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But that is about to change in the near future.
The time is ripe for a 2nd wave of technology innovation in the Indian prop-tech space. Changes in consumer behaviour due to COVID-19, availability of real-estate data in a digitised format, improvements in AR/ VR (Augmented Reality, Virtual Reality) technology should accelerate the development in this space.
Below are some of the trends that we are witnessing in prop-tech in India:
Virtual / 3D Home tours
COVID-19 has brought about a radical shift in the consumer behaviour. The demand for digital transactions and virtual home-tours is at an all time high. 3D renders and virtual walk-throughs have become a standard offering from most of the top real estate developers in India.
This trend is expected to move to the rental space and secondary home sale market too. Certain brokers and home sellers are already using software tools (such as Matterport) to provide 3D walkthroughs of their homes. This is likely to evolve to 3D staging – where a 3D walkthrough of the real house is virtually enhanced with furniture and decor. This is important because most buyers struggle to imagine what empty spaces would look like when fully furnished. With 3D staging, customers can get an immersive experience, that’s even better than a house visit and this will also change the way houses are bought and sold.
Big Data & Analytics
Today, we have access to unprecedented amounts of data. We have data on property transactions and other legal documents, geo-spatial data and Google Maps data, which didn’t exist hitherto. With RERA (Real Estate Regulatory Authority), we also have quarterly data on the construction status and collections of all projects. This data is already being used by lenders to assess risk (of default and title risk) and investors tend to make decisions on commercial and warehouse investments. This is just the beginning of big data in prop-tech. In future, we will see new and interesting innovations leveraging this data to bring value to many players in the real-estate ecosystem. iBuying (Instant Buying)
This is an example of leveraging Big Data and analytics in real-estate. In the iBuying transaction model, companies use algorithms to estimate a home’s value, and hence buy it directly from the owners. These companies use Artificial intelligence models built on top of past transaction data and local market conditions to determine the price of homes. This model offers instant liquidity to the home sellers (houses can be sold in weeks, instead of months).
iBuying is just starting off in India but has been widely adopted in other markets with more than 30,000 homes sold in the US, every year.
Fractional Ownership
Fractional ownership enables investors to own a fraction of a property (typically a commercial property) and earn rental income proportionate to their ownership. With fractional ownership, investors get access to investment opportunities that would be otherwise outside of their price range. ( “Grade A” commercial properties typically start at a ticket size of 10-15 crores.) Such investments were earlier accessible only to HNIs within closed networks. Technology enables widespread distribution and discovery of such opportunities and allows smaller investors to invest in Grade A commercial real estate. There are several companies in India, and globally offering fractional ownership of real-estate properties.
Property Management software
Property management is an upcoming space in India, with several established players in mature markets. The global property management software market is poised to reach USD 21.4 Billion by 2025, as per comprehensive research report survey by Market Research Future. (source).
Property management solutions not only offer a variety of services to make the landlord’s life simpler but it further simplifies rent collection, tax payments, payment of maintenance charges and communication with tenants. They may also integrate with third party platforms to simplify property maintenance.
Property management software is a technology that allows landlords to easily manage their rental properties. It is typically meant for landlords managing several properties, which can involve a lot of running around and day-to-day hassles.
With the help of such softwares, landlords can easily book services – like house painting or AC repair. They can even track all the maintenance costs and calculate the security deposit to be refunded to the tenant when due.
Blockchain
Blockchain can provide an immutable digital ledger for all property transactions including title transfers, tax payments and approval from various government bodies. This trend may take longer than the others to be implemented and show tangible results. It requires initiative from the government, but it can be as impactful for real-estate as UPI is for banking. It would fully eliminate the title fraud, hassles of document storage and provide absolute transparency in real estate transactions.
(The writer is co-founder & CEO, Ivy Homes)
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