXp, who are also hovering around five-seven deals a year. The next section coming to renovation, our renovation is operating under the name DreamArt. We offer premium renovation services as the main contractor to help customers realize their dream home. Customers usually follow four simple steps to actualize their dream home. One is that they can book a consultation with us to share with their vision. And of course, in the process, we translate their vision into ideas, into cohesive designs. We also have an in-house team of project managers.

Unlike many companies out there who operate on a freelance model whereby one person acting both as a sales, as an ID, as well as the project manager, that model usually leads to a lot of cost overruns or a lot of inexperience causing issues with design, but for us, we are a team of professionals that specialize in the field. That's why we're able to manage each and every project so well, so we have a specialized team of project managers to ensure the timeliness of delivery and the accuracy of what we are building for the customer, and lastly, we have a dedicated team to watch over every detail so you will be handed a beautiful home on time, and we are particularly proud that we have been on time for the past two years due to our strict control on design, quality, cost, and timeline.

For the renovation sector, specifically in terms of numbers, in the third quarter of 2023, we have signed close to $1.5 million worth of contract. Compared to the same period of last year, we have seen a 400% growth. For the first nine months combined together, compared to the same period last year, the number, the growth is 286%. This is mainly due to a focus on higher-value customers and also improved deal flow for the high-end residential and commercial projects that we have taken in. We have also built interesting tools and features for our customers to pre-generate their ideas and basically help them with mood boarding before they come for consultation. One of which examples is this, that this is the original photo that's on our listing. We are able to use AI to regenerate in the style that we want in HD.

As you can see on the left side, this is what the homeowner takes, and this is what's generated as one of the styles. So on all of our listing page right now, you can actually click on this icon and try it out for yourself. And this is actually a feature for free for everyone to use. This is a tool that it's available for everyone to use and try it out. So this is an example of this listing has been sold. So the listings tend to stay very short life on our shelf because we sell them quite fast. So this is one listing. As you can see, you can select in multiple styles and you can see it beautifully designed in different styles. So all of these are done by AI, and then you can reimagine your home in the way you want it.

So to the next segment, which is Ohmyhome Property Management, this is a segment that is also actively growing. It is a tech-enabled property management company in Singapore with a recurring revenue stream from facility management businesses, which means that it manages the security, the cleaning, the repairs of all of the common facilities, the facade, as well as doing the accounting, as well as bylaw enforcement for the MCSTs, which are the equivalents of homeowners associations in Singapore, but they are for condominium projects. They are high-rise and high-density projects in Singapore. So currently, they're managing over 30+ condominium projects. And this amounts to more than 9,000 units now under their management. So this is an impressive growth just within three years of inception. And what it means to the bigger part of the business is that they provide valuables.

Sorry, let me just go back and reshare the screen. Okay, there you go. Now it's full screen, easier for everyone to see. What it means to us is that it actually provides a higher-end customer base for us to target and market to, which provides us with two to four times of what we had in the past in terms of brokerage revenue per sales transaction. In terms of renovation revenue, it is also two times higher compared to what we had before. And this is a huge customer base for us to nurture and for us to provide our service to. They are also a mobile-based property management service, which with 100% paperless workflow. All of the task management, the backend contractor management, documentation all happen at the backend.

What’s happening in the front end for all the home users is that they are able to book all kinds of facilities. They are able to submit all the forms, make payments for various service requests, all of it on the phone. So this allows them to look at our advertisements and look at and engage all of these services on a day-to-day basis and allow us more chance for conversion. They are also a company with smart integration capability. They have integrated multiple IoT solutions, including visitor management systems and license plate recognition systems, and this is also because of the introduction of technology, they’re also allowing their customers, which are the MCSTs, the homeowner associations, to reduce costs and improve the staff productivity on site.

