The recent f6-crore sale of an apartment by an online marketplace firm left many a mouth agape. Already, some top real estate portals are gaining strength in the country and many prominent developers have strong presence online. Although the new-age business model has its inherent weaknesses and majority of consumers are still shy of doing the entire transaction of a high-value purchase, like a house, online, the trend is surely catching on. It’s only a matter of time when the online property sale will become an accepted norm in the country.
In his late fifties, Sanjeev Wadhwa is sufficiently techsawy. Besides being regular with his e-mails, he carries out a good chunk of his office work on computer, rather comfortably. Visiting host of websites for fun, knowledge and entertainment is his favourite pastime. But one thing which had always astounded him is his daughter’s fad of buying all her requirements online – books, dresses and her fashion accessories. “I won’t buy even a handkerchief on the Net unless I have seen it myself,” he used to argue with her. How people could indulge in e-commerce without going through the age-old ‘touch-and-feel’ process, he always wondered. And then, he came across a news report which changed his entire perception.
“The primary reason underpinning the trend is the advantages proffered to the consumers through the medium of internet. Today, the consumer is able to search properties at the click of a button from the comfort of his homes.”
BROTIN BANERJEE MD & CEO, Tata Housing
Online marketplace Snapdeal had sold a luxury penthouse in Bengaluru for a whopping Rs 6 crore! This was, perhaps, one of the highest online residential property sales in the country. And it happened only a few weeks after Tata Housing became the first real estate developer to have sold a villa worth Rs.5.5 crore through its ecommerce portal.
With Internet making deeper penetration across the country, online property purchase is also breaking fresh grounds daily. Already, there has been a constant rise in online portals dealing in property segment. Their popularity has also been increasing gradually as they are providing additional and more innovative services to their clients. Of course, none had so far gone till the last mile as Snapdeal in which case even the money transaction was done online. It’s no surprise then that making a high-value transaction for once-in-a-lifetime kind-of purchase, like a house, had the potential of changing perceptions of many Mr Wadhwas about online buying.
I won’t buy even a handkerchief on the Net unless I have seen it myself. Sanjeev Wadhwa used to say
Though credibility still remains a big deterrent along with a host of issues, there is absolutely no doubt that online platform, or even e-commerce, for property sale is bound to grow. With the changing profile of buyers and increasing acceptance of ecommerce in the country, many real estate developers have started getting attracted to and accepting this model despite its various shortcomings. A Snapdeal spokesperson has been quoted in the media as saying, “Real estate category on Snapdeal has seen a tremendous response from customers since its launch in August last year.
The category has grown significant in the last six months and has exceeded all our expectations”. Realty & More sent a detailed questionnaire to Snapdeal besides some other developers and online brokerage firms to seek their opinion on the growth potential of this segment, its shortcomings and about their own plans about fresh forays or expansion in this domain.
“The likelihood of a homebuyer making such a decision based solely on virtual information is very less…With the advent of new technologies, it is only a matter of time when people would be confident enough to buy a property online solely based on the virtual information available.”
VIKAS MALPANI Co-founder, CommonFloor.com
Though Snapdeal refused to answer, others were quite forthcoming on all our queries. In its response, Tata Housing, which besides selling a Rs.5.5crore villa through its ecommerce portal has managed to sell more than 30 units with a price tag of over Rs. 1 crore post introduction of the concept, said, “In our quest to become a customer-centric organisation, our efforts have been centered around identifying newer avenues for shepherding business.”
Giving the rationale of selling property online, Brotin Banerjee MD & CEO, Tata Housing, said, “Internet has become the source of much-needed momentum for real estate industry and has changed the dynamics of the way it operates. The online space and e-commerce platforms have evolved over the years and have opened the market to national and global buyers. Moreover, rapid urbanisation has also played an important role in changing the lifestyles of the urban consumers. This, in turn, has resulted in the Indian consumers being open about buying products that are not traditionally sold online such as real estate and cars”
Tata Housing is of the opinion that the online home buying will be a game-changer for the sector. To a question as to why would a customer buy a high-value product like house online, Banerjee said, “The primary reason underpinning the trend is the advantages proffered to the consumers through the medium of internet.Today, the consumer is able to search properties at the click of a button from the comfort of his home. With the introduction of the features like buying houses online, consumers are empowered to purchase houses at the time and place of their convenience.
Internet provides the consumers a wider reach and choice to reach out to properties which are outside their neighborhood. Citing an example, he said a keen investor in Delhi may not know about the development in Kasauli which suits him. Likewise, an interested buyer in New York may not know about an apartment in Mumbai. “The virtual medium has helped in breaking down these barriers and has opened a medium for apartment sales across all locations irrespective of geography,” he said.
Regarding the profile of online buyers, the Tata Housing MD said, “The millennial generation, popularly known as Gen Y or Gen Next is characterised by being educated, tech-savvy, adaptable and unconventional. Statistics reveal a paradigm shift towards young investors and homebuyers. The average age of buyers has decreased to 2942 years in 2014 as compared to 31-45 years in 2013. NRIs have also been strong supporters of the online platform with 25 per cent of buyers between January and October 2014 being from the US, the UK, UAE, South Africa, Hong Kong and Australia, among others. NRIs’ share in the online sales has increased from 12 per cent in 2013 to 25 per cent in 2014.”
Citing the confidentiality clause, the company refused to share with us the details of the NRI customer who recently purchased a villa in its Myst project in Kasauli for Rs 5.5 crore. The company continues to invest in innovation to improve the online home buying experience in terms of interface, security and quality of transaction. Noticing great potential in the medium, Tata Housing expects nearly 30 per cent of its sales to be generated from online transactions in the next five years.
