Businesses and industries have become very dependent on technology today. Technology has played a vital role in driving this trend and factors such as rapid urbanization, digitalization, and the increase in disposable incomes.
The advancement of technology has created a plethora of opportunities across various industries and sectors.
Virtual Reality and Artificial Intelligence are only the tips of the iceberg regarding how far we have advanced and expanded technologically.
No industry is immune to technological disruptions, including real estate. The Indian real estate industry has also been impacted by the paradigm shift sweeping through the global real estate industry.
The term “Proptech” has become a buzzword in real estate during this period of digital transformation.
What is Proptech?
India’s real estate industry has embraced proptech relatively recently. Fintech, Edtech, Healthtech, and similar technologies fall into this category. They represent technology innovation within their respective fields.
Alternatively, Proptech is an acronym for “Property” and “Technologies”. Whether it is a residential, commercial, or construction project, the importance of technology is evident.
A cross-industry approach will revolutionize how we search for, buy, and sell real estate.
With this software, multiple small-scale industries and enterprises will be able to manage multiple projects simultaneously in various locations with greater accuracy and efficiency.
By incorporating Proptech into real estate, operations and management will be simplified on a large scale.
Despite its long history, the term is only now gaining attention in the real estate industry and Indian real estate more recently.
It is estimated that the Proptech segment in India will reach $1 Tn by 2030 from $120 Bn in 2017 (INC 42) despite exponential growth in recent years.
India’s Proptech Evolution
Many of the earliest Proptech startups focused on listing commercial and residential properties, such as Magic Bricks, 99 acres, and others.
By eliminating an intermediary, they maximized user benefits. Additionally, online real estate became overcrowded as the years passed, resulting in increased competition.
Additionally, the needs of consumers have changed; they now require more information to make informed choices. In response to changing consumer needs, Proptech has become more critical, and advanced technologies like artificial intelligence and virtual reality are becoming more prevalent.
As a result of the amorphous nature of Indian property, a significant market gap drove demand for planned business information and data analytics concurrently.
Before, users were primarily interested in searching for houses. Indian consumers, however, wanted much more. In response to this unmet market need, proptech data aggregators have emerged, providing real estate market data services.
During this time of search and evolution of Indian consumers’ needs, newer Proptech startups appeared with advances in technology.
Future Proptech Trends
Proptech startups and existing real estate players are continuously reducing the communication gap as the demand for the home buyer and seller information increases.
However specific the current trends may be, they may increase the customer’s experience in various ways. Here are some examples:
- Data automation and artificial intelligence in real estate
- Property data digitization and big data
- Construction and maintenance using sustainable technology
- Drones can display 360-degree views with IoT and IIoT
- Automated customer service using chatbots
- Technology that helps property owners run brighter stores
Despite initial resentment regarding the ongoing changes, Indian real estate is finally implementing and positively incorporating these changes for developers, brokers, investors, and consumers.
To make long term decisions with precision, Indian consumers look for comprehensive Lifecycle Support from Proptech startups, including information about buying and selling data.
Real Estate Technology Disruption in the 21st Century
Proptech has helped Indian real estate move toward new advancements as more people become aware of and accept the technology. Both developers and consumers have benefited from the increasing number of players and the various tools at their disposal.
In addition to offering convenience to consumers, protection also reduces transaction costs; it emphasizes the importance of the ‘customer’. As a result, unit sales and rental occupancies are significantly higher due to the ‘best match’ between buyers and sellers of properties.
Technology adoption has always been driven by consumer demand, so tech-savvy real estate investors are more aware of inefficiencies in the real estate market. In the future, Proptech demand will continue to rise and foster further advancements and conversations.
Impact of pandemics on PropTech
Despite the growth and maturation of the PropTech industry in the U.S. over the last few years, the Coronavirus epidemic would have hit the real estate market much harder. Since the pandemic broke out, new platforms have emerged for finding and discovering potential properties. The platforms allow buyers to track all of the steps involved in a property-buying transaction from their homes.
Considering the growing use of technology in the home buying process, such as virtual reality, drones, big data, and artificial intelligence, this segment will likely see a tremendous boost shortly. It can be seen that the country’s real estate market is on track to reach $1 trillion in 2030.
In India, the property brokerage business is estimated to be worth $1,400 million, or $1.4 billion. Most business is conducted offline, according to Housing.com’s report. It is also clear that PropTech has grown in India because even though the actual transaction culminates offline, more than 50% of the buying decisions are now made online. By 2025, there will be a billion internet users, providing companies in this segment with enormous opportunities.
All stakeholders are developing more opportunities due to technology revolutionizing the industry in more ways than one.