In terms of numbers, the units under management is an indirect indicator of their revenue growth because usually each and every single unit that we manage represents a monthly recurring fee that we are able to collect from individual users. As you can see, over the past few years, they have been growing steadily from around 3,000 units in 2021 to right now, the latest number is hovering at over 9,000 units. This represents a 34% increase compared to the last reported figure in December 2023, which is 6,700 units. This provides us with additional recurring revenue and customer base for our brokerage and renovation services. Around 1,500 units were newly added in October and will contribute to revenue growth in Q4 2024. These are some of the projects that we have recently been appointed in the third quarter.

In the third quarter, this is Affinity at Serangoon, which is a huge project that's sitting in the heartland of Singapore. We also have Parc Mondrian, Stirling, Watten Residences, and LIV Residences. As we grow further, we will start to acquire more and more all of these condominium projects. And as a matter of fact, we start to encounter many partners and many customers who happen to be residing in our condominiums, in the condominiums that we manage as well. So as we grow, this will provide additional recurring revenue and customer base for our businesses. Our three key drivers for our short-term growth are, firstly, to aggressively grow our top funnels, to aggressively grow our top funnels by increasing our condo acquisition and unit under management of our property management business. And secondly, increasing B2B partnerships to grow new funnels for customer acquisition.

Secondly, we have all of our tools, including Homer AI, as well as MATCH to be able to nurture our clients 24/7, answering questions promptly without increasing headcounts. And lastly, and also engaging customers from earlier stages of life cycle, so we are able to convert them to become our paying customers. And lastly, we are also working to increase the conversion and market share in the condo market by better nurturing via AI to result in higher conversions for our customers. And also to increase our market share in the condo market, this also means that our revenue that comes from the market will be two to four times of what we had in the past when we were focusing on the HDB market.

The second point of our three key highlights for our investment is that our business is actually highly profitable at scale. And this is actually 13x of customer lifetime value. So allow me to explain further what I mean by that. So compared to traditional brokers or a lot of tech-enabled brokers out there, we are very different fundamentally in terms of our business model. So most of the agencies out there here in Singapore and Southeast Asia, what we do is that when one commission comes in, let's say it's SGD 10,000 worth of commission, typically what happens is that 90%-95% of commission will be paid to agents because each agent are essentially freelancers and they manage their own expenses and the customer engagement.

Whereas for us, because we are a team serving the customer, we are able to retain much higher in terms of gross profit that we have. So our gross margin usually hovers around 50%. And then the 50% that we pay out are usually inclusive of all of our agents' salary, our co-broke agents' commissions, our incentives, as well as property listing expenses. So this is a significant improvement as compared to the typical model where our gross property margin is 5x of what a typical transaction has. And then in order to achieve SGD 10 million in brokerage gross profit, usually for these kind of cases, they will require 10,000 deals. But for us, we only require 2,000 deals. So we are able to achieve profitability with much lower amount, much lower number of deals.

Then for the traditional model, usually it's hard to get into. It's hard to reach further down the funnel to be able to engage customers for other services because usually it conflicts with agent side interests. For us, because we work as a single team and we also actually provide services to the customers directly, we are able to earn typically SGD 40,000 worth of gross profit coming from renovation deals. Our renovation deals hover around SGD 200,000 to sometimes even as high as a SGD 1 million contract. In terms of the revenue that's coming from property management business, it's usually at SGD 400 per year per unit.

So adding all of this together in terms of gross profit, we are seeing around close to SGD 13,000 in gross profit for one single customer that's coming to us as compared to only SGD 1,000 gross profit for one customer that's being transacted by the traditional model. So throughout this whole cycle, one customer is worth 13x more compared to the traditional brokerage model. And that's why we have a very highly profitable business when we are reaching at scale. And lastly, we are also currently trading at a relatively low valuation multiple. And what we are trading at currently is at a revenue multiple of 1.3x. So what happened recently in the industry is very interesting. PropertyGuru, which is another listed company as well, coming from Singapore.

And then they were recently acquired by EQT, which is a private equity firm with a valuation of $1.1 million. So this is actually close to nine times of their 2024 projected revenue. So this multiple is actually significantly higher than what we are trading at, but partly could be due to the fact that, due to the fact that we don't have a lot of people know us yet. So as we market ourselves more and more to more investors, hopefully this will be spread out to more investors out there to know that we currently have a low valuation multiple compared to what's happening in the market. So these are the three key highlights I would like to just reiterate once again. One is that we are a high-growth prop tech company. Secondly, we have a very highly profitable business model at scale.

