To the uninitiated, these statistics are key markers that hint at a strong, optimistic, and growth-driven future for the Indian real estate sector. Let’s take a closer look at how they intersect
To the uninitiated, these statistics are key markers that hint at a strong, optimistic, and growth-driven future for the Indian real estate sector. Let’s take a closer look at how they intersect
It is no secret that, by leveraging technology to facilitate more seamless, accessible, and secure transactions, fintech solutions are transforming the way India conducts business. This paradigm shift reflects most strongly in the real estate sector
Tenants can now automate their rent payment cycles through online platforms and pay with debit/credit cards instead of cash. Homebuyers can avail of home loans with relative ease, from the comfort of their homes, as lenders make use of advanced algorithms to accurately evaluate creditworthiness and conduct identity verification through eKYC. Loan disbursals are also much swifter, taking mere days instead of months, without the extensive paper trail and time-consuming approvals associated with offline loan application process. The advent of newer technologies such as blockchain and AR/VR has even made it possible to verify, purchase, and legally transfer a property without ever making a physical visit, a process favorite among NRI buyers
All of this suits the typical millennial consumer. Having grown up with and around digital technology, they demand that the services most relevant to their requirements be made available and accessible at the point of need. They also want more spacious, well-appointed homes with ample green cover and seamless access to amenities such as schools, hospitals, etc. – and all this can be ascertained via technology and without physically visiting the premises. The more evolved preferences and sensibilities of this new-age clientele have driven real estate companies to re-evaluate every aspect of their operations, from project development to pre-sales engagement and post-sales satisfaction
Since the consumer demographic in the sector has changed considerably in the post-pandemic landscape. A recent report by NoBroker.com highlighted that the number of millennial homebuyers has increased from 49% to 63% since the viral outbreak. Key metropolitan areas such as Bengaluru and Mumbai, in particular, have seen a drastic increase in the concentration of millennial homebuyers
And they are driving the trends that will shape the long-term future of the real estate industry. Year-on-year sales of 3BHK housing units grew by 19%, with 30,169 units sold in Q1 2021 compared to 25,307 units in the first half of 2020. This growth marked a rising preference for more spacious housing, coupled with the desire for a better living experience
Potential homeowners in India, particularly the millennials, were also more willing to relocate to the suburbs to live in larger, relatively inexpensive homes. In a survey conducted among 100 builders, 59% of respondents observed a higher demand for properties located in suburbs. Builder discounts were also well received by new-age Indian consumers, with 87% of the surveyed builders mentioning how offering discounts led to an increase in sales
Real estate companies are paying heed to the rise of millennial homeowners and using technology to enhance their end-user offerings. For instance, the use of drone surveys – along with simulating project construction with 3D maps, models, and blueprints – has enhanced the quality and speed of construction and planning. They are also using AR/VR and 3D rendering solutions to facilitate virtual tours, enabling a 360-degree view of the desired property on any end-user device. This saves time, effort, and money while adding a layer of safety and security during the pandemic. Another example of digitization in the real estate industry is the growing popularity of digital MSPs (multisided platforms). MSPs can greatly simplify the search and delivery of real estate services such as viewing listings, comparing rates, scheduling, and booking appointments, making payments, etc. without the biases, information asymmetry, and superfluous costs associated with middlemen. These platforms are also creating an end-to-end, experience-driven ecosystem by taking care of auxiliary requirements such as packing and moving, post-vacancy home refurbishment, etc
The millennial-led, fintech-powered shift towards digitization is also helping real estate companies become more future-ready by addressing operational bottlenecks. For instance, blockchain-led project management solutions can reduce the credit gap in the sector by allowing tranche-based loan disbursement whenever developers hit certain project milestones. Such an approach can accelerate project deployment and improve disbursal/repayment cycles while reducing NPAs for both real estate and BFSI companies
The post pandemic world has seen consolidation of offline with online as it can be unanimously agreed that online has a much better reach and is the chosen mode for millennials for transaction across industries. Fintech is spreading its wings far and wide by penetrating all aspects of deal closures from rent and maintenance payments to loan applications, EMI payments on home loans and what not
The sector currently stands at an inflection point as it re-evaluates its past practices and adapts to the needs and preferences of a more digitally enabled consumer demographic. Considering the existing and emerging trends, it is safe to conclude that the convergence of digitization and fintech innovations will continue to shape the Indian real estate sector for the foreseeable future. The pandemic has interestingly given a much-needed push to technology adoption in one of the biggest sectors and contributors to Indian economy. From here, fintech is only poised to scale it further as it has addressed an important need gap- that of convenience and shown not just millennials but people at large, a better and more seamless way of doing business. Time to come will witness greater and greater adoption of technology and fintech across aspects of Indian real estate.
https://www.constructionweekonline.in/people/19018-how-millennials-and-fintech-are-defining-real-estate-trends
