The State Of PropTech In India
Many Reports suggest 95 per cent of buyers begin their home-buying journey online, and 51 per cent buy property online. Since the government announced the Startup India Campaign in 2015, there has been an impressive growth in PropTech startups to more than 1,400 in 2022 from just 2 in 2016
For decades, the real estate industry in India has been using conventional models and practices in construction management sales. Rapid technology and digitization adoption have now opened new prospects in this traditional industry. As per a report, the Indian real estate industry is expected to exceed USD 1 trillion in value by 2030 and will contribute approximately 13 per cent to the country's GDP by 2025. Such expansion beckons the need for digital intervention in the current age.
The sector has swiftly transformed its operations by embracing digitization which has opened immense opportunities for technological intervention proptech startups in India.
The amalgamation of real estate with technology and digital solutions, is helping every stakeholder in the sector, from homeowners, real estate developers to EPC and infrastructure players to project financiers. It helps streamline their functions with effective planning and monitoring and makes them seamless and transparent. India is poised to become the third largest construction market in the world by 2025, with the government spending of USD 1.4 trillion by 2025 on infrastructure.
State of PropTech in India
Technological disruption in the real estate sector has had a far-reaching impact. This has been witnessed through the customer journey already. Reports suggest 95% of buyers begin their home-buying journey online, and 51% buy property online. Since the government announced the Startup India Campaign in 2015, there has been an impressive growth in PropTech startups to more than 1,400 in 2022 from just 2 in 2016.
In India, PropTech startups cater to various real estate industry segments, starting from sales, sustainability, construction and finance. Platforms like NestAway, Housing.com, 99acres, MagicBricks, and NoBroker have become prominent names in the PropTech sector, where buyers, sellers, and agents can collaborate and exchange information about real estate. These platforms reduce intermediaries and offer more choices to consumers. Startups have emerged wherein they offer SaaS solutions for construction planning and monitoring for greater efficiencies and lowering outlays in construction. Players like Falconbrick sell such SaaS solutions to Tier-I clients such as Prestige, Embassy, JLL and Indospace, while Powerplay is targeting the long tail of small and medium businesses with on-site products. Market penetration for international players such as Novade, Oracle, Procore, is difficult given the nuances of the Indian real estate industry. It is thus, imperative for solutions to be built in India, for India.
How is the adoption of technology easier now?
With the use of technology and other digital resources, it has become more accessible for people to get detailed information about home prices and other relevant information. The emergence of PropTech
services has helped streamline the home-finding process. Instead of manually visiting several properties, interested customers can find the house they want from the comfort of their homes. The adoption of tech in the real estate sector has become easier because second-generation promoters or builders are now open to the idea of tech for interventions and monitoring. Moreover, the outbreak of COVID helped accelerate the adoption of remote monitoring of sites.
On the backend, SaaS solutions for better project monitoring is helping declutter the unorganized fashion in which projects are executed, with little accountability at every step between the project owner, contractors and project engineers. These solutions allow project owners to monitor construction sites remotely on their computers and anticipate any expected delays in time. These proptech products follow a maker-checker approach for monitoring, planning and forecasting as well as execution, in processes such as materials management, drawing management and billing.
The technological disruption in the sector also helps financing companies track real estate projects ahead of the disbursement of financing. Also, the Defect Liability Period clause under the real estate regulatory authority (RERA) now necessitates the builders to identify gaps at site which is made simple by proptech solutions today, thus, giving the homeowner a better quality home.
Funding trends and opportunities in PropTech
PropTech in India has grown in the last few years, driven by the pandemic-induced digital acceleration. This has offered much-needed transparency, streamlined transactions, and better access to data, practices unheard of in the industry before.
The Indian PropTech ecosystem is growing steadily despite the challenges. With inbound interest in the sector with infrastructure and real estate scaling and signs of tech adoption being seen from the market, the space has recently witnessed increased funding. Continuing interest form the venture ecosystem will further accelerate the pace of growth of companies solving for the real estate industry.
(The given article has been written by Neha Khanna, Director, ValPro and Enablers)
Around The World