And lastly, we are currently undervalued as compared to what we are seeing in the industry. So in terms of our long-term growth strategy, our core focus is still on increasing market share in the existing market and expand our geographies. Secondly, is to acquire and partner with companies who are offering a source of growth. And lastly, increase our service offering so we can become a property super app. Our company is also managed with a very experienced board and management team. So Rhonda and Race are our CEO and CEO respectively. Sitting on our board of independent directors, we have our chairman, who is David Loh, who is also the chairman of Centurion Corporation, which is a well-known student condominium developer and manager for student accommodations around the world. And it's also a listed company in Singapore.

And he's also a director at Grab Holdings, another well-known tech company in Singapore. And then we have Mr. Lee Wei Loon, who is our Audit Committee Chair, who is the CEO of WatchBox Asia, which is a luxury watch marketplace. And he's also the former director of investment banking division at Morgan Stanley Asia. We have Mr. Lim Kuan, who is the chairman of the nominating committee, who is a partner at Eldan Law. And lastly, we have Mr. Galven Tan, who is our remuneration committee member, sorry, our remuneration committee chair, who is currently the CEO of Knight Frank Singapore, another well-known property management company in Singapore. And he was also the former deputy managing director at Savills. So now we have come to the end of our presentation. And now we would like to open the floor for any questions that you may have.

Rhonda Wong (CEO)

Hi, Allen.

Leo Li (Director of Finance and Head of IR)

Together with us, we have one of our analysts on the call, Mr. Allen Klee from Maxim.

Allen Klee (Equity Research Analyst)

Hi, can you hear me?

Rhonda Wong (CEO)

Yes.

Leo Li (Director of Finance and Head of IR)

Yes, we can hear you.

Allen Klee (Equity Research Analyst)

Oh, hello. A couple of things stood out. One, I heard you say that you increased your cash levels. I was curious how you were able to do that.

Leo Li (Director of Finance and Head of IR)

Well, as we have mentioned in the presentation earlier, that we are very focused on, of course, our operating efficiency. What happened is essentially we have closed a lot more deals, and we also have closed a lot more renovation contracts that allow us to build our cash flow in the short period of time. Also our losses have been reduced significantly due to some of the initiatives that were taken in the second half of the year. That means in terms of—sorry, Allen, yes.

Allen Klee (Equity Research Analyst)

No, go ahead.

Leo Li (Director of Finance and Head of IR)

I also saw Derek asking some elaboration on the cost optimization. So this is not rocket science. Essentially, is that we have looked at all of our internal headcount. We have looked at all of the resources and spending that we have. We have optimized them to make sure that every single dollar and cents are being optimized and achieved the ROI that we want them to achieve. And we have directed some of the resources into marketing so that we are focusing on generating revenue and growth as well. So this is the results of both an increase in sales and revenue that we're seeing in the third quarter, as well as a reduction in the cost that we have been spending.

Rhonda Wong (CEO)

So our acquisition into property management has assisted us as well.

With the thousands of units under management, we're able to better offer our services without engaging into every single customer acquisition cost for each of these conversions. We have also increased our partnerships. So we've partnered with various partners, even from FMB coffee shops to different finance insurance partners. And this has helped us increase our lead generation as well. So in the past, before all of these activities, as you can imagine, all of our acquisition will have to be done via a lot of paid marketing. So as a company running into our eighth year right now, we're definitely looking into how we can generate more activities to increase our organic reach into customer acquisition. So we are currently the highest-rated brokerage PropTech company in the entire country, or even in the region that we're in, in Southeast Asia. We have over 8,000 five-star reviews.

