With traffic to online real estate sites on a huge upswing, the digital mode of selling property is setting a new trend in the realty saga.
The Internet is influencing consumer behavior as seven out of 10 buyers know the exact brand and model they want to buy with the help of online research, says a study by Google India.
The recently held Great Online Homes Festival (GOHF), organised by Magicbricks, Google and Group M, is testimony to the impact. Despite tepid property markets, the 10-day property fare was a huge success. It generated more than 50 lakh visits resulting in over 10 million minutes spent by visitors. A total 9 million page views were generated, resulting in property sales worth Rs 300 crore and over 500 bookings being achieved online. In addition, 4,000 coupons were generated along with a surge in property queries resulting in 48,000 enquiries from customers spanning all income groups.
Growth graph
In the current scenario, drivers for online transactions are convenience, choice and discoverability along with urbanisation, industrialisation, influx of the IT sector and affordability.
´The online real estate classifieds business would be about $50 million, while online transactions would be about $30 million,´ says Dhruv Agarwala, CEO & Co-Founder, PropTiger.com. Meanwhile, Pankaj Kapoor, Managing Director, Liases Foras, shares his stats, saying, ´The selling online business may not be more than 1 per cent of the overall market.´ True, perhaps. But traffic to sites has been undeniably going up. In the past few months, Magicbricks has been clocking 10 million visits on its site. Sudhir Pai, CEO, Magicbricks, says, ´Our internal data suggests that digital search today accounts for 60 per cent.´ People who buy homes do some form of research online and that number has been growing rapidly. And Agarwala tells us PropTiger.com has witnessed maximum number of sales in Bengaluru, Pune and Mumbai. Which properties tend to do well? ´Large group developments launched by reputed builders,´ he responds.
Another player with a strong presence in the southern and western markets is Indiaproperty.com. Ganesh Vasudevan, CEO, Indiaproperty.com, who views the North, South and West as equally sized real estate markets, shares, ´While in southern markets, buyers prefer to buy apartments, villas and land, in the western markets, demand is more for apartments.´
Recording sales
The total residential real estate transaction value in India, which includes apartment and plot sales, is currently estimated at $80 billion. Of this, Pai sees online influencing over 60 per cent of all purchase decisions. Also, in another decade, the total real estate transaction value is projected to reach $180 billion, half of which is expected to be influenced by the online channel.
A study conducted by Google last year lists its own numbers: 53 per cent of all such real estate transactions were influenced by the online medium. Agarwala expects this percentage to rise in the future. However, he adds, ´Purely online transactions are beginning to happen but primarily in the market for new homes, which are yet to be constructed.´ It will take a few years before this becomes the preferred way to transact a home.
Also, if around 75-78 per cent of the overall real estate industry is residential, the balance 22-25 per cent is commercial real estate. And Commertia has tapped this 25 per cent as its big opportunity. Highlighting the demand in the commercial space, SA Malik, Founder & CEO, Commertia, shares, ´In just 10 days, we received over 150 projects; 1,500 plus agents; more than 120 builders; and around 18,000 properties, which is roughly worth Rs 25,000 crore.´
Mergers and plans
Although the online real estate market is still in its infancy, the property search market has evolved radically over the past few years. Mergers are done either to add new strength to the existing portfolio or to benefit from innovative ideas through successful mergers and acquisitions.
