Dec 12, 2016

Demonetisation, slump or a market slowdown, real estate is the first sector to feel the heat, but, emerges a winner every time. A sector that is heavily invested in is still fragmented with many unorganised players operating in the market. But, the government now aims to streamline the sector by using corrective measures like Real Estate (Regulation and Development) Act, 2016 and even, demonetisation to an extent. Along with government’s corrective measures, the online boom also reached the real estate sector and thus, made home buying a more transparent and smooth process for many aspiring buyers.

Interestingly, across top nine cities of India that are high on real estate, almost 75 per cent of home searches now start on the Internet. This is largely thanks to the mass proliferation of the smartphone.

A decade ago, this level of 75 per cent was zero, when one used to visit the neighbourhood friendly broker to start a home search, and hence, has increased by 5-10 per cent points each year. Hence, if any seller — be a developer or a sell-side broker or the end-seller herself — wants to stand a chance of being noticed, she has to go online.

Classifieds companies, which list sell-side properties and to-be-rented properties, have sprung up in the past decade, and are working towards bringing the supply of properties online.

With many professionals now involved in the business, the question arises as to who all are part of this ever-growing value chain. So, let’s take a look at what does really make the value chain of the online real estate:

Research & consultancy

This part of the value chain is driven by data science players who study the market trends. These are research firms and consultancies who heavily invest in market research in real estate sector and bring forth numbers that showcase the current market state across markets and forecast as to how the market would perform in the coming times. These research reports help homebuyers understand the market better and make a decision, accordingly. It is said that this segment has a networth of $50 million in the total value chain and is dominated by global players. Of the Indian names, PropTiger.com has its research arm called PropTiger DataLabs.

Listings

Contributing nearly $100 million to the value chain, this segment includes online platforms that list properties, both for sale and for rent; generate leads; and also, help developers market their brand and projects. This segment, which has plenty of domestic players, is fragmented as many players deal in real estate exclusively while there are also players that list products and services across sectors. These listing are made by brokers and these sites act as a platform for the brokers.

Brokerage & advisories

Standing at a networth of more than $1 billion this segment has only a few online platforms like PropTiger.com, which are focused on buying and selling only, and are an integrated end-to-end advisor, starting from online and then moving into offline with an army of dedicated relationship managers in the top nine cities of India. These managers will call you, once you leave a requirement on their website, show you a choice of properties in your preferred locality, negotiate with seller on your behalf and help you sign the Builder Agreement or the Buyer-Seller Agreement, in case of a resale property. This segment is also riding high on technology, providing homebuyers with the best of home buying experience. They are using technology like three-dimensional walk-through and even Virtual-Reality methods to give the home buyers a next-to-real experience of the property as well as the locality.

This segment includes primary sales, resale and rentals.

Home loan facilitators

This segment of the value chain is key for the ones who decide on buying a property. There are platforms that provide multiple home loan options in one go allowing home buyers to choose the option best-suited for them . This includes companies that are providing home loan advisories and also, acting as an agent of helping home buyers get the best home loan deal. Now going further, just being online will not help a seller achieve success. The intent, from here on, should be to move as much of the decision-making of the buyer online, too. Many smart developers have started presenting their projects online making use of technology including three-dimensional or 3D views through Virtual-Reality or VR. This technology aids interactive walk-throughs and interactive locality overview. The more information that prospective buyers get on the project online, the more they can visualise what the end-project would be like, the higher the chances of them converting from a prospect to a buyer. And soon, a majority of projects will have to present themselves in such a fashion, and 50 per cent of decision-making of the buyer will be completed online itself.