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What is Proptech? How Can it Boost the Future of Real Estate in India Post the Pandemic?

Sep 11, 2020 5:03 AM 3 min read
Editorial

Heard of Proptech yet? The real estate buzzword which is back in the news...but with heightened relevance this time. 

 

 

What is Proptech?

Proptech or property technology (also known as real estate technology) is a broad generic way of describing the application of technology to the real estate market. It is increasingly being touted as the panacea to post-pandemic challenges and changes in the real estate landscape - both on the commercial and residential front. 

The pioneers in the sector were perhaps Rightmove or Zoopla in the UK or Zillow or Trulia in the US. 

 

What is Proptech? How Can it Boost the Future of Real Estate in India Post the Pandemic?

 

How Can Proptech Boost the Future of Real Estate in India

In a post-pandemic world, where social distancing will be the norm, and customers would increasingly take to online platforms to buy and sell goods and services, these proptech platforms are likely to help see a real estate transaction through to the end - cutting out or at least greatly reducing the dozens of intermediary steps involved in buying a property. 

Needless to say, real estate is a very important asset, accounting for 70%-80% of one’s total wealth, and an important investment tool for banks and pension funds globally. However, it continues to be conservatively-managed, slow-moving and unfavourable for new entrants. Information asymmetry, need for multiple intermediaries, cumbersome and never-ending legal and banking processes are some other problems that currently plague the real estate sector in India.

 

Rise of Proptech in India

Recall companies such as Magic Bricks, 99 Acres, Housing and CommonFloor? Well, these were some of the early proptech startups in India, which primarily focussed on providing a digital platform for buyers and sellers.

Rapid innovation and improvement of Virtual and Augmented Reality is expected to enable many of these in replicating more and more life-like interiors.

Aside from commoditizing the process of discovery, you can also see technology enabled transaction platforms, such as PropShare Capital and Strata, through which you can own “fractions” of commercial real estate properties for as low as Rs 25 lakhs. The REIT just became more accessible.  

 

What is Proptech? How Can it Boost the Future of Real Estate in India Post the Pandemic?

 

Over the years, with consumers seeking a more integrated and end-to-end approach, proptech startups such as Square Yards aim to provide a seamless experience by ensuring that numerous intermittent processes such as agent and customer interactions, site visits, information disclosure, availability of desired unit, financial proposals, mortgages and final closure are all governed and monitored by the tech platform in real-time.

But let’s not get ahead of ourselves here. 

The real estate sector in India remains fraught with multiple challenges, and in order to reap benefits of any technological disruptions, these must be taken care of first. 

Access to credit, delayed timelines, unsold inventory, affordability of houses and impact of GST remain some key challenges faced by housing sector.

With India’s real estate sector expected to balloon to  a $1trn market by 2030, up from the $120bn in 2017, and expected to contribute 13% to India’s GDP by 2025, the future of proptech startups seems fairly promising.  

And given the fact that blockchain technology has made inroads into the real estate sector, the potential that proptech holds, is rather vast.

FIN.

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