Online Property Portals Changing the Real Estate Paradigm

Prasun Kumar, Marketing Head, MagicbricksThe government's bid to boost India’s real estate industry with a slew of policy reforms for its ambitious 'Housing for All' by 2022 has put the focus on affordable housing. There is a certain sense of renewed excitement around real estate now after few years of lull. Home buyers have already started to respond positively to the consistent reduction in the home loan rates and the other Credit Linked Subsidy Schemes (CLSS) released by the National Housing Bank (NHB). Since February 2017, we have been witnessing a healthy spike of 40 percent in searches and around 30 percent hike in owner listings.

Add to it, the latest FDI figures re¬veal that there has been a significant jump in foreign investments flowing into India for real estate. In the last three years, FDI inflow has jumped to $60.08 billion from $36.05 billion in 2013-14.
The timely intervention by the government to boost India’s real estate sector has certainly provided all the online real estate players a great opportunity to innovate by providing holistic business solutions. The stage is now set for the online real estate players to up their game to graduate to the next level.
The industry is still in its nascent stage and we expect it to reach $215- 225 million by 2020 from what was a $55-60 million industry in 2015. The industry has been growing at a robust CAGR of 40 percent plus and the journey has just begun.

There is no doubt that online real estate portals have evolved with time from being listing services. If we look back 5-7 years, when portals were not big, the only credible source of information for buyers, sellers, or for the purpose of rent, was from the newspaper classifieds or your neighborhood property agent. And chances were that as a consumer you may never get to know the information on the supply in the market.

The great thing that portals have done is that they have aggregated the entire supply in the market. Today at any given point of time, we have more than 1.5 million property listings on our site. The main reason why most consumers have switched online for the purpose of buying, selling or renting is the fact that at one go you can see all the available supply in the market. But do we buy property online? I don’t think people will buy property in future because it is such a high involvement category and costs so much of money. You don't expect someone to press a button and buy property online. But still on a large scale, online real estate is a sizeable business.
Today, we have completely new set of prospective home buyers who are high on digital content and with size able disposable income more than ever before. This is the new set of investors, who will be driving the real estate. At any given point of time, around 65 percent of those buying a home come online at some stage of the process. We expect this number to shoot up, as three-fourth of the users will be using online as a more efficient medium for searching property. Increasing mobile internet penetration and awareness about real estate portals have also driven the number of users.

Today, buying a house is not just an investment; customers want to live the experience of buying a house

But the challenge that remain for all the real estate portals is how to engage with this new set of informed prospective buyers who are hard pressed for time in a fast paced world. Converting this challenge into opportunity, online real estate players have started innovating and have come up with customer centric products for each stage of the lifecycle of the home buying process. With technological advancements, online portals have become smart and the home buyer smarter.

As the home buying process increasingly moves from offline to online, real estate portals are leaving no stone unturned. From innovative marketing strategies to using technology for providing an immersive solution to the customers, they are doing it all. According to a latest study by Google, more than half the real estate buys in 2014 were influenced by online search. And surprisingly, this was not restricted to Metros but was prevalent in tier-2 cities as well.

Today, buying a house is not just an investment. Customers want to live the experience of buying a house. Online players, who offer the best experience to consumers are the ones who would flourish. There is a tool for every thing be it for property discovery, understanding the property worth, research, or for services during buying and /or post-purchase phase.

All online real estate portals are sitting on billions of real time data points and are using the most advanced techniques of data sciences to bring in superlative experience, meaningful solutions and more transparency for the prospective home buyers. Data sciences are being used to drive credibility of listings that weed out the problem of fake listings that has plagued this industry for a long time. Portals are using data sciences to design tools that not only help the buyers define their exact needs but create the inexpressible criteria that makes for the perfect home.

The industry has realized that innovation is not a luxury any more, it is key to survival. Sensing this, the industry has embraced digital technology more than ever before to attract the prospective home buyer. Property portals are now investing in Experience Centers, where customers are experiencing 3D floor plans; 360 degree views, immersive walk throughs; HD videos and so on. This is the way ahead!

Even developers have realized a strong growth potential in the digital space. Developers now want to leverage the rich media experience which boosts their brand marketing efforts. We expect digital to capture more than 25 percent of the developer's marketing purse and property portals will get a larger share of the pie.

The good thing about real estate today is that the market is ripe for end users. The speculative buying behavior is gone. This provides an opportunity to all the online real estate players to increase involvement with the genuine investors in a meaningful way.