An increase in construction activity, especially with a push for affordable housing and infrastructure growth, is indicating the revival of India’s real estate sector. According to the IBEF January 2019 report, the real estate sector in India is expected to reach US$ 1 trillion by 2030. By 2025, it will contribute 13 per cent to the country’s GDP. An emergence of nuclear families, rapid urbanisation, increase in technology, focus on affordable housing and rising household income are likely to remain the key drivers for growth in all spheres of real estate, including residential, commercial and retail. Extensive implementation of the Real Estate Regulation Act (RERA) in the past few months has brought in necessary regulation to a largely unregulated sector and confidence assuring a promising future for the real estate market.
Technology has been playing a pivotal role in the growth of the real estate sector in India. While real estate has been a late-starter, the recent adoptions of technology has made it attractive with the help of numerous innovations and advancements. Technology has led to gains not only for the buyer but also the sellers in Real Estate. Not just in terms of construction, but even in terms of simplifying the property buying process, real estate brokers and agents are slowly adapting newer technologies. We are expecting to see major disruptions being planned in the real estate property transactions space.
From making user experiences much friendlier, to getting in touch with customers within seconds, today our real estate industry has edged tremendously forward. Not only are paperless transactions the norm, but mobile-centric technology has essentially transformed the landscape. Access to information, customer expectations, and client service are very different than they were even five years ago. Technology has increased the construction quality standards and reduced the time taken to build the infrastructure. Which once took months and years to build, can now be achieved in weeks, without taking a toll on the Project cost and labour.
Enhanced automation in valuation, big data and artificial intelligence are technological innovations that are shifting the construction and real estate appraisal landscape. Below are the key trends that will have a role to play in the future of the built environment and to create smart, liveable and resilient cities.
Blockchain: India could potentially become a hub for blockchain technology in the real estate sector as it will bring necessary confidence back in the system. However, there might be further considerations that needs to be taken into account in adopting the blockchain in India. Blockchain will upscale the transparency and overall efficiency of the Indian Real Estate Sector, which comprises involvement of several transactions amongst public and private parties. Blockchain enables safer and faster transactions with minimal manual intervention. With data encryption and no middlemen involved, Blockchain is safe and reduces the cost for the buyers. In real estate, blockchain can help overcome fraudulent behaviour, eliminate intermediaries, support data integrity, and make transferring, buying, and selling of real estate more convenient.
Augmented and Virtual Reality: AR utilises a real-time view of the physical world around us and enhances it by depicting digital information. On the other hand, VR creates a simulated world via supplemental devices that render and display information rather than just reflecting the real world. The concept of Augmented and Virtual Reality could be the next breakthrough in the real estate market where buyers can experience the property without actually visiting the property.Many real estate firms in India now offer retina headgear to view properties virtually in 3D, and e-commerce companies that have developed virtual trial rooms using AR to offer a better customer experience.
Smart Homes and Internet of Things (IoT): IoT is already shaking up the real estate industry at a building level. Today, consumers have home appliances, security cameras etc. which can be remotely controlled via the internet or through Wi-Fi. Consumers can do energy management of their homes remotely. This concept can be expanded to neighbourhood level and district level as well under smart cities programs.
Process Automation: An industry which has seen adoption of ERPs only in the larger players is expected to see a huge uptake of process automations using affordable ERPs based on SaaS subscription model. This helps them move up the value chain without spending huge capital costs in development of bespoke ERPs for their businesses. This shall also create upskilling opportunity for the existing professionals.
Social Media: After demonetization and RERA implementation, Indian Real Estate market has understood the importance of customer connection way better than before. To build and maintain a brand image which is of utmost importance for business, developers are using the help of Digital content support through SEO, ORM, SEM and SMM. Content is more important than ever before and developers have realized the beauty of Digital content which goes beyond promotions and advertisements.
The traditional way of doing real estate business in India is making way for new concepts and business models. This sector will no longer remain insulated from the impact of the new age technological disruptions. The developers will need to adapt to meet the real requirements of the society and be agile to adapt new technologies. The real estate service providers will have to innovate their service offerings. Some of the current smaller players may undergo consolidation or form strategic alliances. Technology and sustainability will be the key agents dictating change. In today’s time it is necessary to speed up the application of innovative and disruptive technologies in real estate sector to get on with dynamic business needs and solutions.
(Nimish Gupta is MD, RICS South Asia)