India, the world’s largest democracy has been going through an unprecedented Internet revolution. With 354 million internet users and over 980 million mobile subscriptions, India is a country every investor, entrepreneur and leader is looking at. The exploding growth of e-commerce industry in the country has invigorated many executives, thought leaders and even business tycoons to take their business online, and the changing equation in real estate industry is yet another such example.
The real estate industry in India has become one of the fastest growing markets; thanks to the meltdown of the US and European markets. It is expected to touch $180 billion by 2020 with a CAGR (Common Annual Growth Rate) of 11.2%, according to IBEF. Despite such convincing growth rate, there are 863.09 million square feet of unsold assets available in the market. Consequently, besides all real estate brokerage firms, which are still doing business in a traditional way, online real estate sites, likes of Housing.com, Magic Bricks, and Common Floor, have jumped into the industry to make the most of it by leveraging the power of Internet and Technology.
With the advent of high-speed Internet connectivity, smartphones, and Virtual reality technology, potential buyers are investing much of their pre-buying time evaluating and comparing the properties online. Last year, a study commissioned by Google said that the internet influenced real estate transactions worth $43 billion in India, $31 billion of which were residential while the rest $12 billion worth of transactions were for a commercial purpose. It also highlighted the fact that 74% of research done online were focused on residential buying.
The scenario has changed not much in the last one year. Most of the Internet search queries in India related to real estate are for residential buying. Besides, in the last one year, the number of Google search queries related to property hunt has gone up by 3%. It is also interesting to learn that 62% of Internet users researching about property buying are more likely to resort to aggregator websites like Housing.com. The availability of information related to properties, projects, location, market trends and unbiased opinions on such aggregator websites are winning the confidence of potential buyers.
So, what does it all sum up to?
It is evidently clear that both the Internet and online aggregator websites are playing a major role in influencing potential property buyers. People have access to loads of information, data and expert commentaries related to properties, which is helping them make more informed decisions than ever before.
Subhankar Mitra, Head, Strategic Consulting (West) at JLL India says, “At best, it (online real estate websites) can be used for information dissemination, due diligence and price comparison. Unlike retail products, here it is better to research online and buy offline”.
In the next five years, the online real estate industry in India is estimated to be a $85 billion market. Visualizing the enormous potential and a great growth opportunity, most of the online real estate companies have fuelled up their marketing activities to reach as many Internet users as possible. One of India’s leading online real estate start-ups – Housing.com has teamed up with MCHI-CREDAI to bring India’s biggest property exhibition, Property Expo 2015, both offline and online, starting from 29 October. The idea here is to provide the “best of both worlds” experience to all home buyers and investors.
All said and done, it would be interesting to see how the real estate industry in India will leverage the enormous potential of the Internet in the next five years. While the country has already surpassed the US in terms of the number of Internet users and is on its way to beat them on smartphone grounds as well, online real estate portals have got to solidify their brand value and build trust. For a buyer, it could be another property if not the first one, and no one is going to ask, but for an online real estate portal, brand reputation trumps everything else. However, with newer disruptive models, online real estate portals have definitely made life simpler for everyone.