Real estate transactions go online
15 September 2014
In the last couple of years, real estate sector has seen the emergence of websites as a low-cost tool to connect buyers and sellers. By Advitiya Sharma, co-founder and marketing head, housing.com
The recent announcement that India's capital markets regulator had approved regulations for the creation of real estate investment and infrastructure investment trusts or REITS in the country is just the latest in a series of legal revisions over the past year that reflect the dramatic changes that have been going on in India's real estate industry.
One of the greatest changes, of course, is the increase of online real estate portals, which have gained ground among prospective renters and buyers, as well as landlords and developers.
They provide clear options for low-budget housing, for commercial and for investment properties.
Changing laws have made it more difficult and costly for Indians to invest in property outside the country, which has led to high-end investors turning to the internet to locate properties around the country.
At the same time, new laws have been coded to make the real estate market more easily navigable, while a younger and more tech-savvy generation has influenced purchasing behaviour.
All these have combined to enable the online real estate space to emerge as a powerful marketing force in India, as it is seen as a convenient and cost-effective way to proceed in finding a home.
One of the most important facets of online real estate portals, and the reason that their appeal will increasing is that they provide options to users varying all income groups.
While some exclusively focus on ordinary rent / resale, there are markets for affordable housing (defined as those costing Rs50 lakh or below), the paying guest or hostel accomodation seekers, land buyers, and everything in between.
Similarly for renters and buyers, it is easier to shop from a computer screen to filter houses that don't meet basic criteria or budget requirements, than to tour dozens of properties.
similarly for the "suppliers" of properties, the benefits are obvious - reaching a broader audience, including many demographics that would otherwise have been far less accessible.
For one, online listings replaces the need for numerous classified ads and provides the opportunity to add photos and details of the flat, its amenities, details of the neighborhood and the society.
This enables potential viewers being to see what they are going to be offered.
Moreover, online portals help owners and developers of high-end properties, to attract the right (generally tech-savvy) investor.
The majority of users, however, are not luxury buyers: high-end housing, as defined by properties valued at more than one crore, is projected to account for only 7 per cent of the market this year.
However, on the flip side, one frequent cause for complaint is that the properties listed online are not the ones that the site's users are later shown;
To address this, portals that want to be competitive are now moving to verify their listings.
With growing internet connectivity and computer users, the net is not just another resource for the search for a new home -- it's likely to be the first place for people to look.
While it will undoubtedly be some time before users develop enough confidence in the transparency of the industry to turn the real estate portal from a platform for research to one for online transactions, there's no doubt that that's where the industry is heading.