So, one of the slides that we had with all the top brokerages where we are in Singapore. You'll find that if you search their reviews, they would not be very. It would not be comparable to Ohmyhome. And the reason is exactly why we started Ohmyhome, because actually in the industry, there are a lot of complaints about agents, dishonesty, opaque information, costly services. So we created Ohmyhome to hopefully be able to better serve our customers. And thus far, we have done that to a large degree. Where we need to keep growing is to ensuring that our good services, where we're able to sell faster than almost any other company in the market, we're able to transact faster, we're able to achieve higher prices.

We have achieved these items in terms of KPIs, but what we haven't achieved is that we have not reached out in terms of our marketing, our branding to the rest of the market. As you can imagine, if you are selling a home and you know that Ohmyhome can sell it faster and at a higher price for you, it's quite a no-brainer to engage us. If you're renovating your home and you know that we can be on time, we're cost competitive, our designs are excellent, again, it's a no-brainer to engage us. So definitely our goal as we continue to cost optimize is also to expand our reach more organically so that we don't have to keep increasing our marketing costs linearly. And with that reach, we would like to be able to keep reporting to you stronger numbers and be profitable.

Allen Klee (Equity Research Analyst)

Can you.

Leo Li (Director of Finance and Head of IR)

We have another question. Sorry, Allen.

Allen Klee (Equity Research Analyst)

I was just wondering if you could give us some commentary on the Singapore housing market overall and the economy.

Rhonda Wong (CEO)

The Singapore housing market is generally very vibrant. And the reason it is so is because there has been a lot of government regulations, pricing control, tax control to ensure that the market doesn't get overheated. So what happens, how can it be vibrant when it's controlled to not be overheated? So what happens here is that over the last 10 years, the government is trying their best to make sure that Singapore doesn't become a speculative property market. So over the last 10 years, what has happened is that most real estate owners in Singapore are very cash rich.

That means that in the event of higher interest rates, in the event of a not-so-good economic situation, there is no need for anyone to force sale their homes or sell at a huge discount. So most of the time, because of the taxation here, property owners today who own multiple properties tend not to dispose of their properties. They will dispose of other assets because it costs them more in future if they wanted to acquire the property again because of the way tax works in Singapore. So that's one part. The other part in terms of the market is that overall, when the interest rate and the interest rates are high across the world, generally Singapore interest rates are quite low. So when it was high, we were high for us is about 3%-4%. And then low for us is about 1%-2%.

We're seeing interest rates coming down. We're seeing more activities as well. Overall, in the market, in terms of the Singapore transactions dynamics, where it comes to our business, we're not quite concerned if the market goes up or down as long as there's transactions. In Singapore, there's about 40,000 sale transactions a year. You can estimate another 100,000 of rental transactions. Now, this number, obviously, compared to if you were in the States or some of our listeners are from India, it's a very, very small number. The beauty of Singapore is that it's one of the most expensive real estate cities in the entire world. Every transaction actually is worth a lot to us. A government property would cost about $350,000. 80% of Singaporeans live in there.

And then the private properties would easily cost you anywhere between $1 million-$5 million per property. And we're talking about multifamily homes that are quite small. About 2,000 sq ft would be considered as quite a comfortable size home. So that's the property scene in Singapore. And what we're seeing is that with the interest rates coming down, we're definitely expecting more activities. But either way, the transaction volume has still been quite healthy over the last few years that we've been around. In fact, we started at the worst time of the market in 2016. So this was off the back of the first government huge taxation on property purchases. But we wanted to start then because we felt that if any help was needed in the market, that would have been the best time.

That was why from the time we launched Ohmyhome, within four months, we became the number one prop tech player in the market. We're still working hard and looking to continually spread our brand, our efficiency, our services in terms of the one-stop shop and be able to gain more customers across the region. Derek was asking if the higher agent GTV is on lower transactions, is it due to more condo transactions? Definitely. With the acquisition of the property management arm, we're definitely seeing more condo transactions, more condo customers with us. That is on the part of the acquisition. But separately on the marketing front, we are also actively increasing our deal value per transaction. That's why you heard Mr. Leo Li previously sharing about how our renovation deals are getting larger because we're dealing with higher net worth, higher value renovation deals.

