Benefits of digitizing the Indian real estate industry
Although real estate has lagged behind other major industries in adopting digital technology like healthcare, retail, and finance, recent developments made feasible by these advancements hold much promise for the industry's future. This recent digital shift has already significantly impacted the way we buy, list, and manage properties, with the introduction of virtual tours, tailored services, and automated transactions.
The rewards of digitisation much outweigh the hurdles involved with adjusting to new technology, but there will be some teething problems as real estate companies, realtors, agents, managers, and clients learn to apply and take advantage of these brand-new tools. In this article, we will explore not only what these rewards are, but also how Indian real estate’s digital transformation can benefit the national economy. First however, let us understand why such a makeover is needed in the first place.
Challenges impacting the traditional real estate sector
Earlier real estate business models were heavily reliant on individual interactions between intermediaries, such as brokers and agents who controlled conversations between bidders, sellers, buyers, and financiers across the value chain. These personal interactions were essential to the success of the earlier real estate business models. The widespread adoption of technology throughout all stages of the value chain has resulted in the emergence of a movement known as disintermediation, which provides end users with increased access, visibility, options, and choices at their fingertips.
Furthermore, without the intervention of technologies throughout the COVID-19 pandemic, homebuyers weren’t buying as many houses. In fact, all asset classes weren’t seeing many investments (except for the commercial workplace and warehouse segments, which have seen a lot of growth recently), leaving developers with a lot of unsold inventory. Due to lack of advanced technology and skilled manpower, the overall project economics is yet to be achieved. Many of the ongoing affordable housing projects,for instance, are still adopting conventional construction techniques.
To address these issues, the Indian government started putting in place several reforms to help the sector develop and grow. Some of them include the easing of the rules on FDI, making REITs, starting Smart City projects, focusing on affordable housing, and making sure that everyone has a place to live. All of these reform proposals and policy announcements, along with the good economic growth prospects, should help the sector accelerate its growth.
At the same time, the intervention of technology is also equally vital. How? Let us find out.
Benefits of technological transformation of the sector
Digitalizing through the use of big data, artificial intelligence, automation, and machine learning has proven great for real estate in two ways. First, it let the sector deal with short-term problems resulting from the COVID crisis and everything that came with it. The introduction of video walkthroughs to sell and rent properties is one example of this. Second, it makes their operations more efficient, which will help them deal with future problems.Building information modelling (BIM) for example, uses a standard machine-readable data structure to enhance facility planning, design, construction, operation, and maintenance.
Essentially, better consumer experience, linked communities, simplicity of the transaction, informed consumer decision, broader geographic reach, and more effective sales and inventory management are all made possible by technology-enabled digital real estate platforms. The effect of these digital interventions is consistent with the original notion of disruption. Faster data access, greater data sharing, increased resource usage, consumer convenience, transaction transparency, higher profitability data analytics, fewer intermediaries, and an improved customer experience are just some of the benefits that digital business platforms provide. The widespread adoption of technology throughout all stages of the value chain has resulted in the emergence of a movement known as disintermediation, which provides end users with increased access, transparency, alternatives, and decisions at their fingertips.
To put it simply, I believe these four defining traits will shape new developments in the future for both the government, developers, and consumers - i.e., making things clearer, making things work better, making things more flexible, and opening up new chances, new information, and new perspectives.
A fusion of opportunities
The marriage of traditional real estate and digital business systems have a bright future indeed. Today PropTech and virtual communication platforms are no longer only a facilitator, but survival and growth need. A new chapter of digital transformation is on the verge, introducing new technology and commercial opportunities. Technology-enabled transformations, in fact, have grown due to their low-CAPEX models, large consumer market reach, convenience, and optimised inventory management. It's safe to say therefore, that disruptions are going to remain and will have a lasting impact on the Indian real estate industry.