Let us just start with accepting the fact that the real estate sector in India is battle ravaged. 2015 was not the best year for the industry, as a matter of fact; the sector has been reeling from a slowdown for a fairly significant duration now. In spite of price reductions, offers and other sops, surplus inventory remains. A recent news reports suggests, prospective and existing home owners are increasingly venting their anger against builders by dragging them to Consumer courts and relevant forums over unfulfilled promises and un-matched expectations. While the retail real estate segment is still looking at far more cheerful prospects, it will be some time before one can pop the champagne.
As per industry estimates, India’s real estate market is expected to be worth close to $180 billion by 2020. Approval of various Smart City Projects as well as relaxation in FDI (Foreign Direct Investment) norms will be contributing to the growth of the sector. However, what is surprising is that for a sector, which at present is the fourth largest in the country with respect to FDI inflows, real estate remains woefully backward when it comes to innovation especially in terms of adoption of technology to help eventual buyers.
Technology in any industry, by providing better quality information/ added convenience to the end customer, helps create greater efficiencies for both the seller and buyer. It improves the overall product experience and makes the buyer – seller relationship more transparent. While it cannot be denied that this sector has remained largely traditional, it can be safely said that course correction is well and truly due.
Take the example of Housing.com, the poster boy of all that is innovative in real estate and, unfortunately, also of all that which is wrong in the start-up space. Back in 2012, Housing undertook to solve the deceptively simple problem of house hunting. The idea definitely had merit and it continues to show its potential. Players such as Housing, Magicbricks, Prop Tiger and Quikr Homes today are helping prospective home owners hunt houses at far greater convenience and with a lot more information by incorporating innovative listing features that helps buyers engage better with that they wish to buy or lease. It is largely due to this innovation that the organised Real Estate segment is currently pegged at Rs. 2700 crores.
In another instance, last year, Ecommerce marketplace giant Snapdeal reported that its real estate segment had grown by 400 percent within the first six months of inception. The numbers must have been really attractive, because, now one hears that Snapdeal might be in talks to acquire one of the big boys in the RE listing space.
The point here is that in this age of instant gratification; consumer centric technology in the real estate domain is key. It can not only translate into better decision making for customers, but can also lead to real money for businesses over time.
Speaking about better decision making, companies like Zillow, Trulia etc are introducing number crunching to the real estate segment. These firms are helping potential customers search and identify properties better thanks to an increasing focus on newer ways of data visualization and analytics. This trend also means accurate assessments for property sellers. Analytics can also aid developers in defining what is it that prospective customers look for when it comes to property searches and offer the most suited products in their portfolio. Closer, back home, there have been conversations around players such as Housing.com planning to add analytics muscle via acquisitions. Quikr, in fact, has already bought analytics company, RealtyCompass as per news reports, last year. These clearly indicate that major real estate players in India have already warmed up the concept of analytics to serve customers better.
One rather, interesting development has been the slow but steady adoption of a technology as disruptive as Virtual Reality (VR) in the realty space. Imagine the ease in the entire decision making process if a customer could be shown through his or her entire apartment without it even having been built. An increasing number of start-ups too are taking the power of VR to property developers to show prospective customers what exactly their homes could be like. The offered features include full blown, highly immersive VR walkthroughs that feel quite like the real deal. This would revolutionise property hunting by allowing customers the entire control of what they wish to see with real time representations.
The potential could perhaps be understood if I were to indicate that Matterport, a silicon valley based immersive VR Solutions Company, has already picked up a series C worth $ 30 million and, is working closely with Google’s project Tango for 3D indoor mapping. Matterport already has some real estate players using its products.
Let alone the end consumer, such a technology could even help construction – a massively fragmented industry - become more collaborative and waste free (in terms of time, effort and money). Having been a part of leadership teams in Design and Construction for over 15 years now, I can state with a lot of conviction that there are serious challenges related to drawing comprehension and version control that adversely impacts the process of project delivery and results in massive wastes. VR actually has the potential to address these issues by providing real time models of one version of truth for all project stake holders.
Not many know of this story perhaps, but that does not mean that tech leaders of today have given up on the power of literary imagination. As per a report in the New York Times, Oculus, the face of everything VR, hands out a copy of the sci-fi novel, ‘Ready Player One’ to every fresh hire. Magic Leap, the super secretive AR (Augmented Reality) start-up, has Lord of The Rings Director, Peter Jackson as a Board Member. The idea therefore, is to have creative minds around who can not only predict the next big technological marvel but also determine potential uses of it.
Before we conclude, allow me to introduce you to Mr. Frank Wang, Founder of DJI Technologies. As per Wikipedia, DJI manufactures a range of products including flying cameras. Mr. Wang’s DJI made drone once famously crash landed in the White House premises. However, that definitely did not deter his drones from capturing 70% of the world drone market (As per Frost & Sullivan). As drones are increasingly finding usage in every other industry, realty too has made a humble contribution to DJI’s fortunes. Yes. Drones are fast becoming a popular way to capture aerial views of properties, helping developers offer potential customers a panoramic view of their prospective homes/office spaces etc. While we might be still far away from having a drone marketplace such as DRONERS.IO, there are start-ups like AirPix, Applications etc which are offering drone technology led solutions.
It might take some more time though before customers in India can actually start experiencing the benefits of all this cutting edge technology in a more wide spread manner in this segment. Adoption of any technology requires sufficient capital and training. In a market largely dominated by the traditional mode of being, it is difficult to ensure both the inflow of capital as well as immediate change in mindset.
Innovation will however, continue and, with increased PE activity in the sector, technology adoption too will become a part of the business strategy. Its not a luxury, a good to have; it’s a change that the industry has been crying out loud for and for a while now.
As featured on EtRealty