Innovation and Change have always been at the forefront, particularly in creating and utilizing new measures to better serve the needs of the company and its customers. Technology continues to be a catalyst for change in all business sectors and industry, and real estate market is no exception. Gone are the days when you had to search amidst thousands of properties, for buying your dream home. Using cutting-edge technology and digital marketing, the process of buying a home has changed monumentally over the past few years. Although the argument still remains that word-to-mouth advertising is the best way to sell anything, it is proved by the studies that in the year 2010 alone the number of real estate transactions carried out online was a whopping 85% of the total market. Unbelievable but true!
Digital Marketing has played a vital role in branding and advertising of an organization, over the past few years. Going digital not only helps in uplifting the brand image but also helps in reaching the targeted audience which, in turn, aids in promoting sales and generating leads. Real Estate is one such industry that has tried, tested and achieved significant business growth with Digital Marketing and there is definitely more to come in 2018. A lot of real estate activity in the online space has been witnessed in the last decade. Property buyers and sellers do a vigorous research online before making the purchase or selling their property offline. Hence, it is of utmost importance to have a strong online presence to make your brand name stand out in the Realty Sector.
According to research by National Association of Realtors (2016), 44 percent of Home Buyers do a thorough online research before looking in person. The statistics clearly depict if you are not using technology for your real estate business, then you are behind the curve.
The advent of technology and digital marketing has had an immense impact on the Real Estate Industry. It is a situation to which you either adapt or simply be left behind. Here are a few ways in which technology has shaped the Real Estate Industry.
- Transparency – With various websites providing information to anyone surfing the internet for free, the greatest impact seen is the proliferation of the public aggregation of information. We are all well past the point where the information and data could be hidden behind the subscription models/paywalls. Numerous websites are now curating the data, pricing, availability and much more for the entire sector to search.
- Online Marketing – Broadcasting your company marketing message, getting property visibility or even marketing yourself has never been easier and more cost-effective. So many sites help developers and broker to get their property and messages out to the marketplace in seconds. With Pinpoint marketing and targeting using big data coming into existence simply means that the days of “spraying and praying” are over in a marketing sense.
- Artificial Intelligence – Technology today performs tasks that require higher forms of intelligence. Artificial Intelligence tools allow machines and computers to function more intelligently. The increased use of machine learning techniques and deep learning in the Realty Sector will boost the quantity of information available, as well as the efficient processing of this information.The digitizing of data assets is becoming pocket-friendly and labor intensive with the help of Artificial Intelligence technologies.
- Drones to enhance Human Experience –Various advancements in the artificial intelligence have contributed the most to the increasing use of drones. These drones are helpful in capturing 3D images and videos of buildings and commercial spaces which helps the buyer to narrow down on property options. Drones can be used efficiently for highlighting property amenities like backyards, pool, landscaping and a lot more to generate a sense of awe which cannot be achieved through normal photography.
- 3D Virtual Tools – Real Estate Industry is going beyond photos. Virtual Realty has enabled users to get a real-time experience of living in their yet to be house. Using the 3D glasses, customers can experience a 3D view of the property/apartment they are interested in. This technology helps buyers to shortlist properties before making their final choice. This is one of the most expensive technologies used for marketing and is currently used only for hi-end projects targeting the NRI audience. However, a drop in price is expected in this technology for faster adoption and mass production.
Considering the changes in policy introduced in 2016 like RERA, Demonetization and REITs, it appears that 2018 will be a great year for the real estate market of India. After the execution of RERA Act and the Benami Transaction (Prohibition) Amendment Act 2016, the country has turned into a preferred destination for real estate investment.
RERA and GST are driving global cash flows and boosting endorsement which has made India rank fourth for FDIs among the Asian countries. In the years to come, buyers and investors will see numerous opportunities in the residential housing through incentives for the affordable housing and modification of the office sector through REITs. 2018 is set to encounter more REITable listings in India combined with more investments in REITs with around 1.73 billion square feet of commercial real estate across warehouse segment, retail and office with a steady return of 9-12 percent and more, annually.
Things are going to get better over time and the reforms will help to shape up the industry to a more consumer-friendly market. To accomplish this, builders will rebuild business process to streamline project delivery and allied services, without stretching themselves too much in terms of scope of work or debt. Builder trying to rebuild business, clear up the backlog will lead them to tie up with more channel partners making it a win-win situation for the broker-builder relationship.
Drawing from the policy, one can say that developers stand to gain in terms of incentives from the government which will equally benefit the customer. Both, the seller and the buyer will benefit as options widen for the former and inventories are cleared for the latter. Such measures of the Centre have additionally brought about the accessibility of more funding options for developers. Foreign Direct Investment (FDI), External Commercial Borrowing (ECB) and debt financing from national financial institutions at highly competitive rates.
The year 2018 will be the year of the affordable segment, with the governments push for housing for all by 2022. With the impacts of all policy initiatives taken in 2016-2017, 2018 is expected to be a year of consolidation of products and services in the realty sector.
More joint developments and joint ventures will be noticed with large realty players taking over financially distressed developers and presenting the realty industry with a fresh line up of competitors.
It is believed by the experts that 2018 is unlikely to see any price rise, however, the recent reforms in the realty sector will boost the confidence of the investors and buyers and sales are likely to pick up. Also, the completion of existing projects will be prioritized over the new ones to be launched, therefore, 2018 looks promising for a good supply of houses across major Indian markets.
After getting the status of infrastructure in the Budget 2017, affordable housing in India will at last pick up the attention of developers and builders. According to the plans, 1 crore affordable houses must be built in rural areas of India by 2019 and to support this cheaper sources of finances have been provided. External business borrowings and refinancing of house loans by NHBs will help in the growth of the realty sector. The qualifying criteria for affordable housing have now been changed from 30 sq meter to 60 sq meter on carpet area from the saleable area, which will provide home seekers more space at the same price. Also, the limited availability of high-value currency due to demonetization will further bring down the property prices in the years to come. All these aspects together will make it easy for the government to achieve its goal of ‘Housing for All’ by 2022. Also, increasing the carpet area of houses to include more projects within its ambit, will continue to attract more prominent developers to realign their products to compete in this category.
Although the main challenge remains in the Tier 1 cities, where the land availability and costs within established locations are difficult, affordable housing is turning into a promising sector and possibly a game changer for the realty industry. It will definitely become an important segment in every builder’s profile in 2018.
In 2018, developers could be concentrating more on their niche expertise, specializing in various segments of real estate. For example, residential projects, plotted developments, township, retails and commercial spaces.With the help of general drive for entrepreneurship, today, India has some 350 co-working space operators running over 800 co-working spaces. This drive allows budding entrepreneurs start a business economically by providing them a platform for networking, flexible working hours and varied desk options. By 2025, 42 percent of India’s population will be working and living in urban centres – research predicts.Rise in co-working culture with more of India Inc. moving to hybrid living spaces- There can be seen an enormous rise in the co-working spaces in the metro cities as well as Tier II cities. It is functioning well for the startups, providing them flexible working options at an affordable price. In spite of the fact that there is a limited supply of co-working spaces in India, the segment is moving gradually into growth mode across India. Organizations with limited space requirements will rent out parts of their office spaces which will, in turn, give rise to ‘hybrid’ space.
Hopefully, in the coming years, more spends will be made towards digitization of property/land records, which is in tune with Digital India Mission. Digitization will in-turn reduce litigation, free up more land in Tier 1 cities to make living there more affordable and also reduce project deadlines, which will directly translate to lower down the costs for the end consumer (buyers & investors).