Builders Called the Shots, Not Anymore!! Internet Heavily Influences Real-Estate Decisions In India

Builders Called the Shots, Not Anymore!! Internet Heavily Influences Real-Estate Decisions In India

From security risks to connectivity, real-estate sites are filling information gap for buyers 

With a rising number of property portals entering the market, the online real estate business is expected to improve gradually as these websites bring transparency by providing high quality information about projects, believe industry experts.

Property portals are increasingly becoming a tool for research on buying, selling and leasing residential or commercial properties in many parts of the country, as the amount of information listed on these sites is increasing. 

In a first of its kind survey of real estate transactions being influenced by Internet, Google India has come up with some interesting findings. Picture this: Right now, $43 billion or Rs 2,58,000 crore worth of real estate transactions are being directly influenced by the Internet!

Considering that India now has the world’s 8^th most expensive office location, these new findings on Internet influencing real estate transactions is certainly a very exciting to observe and analyze.Nitin Bawankule, Industry Director, Google India said, “It is estimated that the real estate industry will grow to become a 140 $ billion by 2017 and the Internet audience base is expected to reach over 450 million by then. There is tremendous opportunity for both online real estate aggregators, brokers and developers to engage the buyers online by providing rich, meaningful and immersive experience to buyers on the Internet, including mobile ready online assets as the trends are consistent both in metro and tier 2 cities.”

Some of the interesting findings from the report: 

1. Organized retail market in India will double by the time 2017 ends. Right now, its $79 billion which will become $140 billion by 2017. Overall, 75% of real estate transactions are of residential nature and 25% is commercial.

2. 53% of overall real estate transactions are being influenced by Internet today, which makes it $43 billion worth of real estate deals. $31 billion worth of residential real estate and $12 billion worth of commercial transactions are right now happening on the Internet!

Why does a person go online to search real estate? Because they are now more informed and aware. 52% of Internet users want ease of comparison between different real estate properties; 49% want an easy access to contact details of owners and developers; 60% want easy access to in-depth property information and market trends and 43% wish to have easy financing and processing documents. This is a goldmine of information for anyone wishing to start a new real estate company!

A. 89% of the targeted audience of real estate developers are already online (households worth more than Rs 5 lakh annual income)

B.  If given a choice between different sources to find information, 53% of them chose Internet meanwhile 54% chose newspapers and 52% chose broker/developer’s office. 

C. When asked about the brand recall value among real estate advertisements, it was found that 58% of respondents remembered newspaper advertisements while 49% remembered Internet advertisements.

Based on this survey results, Google India has some pretty solid recommendations for those who in this business of real estate:

• Focus on mobile platform; create apps and make a mobile presence
• Go beyond Tier 1 cities as Tier 2 cities are equally active in real estate research and purchase
• Create rich and engaging content for best results
• Focus on both primary and secondary real estate markets as there is very less difference between new property and resale property

Do you check Google before buying a real estate asset? If you don’t you are actually in the minority!

When Sameer Rana was looking for a dream property last month, he was spoilt for options in the real estate market. Yet the 44-year-old investment banker was not sure whether he had all the information to spend .

`2 crore on an apartment. “Is the area safe? Are the nearby schools good? Will the builder give possession of the house on time? All such questions worried me and I did not have the time to go through every property myself to decide,” Rana said, adding, “Brokers could not be trusted.” Like most potential homebuyers, Rana felt he had skewed and incomplete information that was supplied mainly by the builders and brokers. But now online start-ups including Housing.com, PropTiger and CommonFloor are setting up their own teams, data science labs and open forums to provide such information. 

“Technology and analytics will be the biggest differentiator and game changer in the online real estate industry in the future,” said Rahul Chowdhri, partner at Helion Venture Partners and an investor in real estate portal Housing.com.

Softbank and Accel backed PropTiger has collaborated with social enterprise SafetyPin to provide information regarding safety quotient of new projects in Delhi and National Capital Region. “The parameters used to come up with this score include presence of street lights, visibility of vehicles, crowd at important times and access to modes of pub lic transport, among others,“ said Prashan Agarwal, co-founder of PropTiger, which is set to expand to other cities soon.

Its larger rival Housing.com was the first online real estate company in the country to launch its in-house data science lab in 2012. The portal focuses on lifestyle rating, locality scores, connectivity scores, child friendliness index and price heat maps across categories including rentals, resale, paying guest accommodation and new projects across 40 cities.“The real estate industry has forever lacked an authentic source of information which gives deep insights to people, using accurately collected data,“ said Advitya Sharma, co-founder of Housing.com, which has more than 500 people in its data collection team. “Our algorithm takes into account the most basic needs and sought-after luxuries, and weighs them according to their importance. We use around 50 parameters to get this data.“

Real estate start-ups are also aggressively focusing on new projects since they expect this segment to generate most of their revenues in the coming years. “The average subscription fees the developers generally pay is about Rs 3 lakh per quarter, per pro ject,” said Sumit Jain, co-founder and CEO of CommonFloor.com. The company’s portal hosts an open forum for users to exchange feedback and queries on new listings and properties. “Sometimes our builders come to us to request us to pull out customer complaints, but we ask them to resolve with the customer directly rather than interfere,” Jain said, adding, “It may hurt our business in the short term but it helps build trust in the long term.” Experts say the Indian industry is likely to see a lot of consolidation in the next few years following the trend in established markets. 

Ref: An ET Article & A Google Report