The response of Vikas Malpani, Co-founder of online property portal CommonFloor.com, to R&M’s set of queries was even more detailed. In Malpani’s view, the entire process of buying a home takes almost six months to one year before a buyer finalises the property to buy. “Our aim is to simplify the property search process and empower the customers with better information about the property”, he said. The company has launched features such as Livein-tours, Locality Virtual Tours and CommonFloor Retina with which buyers can save 90 per cent of time, he claims. “We have created a real estate ecosystem where a buyer can use the power of online to make informed decision,” he said.
Regarding factors which deter a client from buying online, Malpani said home buying is a cost-intensive investment, which is generally done after lot of due-diligence. “The likelihood of a homebuyer making such a decision based solely on virtual information is very less”, he said, but was quick to add: “With the advent of new technologies, it is only a matter of time when people would be confident enough to buy a property online solely based on the virtual information available.”
About CommonFloor.com, he said, “We are akin to the Google model, in which the platform is free for the end-user (property owners), while the business customer pays for the services. The property developers or individual owners who are looking to sell their property have an option of listing their property for free and there is also a premium level. It’s a subscription-based model.”
To a query if more players will enter this segment in the near future, Malpani said today online real estate space has become a revolution which has transformed the way we shop. “By looking at the changing consumer behaviour, it is pretty clear that change is here and more is on the way. More players mean more options and more choices for the consumer to choose from and ideally it will only help them to check, compare and find their ideal match,” he concluded.
Expectedly enough, the viewpoint expressed by broking firm RE/MAX to R&M’s set of questions was on slightly different lines. Acknowledging that the real estate sector has seen a radical shift with digitalisation, Sam Chopra, Founder & Chairman of RE/MAX India, said, “Though Internet has now become the first point of contact for the preliminary research by the homebuyers, at the end of the day the customer goes back to a real estate consultant to finalise the deal instead of doing it online.”
“Today the world has become tech savvy and these online real estate portals assist buyers to view, rate and analyse property without visiting
the actual site.”
DEEPAK KAPOOR Director, Gulshan Homz
The reason for this, according to Chopra, is that buying of a house is a complex process which involves a lot of documentation and also a careful analysis for a good return on investment. “For making such an important lifetime decision, a buyer looks up to a real estate consultant who acts as a guide and mentor in assisting and streamlining all these processes for the buyer, he said.
In RE/MAX Chairman’s opinion, the sector needs a perfect blend of FIT (Fulfillment, Inventory and Technology) and to fulfill this need, he said, all the major real estate players have made sure that they have an effective online presence. “It has been observed that after watching the home videos, taking virtual home-tours and reading reviews about specific brands and their offerings; serious buyers consult a real estate professional to bridge this gap between their Internet research and actual home visit,” he said.
“Though Internet has now become the first point of contact for the preliminary research by the homebuyers, at the end of the day the customer goes back to a real estate consultant to finalise the deal instead of doing it online.”
SAM CHOPRA, Founder & Chairman, RE/MAX India
Summing up on a more pragmatic route, Chopra said with the age-bracket of people buying or investing in properties drastically going down and with the you ng tech-savvy customers, “one has to be very active on the online platforms.”
But, he maintained, “When it comes to finally buying, real estate consultants are looked up to for their expertise.” Lastly, we sought feedback from the protagonists of the real estate industry to have a 360degree view of the growing online scenario. Speaking to Realty & More, Deepak Kapoor, President, Credai Western UP & Director, Gulshan Homz, said, “Online housing portals like Commonfloor.com, Housing.com, Makaan.com and Magicbricks are some of the names which are becoming very popular and successful these days as they provide data-backed analysis of all the microscopic details of a property.” Kapoor added, “Today the world has become tech savvy and these online real estate portals assist buyers to view, rate and analyse property without visiting the actual site.”
“Today’s reach is not limited but the only aspect lacking is the absence of all developers available on the same stage for the buyers to compare and chose the best suited to them”
ASHOK GUPTA, CMD, Ajnara India Ltd
Ashok Gupta, CMD, Ajnara India Ltd., was of the opinion that the current real estate market is unorganised and there is a need to bring it on a par with all the other sectors, particularly in the aspect of reach to buyers. “Today’s reach is not limited but the only aspect lacking is the absence of all developers available on the same stage for the buyers to compare and chose the best suited to them,” he said matter-of-factually.
Kushagr Ansal, Director, Ansal Housing, told R&M, “A perception has been built around the real estate sector that there is prevalent incredibility which explains the reason why people are a bit hesitant in making online purchases.” Also, he said, “With the option of personally visiting the construction sites and evaluating all aspects of the project before the final purchase decision negate the buyers’ option of going online.”
“With the option of personally visiting the construction sites and evaluating all aspects of the project before the final purchase decision negate the buyers’ option of going online.”
KUSHAGR ANSAL, Director, Ansal Housing
”As of now, we do not have any plans to sell on ecommerce platform, but we might reconsider that over the period of time because of the changing market trend.”
SUSHANT MUTTREJA,CMD, Cosmic Group
However, Ansal agreed that with the availability of more and more online portals which showcase each and every aspect of a buyer’s concern, “more and more people are expected to get active on the digital front.” “The growing influence of the online property buying scenario is best summed up in the words of Sushant Muttreja, CMD, Cosmic Group, who said although “As of now, we do not have any plans to sell on e-commerce platform, but we might reconsider that over the period of time because of the changing market trend.” The current model, he said, involves a lot of follow-ups and reviewing over time to time in order to keep track of developments and customer viewpoints. Naming a few online portals, he acknowledged that they “have created a completely new online buying experience for the buyers.”
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