Tech-enhanced cost-effectiveness
The industry is also aided by technology in terms of cost-effectiveness. By adopting modern tools, industry players have a much easier time controlling costs. Taking control of the charges is more accessible now. In return, they can offer their customers lower rates for their properties due to cost optimization.
Ten years ago, the industry could not have imagined accomplishing its tasks, thanks to technology. Using technology in real estate, a new level of professionalism is being introduced, and the sector becomes more transcendent. Besides meeting deadlines efficiently and delivering quality construction, developers can introduce new paradigms in client service. Technology itself will continue to evolve, and companies will adopt more technology to gain efficiencies.
A PropTech company uses technology to improve assets returns, reduce friction, and increase transparency in real estate. However, real estate has not embraced technology as rapidly as other industries.
With AI and the launch of 5G, Real Estate is experiencing a paradigm shift that threatens to disrupt the entire RE value chain. As a result of the COVID pandemic, PropTech investments continue to flourish.
Several reasons drive real estate companies to explore digital investment opportunities and collaborate with PropTech, ultimately leading to the balance of power in Real Estate shifting from traditional developers to higher-achieving and more technologically savvy New Age Real Estate Companies. An attempt has been made to glimpse into the disruption of Real Estate by PropTech.
Development
The early decision-makers in the property development industry analyzed traditional data such as occupancy rates or property prices and combined them with their intuition. With improvements in big data analytics and a race to create Data Lakes, developers can now gain better insight into previously unobtainable data. -Nontraditional data sources, such as traffic information obtained from GPS devices, can be used to identify trends about a region.
Future real estate developments will be closely tied to Internet technologies from the very beginning, ultimately transforming the design, construction, operation, and use processes. Construction has always been a leader in innovation, leading to stronger, taller, and more energy-efficient buildings, safer construction sites, and higher worker productivity. Construction professionals and investors are paying great attention to the development of new technologies today, as they are being developed at record speed.
Conceptualizing & Design
With the increased bandwidth availability, intelligent wearable device development will become easier. Increasing penetration of IoT provides insights into how spaces are utilized and how utilities are operated. Future building designs will also be determined by installing large data centres and micro antenna networks required for 5G networks. Wellness becoming measurable with new technologies will also have a significant impact as it transcends Energy Saving.
Construction
Despite being one of the most labour- and resource-intensive industries globally, construction still has the least digitization. Robotics and 3D printing will revolutionize the construction industry with improved quality and unimaginable speeds. The use of drones will enhance current technologies.
Customer Journey
Digital customer experiences refer to interactions with multiple people in a non-digital process. These interactions will be enhanced and replaced with technology that uses augmented reality, virtual reality, and bots. This process has been completely disrupted by technology, giving consumers access to technology that enables them to search for apartments, homes, offices and hotels online just by clicking a button.
PropTech has simplified the process of buying and selling properties. Buyers can search and compare numerous properties, while sellers can list their properties quickly. A similar improvement can also be seen with the renting process and financial transactions.
The advent of Augmented and Virtual Reality and increases in bandwidth will completely change the customer journey, providing unprecedented convenience and transparency for the customer.
Ownership
Real estate will be revolutionized by blockchain by improving and eliminating various inefficiencies. Blockchain technology allows for the ownership of an object to be entirely tokenized, allowing it to be “divided” and purchased in smaller amounts digitally. As a result of blockchain technology, there is also the potential to reduce fraud and increase transparency. Investment real estate is not accessible to most people and requires substantial capital, expertise, and hard work.
Companies providing innovative real estate investment services have addressed this issue by offering investors the opportunity to buy “shares” in a property or real estate project and other tools, platforms, and support services to enhance transparency, efficiency and accuracy throughout the entire investing process. Earlier this year, we saw C2C equity lending platforms that offered new investment possibilities by connecting lenders and borrowers while offering banks a complementary or alternative way of providing funding to businesses. Loans through these platforms can be applied to renovation, purchase, construction, or investment projects by both individuals and large institutions.
Property Management
Landlords’ ways of providing services to tenants are undergoing significant structural changes in the real estate industry. Traditionally, landlords collected rent but are increasingly becoming service providers. Increasingly popular is property As a Service, in which the tenant is freed of all administrative and overhead responsibilities and is offered a tailored property service. This new concept is reshaping our lifestyles, workplaces, and shop. By developing products and services that will help people save time, money and make their lives more affordable, PropTech solutions aim to help property owners and landlords manage their assets more efficiently, quickly, and with more flexibility.