So these days, we tend not to, we tend to only work on renovation deals that are above $200,000 per contract. We find that we do very well in that category and upwards. So that's what we've been busy with. So when we are growing the department, even I myself, with my co-founder Race, we're very hands-on in terms of understanding the market, the materials, the customers that come through because we're very determined to grow DreamArt into a much larger and famous renovation firm.

Leo Li (Director of Finance and Head of IR)

All right, Allen, do you have any further questions or comments?

Allen Klee (Equity Research Analyst)

I think you mentioned this, but if you could highlight kind of how the combination of using the property management business and your AI tool have been able to grow business and where you think you are on that in terms of the opportunity of continuing to do that. Thank you.

Rhonda Wong (CEO)

Thank you, Allen. It's a good question on top of Derek's question about Homer AI. The beauty about Homer AI is not just because it's trendy in the AI world. I was just in LA and Vegas two weeks ago, and we were actually in conversations with some of the PropTech names that you saw on the slides. We're actually pretty good friends, so we're always exchanging ideas. The beauty is that the AI that we have already implemented in Singapore in Ohmyhome; it's actually not seen and not available in the States. So since the time we listed, I know a lot of questions that came in before was about how are we expanding into the States as well. It's always definitely a work in progress because it's a much larger market for us to apply a good technology.

Homer AI, the beauty about that is that, of course, in the construction and the building of Homer AI, it costs us a lot. Why does a company that runs such high gross margin businesses across all streams continue to run losses in the past eight years? The reason is very much because the building of this technology is very expensive. When we build this technology, whether it's for 100 users or a million users, it costs pretty much the same except for server costs, right? But the building of it in terms of the tech development cost is pretty much the same for us. The beauty of Ohmyhome and the Homer AI technology is that we have built it. It's ready. Right now, we have this amount of users that's currently using our platform, 10,000, 20,000, 30,000.

But whether it's 10,000 users, 30,000 users or a million users, the platform actually becomes more and more alive the more users we have. And what it does for our margins in the future expansion is that the conversions become more affordable. Why? Because these are people who are not looking to sell their home today, but they're on our platform. They're getting nurtured. They get information on their property. They get information on their valuation, articles on what they should be doing about their property. What's the best time to sell? How's the interest rates going? Do you want a better mortgage package? So all of these extremely useful tools are constantly available to them. And in the event someday that they're looking to sell, they have all the recent transaction prices, the current market asking prices.

We would like that in this conversion journey, they will then choose Ohmyhome as the company to sell, buy, or rent for them. What we have seen in the past eight months or so of running Ohmyhome very aggressively this year is that it has helped us with our conversions. Is it making our conversions a lot cheaper? I wouldn't dare go as far to say that, yeah, it's so much cheaper now because the number of users, we're still growing it. We need to continue to grow our users such that you will see the results as a company will see the results in the future.

In the idealistic world, if we can get, for example, the entire Singapore homeowners on Homer, then obviously at the time that they want to sell or renovate, we are constantly in their lives without them having to pick up the phone to call their agent or their friend or someone who's more knowledgeable than them. That's what we've been working on this whole time. We are actually solving our solutions stemming from problems that frustrate us ourselves. You can imagine as we run a team of agents over the last eight years. Before Ohmyhome, I was also working with agents. Some of the frustrations we have is that good agents are rare indeed. There are good agents, but they're not the majority.

So what happens with that is that if they are good agents, what we define as good agents is they're prompt, they're good at closing, they love their customers, their customers love them, they're honest, they're actually good at their job, but after all, they're humans too, so they can't be replying to messages all day, and they may not always be accurate, so where AI comes in is that anytime you're looking for the answer, so for example, if you ask an agent of yours, a broker of yours, wherever you may be, the question of, "What's my recent transactions?" The answer will be like, "Hey, it's hovering about this price, and let me check.

