The Metamorphosis of the Property Portal Industry in India
The Real Estate consumer is probably the most valuable consumer walking the face of the earth. And it’s not just the purchase of Property which makes this transaction valuable; it is also the host of other expenses that a property purchase triggers that make this sector one of the biggest industries around. The real estate market across the country is expected to reach 180 billion dollars by 2020, up from 94 billion dollars in 2014. It is the fourth largest sector in terms of foreign direct investment (FDI) inflows. Size apart, property transaction is a very high-involvement purchase, probably amongst the Top 3 decisions that most consumers make in the course of a lifetime. This means that this purchase not only has a large value but also has the full attention of the consumer.
While the real estate market has been a bit subdued in the past few years, underlying growth drivers remain strong. Rapid urbanisation, emergence of nuclear families and rising household incomes remain key drivers for growth in all spheres including residential, commercial and retail. The government’s Smart Cities Mission has also given a fillip to the industry. There is an uptick in buyer sentiment with clearing of the Real Estate Regulation Act. Therefore, the current sentiment notwithstanding, the long term prospects for the industry continue to be bullish.
It is in this valuable and exciting industry, that Property Portals are trying to usher in a quiet revolution in the purchase process. Driven by the high level of internet/mobile penetration in the country today, a large proportion of consumers today prefer to use a property portal to discover available properties. As per a recent Google-KPMG study, as much as 76 percent of real estate purchase decisions were influenced by the internet. The Internet has put the customer in charge and property portals have become the go-to medium when consumers begin their search process. The primary underlying reason driving this adoption is the aggregation of a large number of properties on the portal. We estimate that more than 75 percent of all available properties are now advertised online, either by landlords/builders themselves or by agents representing the sellers. The first step in property search is when consumers want to get a grasp of what kind of properties are available; what the prevailing prices are; what are the locality-price trade-offs that need to be done; and to thereafter be able to connect with sellers of properties that interest them.
Thanks to an extensive scaling up of the portal platform, more than 4 lakh consumers make searches daily, scouring through over a million advertised properties, and make over a lakh connections with sellers across the country. This extensive consumer adoption has in turn triggered a strong online adoption from the seller side too – over 10,000 builders, over 50,000 property agents and over 2 Million landlords have used property portals in the past year. As a marketplace model, the business benefits from scale – the more the adoption, the more attractive the platform becomes as it features even more listings and even more traffic, thereby becoming even more appealing to other buyers/sellers. We’re in the midst of this exciting scale-up and are keeping an aggressive ambition to acquire every single available property and every available buyer and get them online.
While a few unsolved problems remain, property portals have otherwise reasonably addressed the problem of ‘discovery’. Consumers quite easily and in large numbers use the portal to discover listings of their choice to do the basic research and connect onwards with sellers, that too from the comfort of their homes. The moot question at this stage is whether we can do more than being just a ‘discovery platform’ for consumers to use as a first step in their buying process? It’s important to constantly innovate and come up with a new value proposition that reflects how we can help consumers in a tech-driven marketplace, for e.g. Can portals address several other touch-points such as aiding/making property site visits more effective? Can portals leverage their information and analytics to aid the process of comparing and deciding between shortlisted properties? Can portals help in price discovery and negotiations; in legal paperwork, home loans etc.? Can portals leverage the extensive data on their platforms to enable better decision analytics and smarter home buying/selling decisions for buyers and landlords/brokers/builders alike? Can portals develop software and leverage their platform that makes brokers more effective?
And the answer to all of this is a definitive ‘Yes’. We’re working on it. Consumers’ appetite for online real estate information, product and services has become insatiable. The more they get, the more they want, and they have began steering the demand. This process will thereby see the transformation of the property portal from being a ‘discovery platform’ into a platform that makes a much bigger, positive impact on the real estate buying process and on the industry as a whole. As they say, "you ain’t seen nothing yet!"