The real estate business model has primarily been dependent on interpersonal interactions between various stakeholders – seller, agents, financial institutions. As the times change, the business has to evolve or perish, and the growing demand of the dot com generation resulted in the first wave of PropTech – property portals, which gave a unique platform for customers to view multiple properties without leaving the comfort of their home.
This disruption helped not only the end customers, but the developers and channel partners who could easily get customers searching for properties. However, with adoption of smartphones and 3G/4G revolution, and affordable data rates have resulted in the need for a better and convenient way for customers to buy or shortlist real estate through various parameters (accessibility/location/amenities/budget/ ready to book etc.) on their fingertips.
The immediate barrier is a one-of-a-kind event in human life. The COVID-19 pandemic, which has led to prolonged lockdown, has restricted customer movement to project sites, thus, delaying home buying. The developers’ staff has also been confined to work from home. Hence, new ways have to be adopted to engage customers going forward.
With sales dwindling even in auspicious time of Gudi Padwa and Akshay Tritiya this year, the current sentiment of real estate stakeholders is at an all-time low score of 31 as per FICCI-NAREDCO real estate sentiment index for Q1 2020.
Consumers have already accepted buying what they want online, with ease of market place giving customers freedom to choose through multiple options and secure payment gateway. This has created multiple unicorns in the Indian ecosystem. However, the same doesn’t hold true for the Indian real estate sector where the convenience of buying or selling homes online is still missing. Current solutions only offer limited information on projects online.
Customer while buying, selling or renting property have to go through extensive paperwork and processes between multiple stakeholders spread across housing finance companies and developers, leading to unnecessary extended transaction time and cost.
Even before this pandemic, the Indian real estate was under stress. Project finance servicing cost, continuous depletion of margins, increased cost of acquiring a customer, and extended transaction timeline were some of the biggest pain points that the developer community currently faces.
Real estate being the second-largest employer in the country faces multiple resource challenges. Lack of attracting tech talent, dedicated tech team, huge IT Infrastructure cost, significant duration of project lifecycle, payment realization time are some of the key factors which limit solution offerings.
PropTech the enabler
According to multiple reports, 95 percent of customers globally search for homes through online platforms and almost 51 percent buy homes, which they found using online platforms.
Going digital and selling online is the way forward in the continuous evolving customer behaviour. Developers need to give customers a holistic experience of their projects, wherein customers can easily engage and interact with projects at their fingertips.
PropTech has enabled access to usable information of projects, providing customers multiple options to choose from, thus, bringing fairness and competition and resulting in advancing the ecosystem.
The next wave of PropTech brings in Artificial Intelligence (AI), Virtual Reality (VR), Augmented Reality (AR), Machine Learning, and Deep Tech, which enhance customer home-buying experience, developers can now easily engage with customers through these technologies, which will significantly reduce transaction time and cost.
Virtual home tours and virtual site visits are new basics of the customer home-buying experience. Virtual site visits give the customer the full freedom to understand and interact with the project, the project location, project accessibility, places of interest nearby, project amenities. Customers can view and interact with specific property and in case a customer likes a particular property, they can easily book the property online then and there with secured payment gateway; just like buying it from any of the other marketplaces.
This process makes the entire home-buying easy and convenient. A customer can undertake these virtual site visits without even leaving the comfort of their place at their own convenient time, directly from their mobile or internet-enabled device. Coupled with video call integration, customers’ queries can easily be addressed by developer sales professionals.
Project drone shoots, project and property walk-throughs, and AR-VR delivers rich customer experience and information, which helps customers take informed and timely decisions on real estate investments.
The power of AI, ML and data analytics make developers understand more about customer preferences/requirements and making them more competitive by delivering customized offerings. With the use of AI/ML/Data Analytics, developers get deep understanding of customer buying, which leads to increased margins that are critical in the current times.
PropTech, hence, is a disruptor as it removes the legacy systems of home-buying and business models, which involved multiple stakeholders, and brings in increased transparency by bringing buyer and seller together.
By adopting secure cloud platforms, the developer can reduce their IT cost as much as 30 percent, the data stored on these platforms can then be accessed from anywhere anytime. Team collaboration on these cloud platforms bring in more productivity and developers get access to qualified tech teams who continuously innovate to meet business objectives and implement technology to solve real world business problems.
With the ecosystem in place, developers can utilize it to reach out to bigger audiences and have more stakeholders on a common platform to drive business.
Industry leaders consider PropTech as a game changer that needs adoption due to ever-changing dynamics of the business, keeping customer experience at the forefront.
Indian real estate market & potential
Indian real estate is the second-largest employer in India and contributed about 8 per cent to India’s GDP in 2017 and is expected to contribute 13 per cent to India’s gross domestic product (GDP) by 2025, according to a report by National Real Estate Development Council (NAREDCO) and Asia Pacific Real Estate Association (APREA). Indian Real estate is also expected to reach $1 trillion by 2030 and become the third-largest globally.
With this current pandemic, PropTech adoption has already been triggered in the Indian real estate. However, to reach such staggering numbers and meet the demands of ever-changing dynamics of businesses and continuous evolution of customer behaviour, PropTech is the way forward. It can provide customer-centric convenient platforms for customers to interact and engage with real estate projects and give real-time insights to developers, who can then present tailor-made offerings.
Article by: Pankaj Narang
Image by: bantersnaps