Technology has permeated into almost all business and industries, and real estate is no exception. While on the one hand the real estate industry has been quick to identify opportunities in adoption of technology, simultaneously on the other hand, the government has been coming up with various initiatives to drive in the same among the industry players.
Some of the marque campaigns of the government are ‘Digital India’, “Global Housing Technology Challenge’, ‘Smart Cities’, “IndiaChain’, etc., that are making the access of technology easier and more holistic.
The real estate industry has assimilated technology in a way that has made it more resilient, invincible and given it a new and vibrant dynamism.
The real estate industry has been infusing technology in its everyday operations to improve the efficiency and quality aspects. To name a few spheres where tech adoption has taken place rapidly are Building Automation, Artificial Intelligence to ensure delivery timeless, improved market access, marketing, using Augmented Reality (AR) and Virtual Reality (VR) for marketing and site visits. Companies are now adopting Big Data and Blockchain in various stages of project execution and also in client servicing.
As per the latest report titled PropTech: The Future of Real Estate in India, by the Elara Group-owned online real estate advisory portal, investments in the PropTech segment in India have also seen an upswing in the last few years. So far, $2.4 billion have been invested in India’s PropTech industry across 225 deals as on date. The report attributes the growth in the segment to a fast-growing middle class, rapid urbanisation, adoption of technology, an increasing internet user base of over 500 million users, a young demographic base and a gradually consolidating real estate canvas.
Startups impacting the scenario
There are a number of start-ups in the industry which are not only disrupting the status-quo with the use of technology, they are also ushering in global best practices in construction and sales & marketing functions. There are many activities like listing of properties which is also being taken up by the industry in a new way which is benefitting the developers as well as the property buyers. There is a lot of innovation and value that these startups are bringing in with the use of technology.
The investment inflow in real estate is growing at a CAGR of 10%, of which PropTech has been a blue-chip segment since 2010, growing at a robust CAGR of 57%.
This can be seen as a demonstration of usefulness of technology in the modern day real estate business. The role of technology will get enhanced as there is faster growth among the country’s middle-class, fast urbanization and increase in the internet user base of about 500 million.
It is technology which has helped the realty industry in recovering fast from the tumultuous period of lockdown and today the sales are almost at par with pre-covid levels. The industry invested a lot in technology, especially in the initial period of the lockdown which helped it to reap the benefits immediately when the lockdown was eased by the government. The lockdown expedited the whole process of adoption of technology even more. Data shows most buyers concluded their property deals using virtual mediums in the lockdown period and the subsequent opening. The fact that companies have already been investing heavily in Proptech helped the matters.
Pandemic Impact and PropTech
The newly-evolved platforms for search and discovery of potential properties have evolved since the pandemic broke out. The platforms are helping the buyers track all the processes in a property-buying deal from the comfort of their homes. The coronavirus epidemic would have hit the real estate market much harder had it not been for the PropTech industry growing and maturing constantly in the country in the last few years.
The segment is likely to see a tremendous boost in the near future amid the growing use of technology such as virtual reality, drones, big data, and artificial intelligence in home purchases. This is expressed through the fact that real estate in the country is slated to become a $1-trillion market by 2030.
The Housing.com’s report also points out a majority of businesses are still conducted through the offline mode in the property brokerage business in India, estimated to be a $1,400-million ($1.4 billion) industry. However, the growth of PropTech in India is also indicated through the fact that even with the actual transaction culminating offline, over 50% of the real estate buying decisions take place through online searches. With the growing internet user base that is expected to increase up to one billion by 2025, the opportunity for players in this segment is colossal.
Technology is revolutionizing the whole industry in more ways than one and throwing up more opportunities for all stakeholders.
Cost effectiveness through tech
Another major way technology is helping the industry is cost effectiveness. The industry players are able to control costs a lot easier with the use of modern tools adopted by them. They are able to keep a tight leash on the costs more effectively now. This is helping them transfer the benefits of cost optimization to their customers who get properties at lower rates.
The use of technology is making the real estate sector more transcendental, while ushering in new professionalism. Technology is helping in accomplishments of new tasks which the industry could not dream of achieving, let’s say, 10 years ago. Developers are able to bring new paradigms in client servicing, apart from meeting project deadlines easily and taking the quality of construction to the next level. Such efficiencies will continue to accrue to the industry as the technology itself evolves and also with adoption of more technology by the companies.
(By Mani Rangarajan, Group COO, Housing.com, Makaan.com & PropTiger.com)