Real estate goes online

Proptech companies are changing the way people approach real estate transactions, making each one quicker and more transparent, writes Ruth Dsouza Prabhu

It’s a given – if there is a service that can be availed of online, we are going to make use of it. This can especially be said about the real estate market going online. If you are looking for a home, or would like to put your home out there for rent or purchase, online portals that facilitate the same are going to be your best bets to close a deal soon.

The proptech space, a blend of property and technology markets, has made it big in India. Across the Asia-Pacific region, India is one of the most dynamic markets for proptech and has reported the most number of deals since 2013, according to the recent report, ‘Clicks and Mortar: The Growing Influence of PropTech’, jointly authored by international property consultants JLL and Tech in Asia.

Ramesh Nair, CEO & country head, JLL India, says, “According to the report, India is ahead of other regions in terms of the number of deals currently standing around 77 deals. Additionally, India stands second with deals amounting to USD 928 million followed by South East Asia, North East Asia, excluding China and Hong Kong and Australasia."

Now, of course, these proptech deals have had and continue to have a significant impact on the real estate market. Let’s take a look at how it all works.

What drives proptech in Bengaluru?

Giving us a bird’s eye view of the real estate market at present, to begin with, Sudhir Pai, CEO, Magicbricks, says, “The IT and the software development industry has been the prime driver for economic growth in Bengaluru and now, add to it the start-up and the e-commerce industry as well. This, in turn, has resulted in a huge demand for residential and commercial real estate. While the residential real estate is driven by end-users, there has also been a strong uptick in commercial space absorption. The number of active property seekers in Bengaluru has gone up by 17% in the last quarter (Jan-March) of the fiscal year when compared to the same period last year. What is also encouraging is the fact that there has been a sharp 37% increase in the number of buyers searching for luxury properties (>1.5cr) during this period."

Explaining how the market takes a natural step forward, Akhil Gupta, co-founder, NoBroker.com, says that with increased Internet usage people have realised that there is no point in paying for information that is easily available online. “People have been using e-commerce platforms and classifieds for buying and selling goods for a long while and have now become more confident handling such transactions online. This drives them to look at online solutions for their property and real estate needs, resulting in a growth and expansion in the proptech market. It is faster, hassle-free and more economical means compared to traditional methods."

“As new technologies like blockchain and virtual reality join hands, the proptech market is geared up for the digital leap,” believes Sonu Abhinandan, head, QuikrHomes. “Low ticket-size transactions such as PG and home rentals are major interests for two reasons. One, it provides due diligence between the owner and tenant. And secondly, it provides transparency in the form of property details and facilities when listed. The youthful population and their digital sophistication results in the better adoption of online services and Bengaluru have this combination in abundance. The presence of home-grown proptech start-ups providing specialised services in different spaces like rentals, leasing, PG, etc, has made the market even more organised and consumer-friendly."

"One of the other reasons why people prefer the app/website way to get things done is due the traffic situation in Bengaluru which is deteriorating with each passing day. Young corporate workers prefer apps to get things done even if it means they end up spending a little more,” Narayan Lal, founder and CEO, Brongo.

What will contribute to the growth of the proptech market?

The customer stands to benefit immensely with homes being delivered faster to them, at an optimal price, which meets their various individual requirements,” says Adarsh Narahari, secretary, CREDAI Bengaluru. “Factors that contribute to the growth and expansion of the proptech market will include the growing number of homebuyers as well as a large number of developers who are ready to adapt to latest technologies."

It is not only the developer but also the potential homebuyer who adapts to growing technology. “According to a Google-KPMG report, says Sudhir Pai, “Around 76% of real estate purchase decisions are influenced by the Internet. This has been made possible because of the convenience and wide range of properties available online during the search and discovery process."

At the heart of this business is the fundamental question – how to ease the home buying process? Portals are sitting on loads of consumer data that have helped them understand the preferences and the pain points in the entire journey. Addressing these issues with products and services that serve the different purpose of the consumer has significantly contributed to the growth of this industry.

Elaborating on how changes in the infrastructure and organisation of proptech companies will contribute to its growth and expansion, Sonu Abhinandan says that the following factors will have a major impact:

* Enabling sales transactions in the primary property space due to better transparency from RERA. Builders can reduce brokerage and sales team costs to pass on benefits to consumers.

* In the secondary sales transaction, structured digitisation of property records will enable easier online due diligence, legal activities like registration and paperwork.

* In the rental and PG space, the market is evolving much faster, so it will have a mature product by end of 2019.

* Government policies on digitisation, adoption of block-chain technologies for secure verification and end transactions.

* Shifting of spends from offline to online by builders.

The easy accessibility of comprehensive information, the ability to make comparisons, make informed decisions and browse from the comfort of your home or just about anywhere ensures that proptech services are here to stay and flourish. The addition of secondary services like images, 3D views, walkthroughs and satellite road views, etc, all of this is real-time as well, make these services the top-most choice among consumers.