Let me get back to you," but on Homer AI or any of our Ohmyhome tools, you'll find that when you ask this question, you immediately get a list of the answers, and these are accurate answers. So that's the beauty of AI, which is that we want to answer accurately. We want to answer round the clock, well, so then what happens to our agents and brokers, right? What happens to them is that they then spend all of their time more committed and more dedicated to sales closing. That means the part of the journey that a consumer just prefers to have a human involvement, and of course, where we're heading towards is that this human involvement, it's not as necessary as before, so have we required a human agent involvement in the past at 100% of the journey?

Today at Ohmyhome, you probably only require an agent 30% of the time in your entire 100% of journey. So assuming from the time you think about selling to the time you complete your sale is 100% time, today you probably need to see our agent 30% of the time or less. So that's where we're heading with our technology, where you need them less, but you actually have more accurate information, better services. So we're very determined to continue building this. And again, the solution stems from the frustrations and the problems in the market. So we're still very passionate about our business, and we want to grow this. We want to expand this beyond our shores of Singapore Island. So that's what we're working on every day. It's a very, very fun job for us.

I know sometimes, if some of you are investors, it might be quite disappointing, right? Looking at the company you invest in, not doing so well in the stock price front. We may not be able to actively do much about that. I see a question about how do we attract new investors. Apparently, we haven't done that very well. But what you can be very assured of is that we're 100% committed in winning this game, and we're 100% committed in having more customers, if not all customers, be with Ohmyhome at some stage of their journey.

Leo Li (Director of Finance and Head of IR)

Right.Thank you, Rhonda. But to add on to part of the question, to answer your answer, right? One of the questions that I think Allen was asking was regarding how these two products are integrated with each other.

This is on the right side; it is actually a screen of the application of Simple App, which is the condominium app that's being used by the over 9,000 units under management. On this app, as you can see, you can book various activities, look at announcements, [and] requests for services. Then at the bottom right corner, you can see Homer AI. This is where you can click in and start registering your home. Here is a hook that we can hook the homeowners to let them have a price discovery process for their home. A lot of times, actually, most people may not think actively about their home or thinking about selling the home because they do not know what's the latest price of their home.

And after the price discovery process, and this is actually an important hook for them to get connected to Homer AI, and that's how we convert users from this platform to our platform. And as a matter of fact, we are also getting this two-platform tool to be more and more integrated so that in the future, it could potentially be so highly integrated that you can just connect one app to another with ease. Right. So to answer, I think, Linda's question as well with regards to what we're doing to attract new investors to increase press release in the U.S., yes, we would very much like to resonate what Rhonda mentioned. But the core focus of us is still on the business itself and focusing on executing our strategy.

As some of the investors here may know that actually going for conferences and all of that is a relatively costly process for us, unlike companies in the U.S., whereby they can just fly and drive around the U.S. but for us, flying over their accommodations and everything that could cost quite significantly and cause quite a strain for us. We would rather focus on investing that on growing the business, which will return long-term value for all of our shareholders here instead of having to rely on external funding to help us continue to fund the business. So this is a very important focus for us, but that means that we still will be increasing our exposure. So the press release regarding this webinar has already been out.

Do stay in touch and then follow all of the socials that are at the bottom of the press release to follow our latest updates. From time to time, we also provide updates on our business via our LinkedIn profile, via our Twitter, via our Facebook as well as Instagram. Do follow them and see what's happening with us and then what we are doing. Sometimes we do have some exciting things that we are going to uncover in Singapore as well. Do stay in touch and do follow us on all of our socials to find out. All right. I think that our time is running short, and we need to conclude the session. Thank you, Rhonda, and thank you, everyone, for attending. Thank you, Allen, for your questions. And that.

Rhonda Wong (CEO)

Thank you, everyone. Do check out our latest videos that we've done for the United States. We put some properties in LA, and we have just released those videos. Do follow us for all of the different updates that we have done at Ohmyhome. It's been exciting. We've been quite happy with our work here. We hope to see you again at our next update.

Leo Li (Director of Finance and Head of IR)

All right. Thank you, everyone. For any questions or any further information, feel free to visit our website at www.ohmyhome.com and our investor relations website, ir-ohmyhome.com. And if you have any questions, feel free to email to [email protected]. Thank you and have a great day.