´We are the first to have kicked off the move towards consolidation by buying Makaan.com to become the only end-to-end classifieds to transactions player in the Indian market,´ says Agarwala. For his part, Vikas Malpani, Co-Founder & Vice President-CommonFloor Groups, CommonFloor.com, says, ´We made two acquisitions, namely Bakfy and Flat.to, in the past year. We also invested $2.5 million in a new chat-based solution model called Flatcha6t.´
Era of innovation Online portals are offering many unique features that online home buyers and developers would find immensely valuable. Some selected features include:
For PropTiger.com
For Magicbricks
Visitor watch
Innovative features that online sites offer have widely attracted visitors. As Vasudevan avers, ´We have seen 200 per cent growth in the number of visitors on our site in the past year. On an average, we see 1,000-1,200 sales per month.´ Prospects are bright for PropTiger.com as well. ´We are witnessing over 30 per cent quarterly traffic growth on our website despite a slowdown in the market,´ says Agarwala. And Malpani confirms that, recently, CommonFloor has seen a great surge in mobile usage and its mobile user base has increased exponentially. ´In the past six months, our mobile traffic grew by over 65 per cent. The average time the user spends on the website has also increased and our conversion rates have improved by up to 50 per cent on both desktop and mobile.´
Zone: Tier-II and Tier-III
The Internet has indeed shrunk the world, and home buyers everywhere have much to benefit. Tier-II and Tier-III cities also won´t be far behind in taking to buying homes online.
As Agarwala says, ´A major driving factor behind this trend is greater awareness and growing interest from real estate majors to launch projects in these cities.´ Pai adds, ´Tier-II cities have interest from not just locals but people who have migrated out but remain interested in buying or renting in their hometowns.´
FACTORS DRIVING ONLINE SALES
Surfing ahead
Quite naturally, with the growing number of developers selling properties online, online real estate portals are witnessing good growth in their business.
´About 70 per cent of our revenue comes from services and advertisements related to selling properties; it occupies a much larger ticket size than the rental market,´ says Malpani. He adds that the company is akin to the Google model. Property developers or individual owners looking to sell their property have the option to list their property for free and there is also a premium level. It´s a subscription-based model. As the company continues to scale up marketing and operations across 18 cities, it will also expand to 22 new markets in India.
With over 50 per cent annual growth in revenues, IndiaProperty has witnessed fast growth in the online real estate industry. Vasudevan says, ´On an average, we get 2.5 million visitors on our site and month-on-month, IndiaProperty sells on an average 1,000-1,200 properties. We have 6 lakh plus property listings with 1 lakh new listings added every month.´ Agarwala confirms that since inception, PropTiger.com has sold over 12,000 properties worth $1.25 billion. And, confirming that Magicbricks is scaling up aggressively, Pai says, ´Traffic on our site has crossed 1 crore visits per month recently. Listings have exceeded 12 lakh and continue to grow.´ The company has grown its sales presence to 44 cities and shall soon be in 50 cities nationwide.
The world is evidently going digital. In this scenario, online media is becoming increasingly relevant for builders and developers to engage with prospective buyers and build confidence in their product. What remains to be seen is the extent to which the online channel will influence sales in the long run.
Quick Bytes
Total real estate transaction value in another decade: Projected to reach $180 billion, 50% to be influenced by online channel.
Growth drivers: Convenience, choice and discoverability, urbanisation, industrialisation, influx of IT sector and affordability.
Tier-II and Tier-III cities: Not too far behind from taking to buying homes online.
Chat with Brotin Banerjee,
CEO and Managing Director, Tata Housing online
Why online
In a way to break the clutter by offering ease of transaction to our consumers globally, we decided to pioneer the online sales of real estate with Google Online Shopping Festival (GOSF). We followed it up with the national home buying day, allowing our consumers to buy their homes from the comfort of their homes.
Sales status
Tata Housing has offered its buyers projects across a wide spectrum ranging from Rs 12 lakh to Rs 12 crore. Our various innovative partnerships have resulted in the sale of over 1,500 apartments online translating into over 1 million sq ft to date.
Highest rated property sold
An NRI customer purchased a house at our luxury residential project Myst in Kasauli worth Rs 5.5 crore, while another Mumbai-based customer bought a house at our luxury project at The Promont in Bengaluru for Rs 4.5 crore.
Value-added services for the end-user
We enable complete transparency with our consumers; they can take a virtual tour of the property online, which cuts through geographical barriers of physical touch and feel. Recently, Tata Housing launched an integrated payment gateway to allow customers to make their entire home purchase online. Apart from that, the online medium allows for some exciting initiatives; for instance, we started an online digital exhibition for selective consumers.