The Top 10 PropTech Startups in India:
Founders: Times Internet
Founding Year: 2006
Headquarters: Noida, Uttar Pradesh
Funding received: US$ 300M
Magicbricks allows property buyers and sellers to search for and inquire about properties in India. Property Pulse is a section of the site that features property news, home loan concerns, legal & taxation queries, expert commentary, and analysis of property trends. Buyer’s Guide is a real estate ebook containing essential steps and stages of buying a property. It provides quick tips, expert advice, and answers on what to look for and how to handle the process. Currently, the PropIndex tool enables investors and property buyers in some key cities to see how residential apartment prices are shifting and supply changes for residential properties in India.
Founders: Akhil Gupta, Amit Agarwal
Founding Year: 2014
Headquarters: Bengaluru, Karnataka
Funding received: US$ 214.5M
Real estate transactions are made more efficient with the help of NoBroker’s peer-to-peer property listing platform. Using the NoBroker platform, customers can find and buy houses without paying brokerage fees or selling homes without commissions.
Founders: Aaditya Sharda, Souvik Sengupta
Founding Year: 2016
Headquarters: Thane, Maharashtra
Funding received: US$ 161.5M
Construction materials and real estate can be found at Infra Market’s online building materials marketplace. It provides clients with fair pricing and superior technical experience through a centralized platform that identifies clients’ needs and matches them to its supply chain along with reasonable credit options.
Founders: Amarendra Sahu, Deepak Dhar, Jitendra Jagadev, Smruti Parida
Founding Year: 2015
Headquarters: Bengaluru, Karnataka
Funding received: US$ 104.2M
The NestAway marketplace allows rental properties to be booked online. By applying the location filter, users can register and search for properties. The site also enables them to secure properties. Listing properties requires owners to provide location, photos, costs, and areas. It has an iOS and Android app.
Founders: Anuj Srivastava, Ramakant Sharma, Shagufta Anurag
Founding Year: 2014
Headquarters: Bengaluru, Karnataka
Funding received: US$ 101.7M
Designers, services, and home décor products are available at Livspace. Shoppers can find designs, decorate, and furnish their dream houses through the online shopping platform. Home interior services are also available. Canvas is a platform designed exclusively for the interior design industry. Homeowners will experience a unique experience, while interior designers will have a more straightforward job.
Founders: Dhruv Agarwala, Kartik Varma, Prashant Agarwal
Founding Year: 2011
Headquarters: Gurgaon, Haryana
Funding received: US$ 85M
Founders of PropTiger have decades of combined experience in real estate both in India and abroad, including alumni from Harvard Business School, IIT and ISB. There are eight cities in India with real estate experts: Noida, Gurgaon, Mumbai, Pune, Bangalore, Chennai, Kolkata, and Ahmedabad. Workforce members are proficient in a variety of residential property buying aspects. The professional will help you with the entire process, from narrowing down your options to finding the ideal house for you and completing the paperwork necessary to complete the sale.
Founders: Kanika Gupta, Tanuj Shori
Founding Year: 2013
Headquarters: Gurgaon, Haryana
Funding received: US$ 73M
Real estate platform Square Yards provides technology for transaction and aggregation. Square Yards’ products include Square Capital, Square Connect, and Square Marketing Technology. Digital lending platform Square Capital offers loans to consumers and businesses. Property brokers can access Square Connect, a unique mobile aggregation platform. With this platform, brokers have access to more primary property listings. Known as SquareMartech, Square Marketing Technologies is a Full-Service Digital Marketing Agency.
Founders: Anindya Dutta, Sandeep Dalmia
Founding Year: 2017
Headquarters: New Delhi
Funding received: US$ 70.2M
Students and working professionals migrating to a new city can move to Stanza Living’s tech-enabled co-living space. To transform India’s multi-billion dollar student housing and co-living market, it offers a high-quality, shared living concept that puts the new-generation migrant at the core of the development, design, and implementation process. The company claims to have 55,000 beds under management across 14 cities, making it India’s largest shared living startup.
Founders: Ajith Karimpana
Founding Year: 2012
Headquarters: Bengaluru, Karnataka
Funding received: US$ 69M
Furlenco provides users with the ability to rent furniture every month through a subscription-based platform. Startups have emerged that offer convenient, reasonably priced and quality furniture and the flexibility to exchange it based on clients’ needs.
Founders: Ashish Srivastav, Sudhanshu B
Founding Year: 2016
Headquarters: Bengaluru, Karnataka
Funding received: US$ 30M
Settlin is a technology-driven, scalable, buyer-centric real estate transaction platform at the end of the resale value chain. A user can search 4x more properties online, offline, and online, curated with 80 parameters, and complete the deal in 5 visits with this online-offline-online model. Through its legal assistance, the user is assured that they will complete the sales deed and registration within four months and 50% less than the industry average. Over the last year, 15 greeters have achieved 4000 visits through a pay-per-visit model.
edited and proofread by nikita sharma