Strategies to leverage this medium
The online sales numbers are much smaller compared to offline. Online and social media are extremely relevant for real estate marketers as they help engage prospects and build confidence in their product. The percentage is bound to increase in coming months, but this is directly proportional to the trust the consumers have in the brand.
Chat with Bimal Hegde, CEO, Chartered Housing online
Why online
The growing trend of customers checking, analysing and comparing services and products online holds true for real estate as well. The growing sentiment of assessing the project online before approaching the developer has also gained momentum. As a developer, it is important to reach out to these discerning buyers within the age group of 35-45 years given that they hold a high percentage share in the core customer base.
Sales status
We have witnessed a high number of enquiries and leads generated from the online platform, and have converted many into sales.
Highest rated property sold
We have been successful in selling our mid-segment projects with a ticket size of Rs 55 lakh to Rs 75 lakh.
Value-added services for the end-user
The user experience for customers gets better online; one is able to access more information in lesser time and in a more efficient manner.
Strategies to leverage this medium
Online sales channels gives a sense of freedom to developers to advertise effectively and efficiently to the target audience compared to any other platform. However, online platforms should not be looked at in isolation and require a level of integration to ensure effectiveness. Our online strategy is high on interaction and we try to personalise it according to customer interest and tastes.
Chat with Ashish Puravankara,
Managing Director, Puravankara Projects online
Why online
We started marketing our properties online since 2011, with a strategic online media plan to generate enquiries. What started off as a ´lead generation´ platform has now garnered enough consumer confidence to become a ´transaction fulfillment´ channel, giving consumers the ability to not just know more about the home they want to buy, but to actually go ahead and purchase their dream home online.
Sales status
Seventy-five per cent of our enquiries are generated online and 50 per cent of our total sales conversions are contributed by online marketing. Today 5-10 per cent of our conversion comes from online customers wherein transaction fulfillment is also completed online. We have sold properties online with costs ranging from Rs 25 lakh to about Rs 1.5 crore, across Provident and Puravankara projects.
Highest rated property sold
Our project Provident Sunworth has been the frontrunner in terms of conversion of online enquiries so far.
Value-added services for the end-user
Buying homes online from Puravankara and Provident is now as easy as buying any other lifestyle product online. Customers can book a home online, visit the site and check it out in leisure, change their choice and return or cancel the booking with a full refund.
Strategies to leverage this medium
At Puravankara and Provident, we believe in technological advancement in e-commerce, which includes real-time selling of properties online, as the way forward. We have been constantly adding new technologies online to improve consumer engagement and ease of doing business.
Chat with Kamal Khetan,
Chairman and Managing Director, Sunteck Realty online
Why online
We opted for the digital or online route over the past year or so with an aim to increase visibility. We realised that luxury projects by a premium brand like Sunteck with the ticket size of around Rs 1.5 crore -Rs 2 crore are appealing. And with various tie-ups and the way the brand positioning has happened, such projects attract a lot of eyeballs and conversions online by an NRI audience.
Sales status
In terms of conversion - directly or indirectly - at least 20 per cent has been contributed by online visibility.
Highest rated property sold
As we offer luxury projects, our ticket sizes are much larger. That said, we have received a good response for our projects Sunteck City Avenue 1 and Avenue 2 in Goregaon - the ticket sizes start at Rs 1.4 crore-Rs 1.45 crore and go up to Rs 2.5 crore. Now, we are doing something similar at our upcoming project called Signia Waterfront, which has an attractive ticket size of Rs 1.5 crore onwards.
Value-added services for the end-user
One big service that can be offered is home loans. This makes things easy for the person sitting outside India as well. So, helping customers with home loans, smoothening the entire documentation and easy transactions and conversions are value-added services.
Strategies to leverage this medium
Websites are being made compact and easy to handle. Companies are investing in technology and the next couple of years will witness more presence online.
- Shriyal Sethumadhavan
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