Over the last few years, India’s residential sector has experienced a succession of fluctuations. COVID-19 had an influence on residential real estate as well, with sales and new launches stalling as the market became more cautious.
However, there are signs of recovery, as property sales surged by an impressive 84 percent on a quarterly basis in Q3 2020 (CBRE). This was largely owing to strong legislative support, low mortgage rates, stamp duty and property registration fee reductions, as well as developer incentives and attractive payment programs.
To move forward, the government’s funding mechanism for delayed housing projects, the Special Window for Affordable and Mid-Income Housing (SWAMIH) fund, has helped to improve stakeholder morale.
Though we anticipate sales to gradually rise across all sectors, we expect the mid-end (INR 45 lakh to INR 1 crore) and budget (less than INR 45 lakh) categories to be the most popular and do substantially better.
Despite the fact that the actual transaction takes place offline, over half of all real estate purchases in India are made through internet searches demonstrates the rise of PropTech in India.
With the increasing number of internet users, which is estimated to reach one billion by 2025. Technology is transforming the entire sector in a variety of ways, opening up new opportunities for all stakeholders.
In this article we’ll explore the Key drivers of affordable housing, who is driving the residential sector and technologies boosting smart city mission with Indian stakeholders doing their bit.
Key Drivers of Affordable Housing
Even though the residential sector saw a steep downfall it definitely backed up in the later part of the year. The key drivers enabling the residential sector are-
The Pradhan Mantri Awas Yojana
It’s aim of ‘Housing for All by 2022’ – The PMAY was initiated in 2015 with the goal of building 50 million new housing units by 2022, with 30 million units planned for rural areas (through PMAY-Rural) and 20 million planned for urban areas (through PMAY-Urban).
State-level Affordable Housing Schemes
Slum redevelopment and affordable housing projects should collaborate to provide basic civic facilities such as water, sanitation, sewerage, roads, and power.
The state/UT government and implementing agencies should support the development of beneficiary organizations, such as the Resident Welfare Association, to take care of the maintenance of the residences created under the mission.
Grant of infrastructure
Status to the affordable housing segment which would enable access to cheaper funding.
India’s Young Driving the Residential Real Estate
Multiple industries have transformed with the adoption of technology and real estate is just one of them. Global proptech at large is continuously evolving and India has become a lucrative and dynamic market in Asia Pacific Region.
According to a recent Morgan Stanley research report, a projected sharp increase in the country’s per capita income, increased urbanization, and a stronger federal hand on regulations could push annual property market sales from $105 billion in 2015 to $462 billion by 2025.
Over the next ten years, India’s younger workforce, which is approaching home-buying age and expects to gain from the country’s economic progress, is predicted to push the real-estate market dramatically.
From 2016 to 2020, India’s property market is predicted to rise at a 14 percent compound annual rate, and 18 percent from 2020 to 25.
Over the next ten years, two key initiatives digitizing its largely cash-based economy and modernizing its antiquated tax structure make it one of the world’s fastest-growing significant economies.
While Indian enterprises are the most directly impacted, the global consequences are far-reaching. According to KPMG, India will be the world’s third largest real estate market by 2030, with the sector accounting for nearly 15% of the country’s GDP.
The India real estate market took a while to get acquainted with tech, but it has now accepted its benefits and how it can transform the industry for good. In India, technology and platforms aimed at the residential sector have dominated PropTech.
The emergence of the middle class and millennials, income growth, increasing smartphone penetration, availability of technical expertise, urbanization, and the government’s increased smart city projects and digitization are all important drivers.
Smart City Missions
Nearly 31% of India’s present population lives in cities, which account for 63 percent of the country’s GDP. With rising urbanization and fast GDP development, another 15-25 percent of the rural population (200-350 million people) is expected to migrate to cities by 2030. Without major urban infrastructure support, such a migration cannot be handled.
With this in mind, the government has launched the Smart Cities Mission, which is a large-scale initiative aiming to cover 100 cities. Ahmedabad, Agra, Bengaluru, Chandigarh, Bhopal, Dehradun, Gandhinagar, Indore are just some of the smart cities in progress.
Each selected city’s Smart City project would include either a retrofitting, redevelopment, or greenfield development strategy, or a combination of these, as well as a Pan-city feature with Smart Solution.
It’s vital to keep in mind that pan-city is an optional feature. Because Smart City is based on a compact area strategy, all city residents must believe there is something in it for them as well. As a result, a need for some city-wide smart solution has been added to the project in order to make it more inclusive.
Any such ambitious effort must include technology as a crucial component. Blockchain, Cloud Infrastructure, Geo-location services, Internet of Things (IoT), Artificial Intelligence, and Augmented and Virtual Reality (AR/VR) advancements can all be attractive building blocks for future smart cities.
All these technologies are going to be crucial in supporting the smart cities of the future-
This technology could help smart cities in digitizing records while simultaneously making buying and selling easier with sensitive transactional data. To some extent some select companies are making it possible of eliminating exchange of money completely as well.
RealX is one such pune based digital platform that enables everyone to buy, sell and gain from fractional ownership in properties. Once a property reaches its sale price, the property goes offline and the sale is executed at the registrar (with names of first co-owners as part of the sale deed).
Post registration, the same set of co-ownership records (as registered) are created on a Blockchain based registry system (called PropChain) for all successful property transactions.
Another One making huge strides in blockchain is Q3 Technologies that is helping remove the hassles of legal agreements and eliminate the paper money exchange.
According to Niti Ayog by 2030, blockchain is expected to produce USD3 trillion in annual corporate value making Indian real estate very crucial.
Internet Of Things (IoT)
Improved utility solutions, traffic flows, implementation of electronic road pricing based on congestion, management of properties, and have a centralized tracking and command and control system for traffic management with IoT enabled transportation systems, locking systems for security, etc. Will have effective use of data from various sources, and processing information in real time to take immediate action could help the mission of smart cities.
WeGot is one such company that stands for water, electricity and gas of things, it’s a Bengaluru-based utility solutions company. They install a smart sensor on water and gas pipes that lead to your house, they help record the use of water per household.
It also checks for the water and cooking gas leaks. You get an SMS alert when there is a leak, so does the society secretary and the maintenance committee of the building, so somebody can fix it soon.
Cosine Labs is another great company as a which has patented IoT platform that integrates all IoT hardware into one dashboard for easy management and control of all your properties.
Cosine Labs has created customized and price sensitive IoT solutions expansing across Facial Recognition based Access Management, Automated Door Management with custom made Cosine Labs Digital Door Locks and so on.
Cities may now access and employ vast computing resources that were previously too expensive to possess and operate. This is utilized in traffic control, rubbish collection, resource planning and allocation, workflow management and citizen involvement, among other things.
Propstack in Indian real estate has taken the lead in proving to be an analytics and workflow solutions platform and developed in response to a need for greater market transparency. It provides predictive and prescriptive analytics based on their deep data which forms the core of their clients efficient and smart decision making.
Another such company is CRE Matrix it has developed proprietary algorithms that relentlessly provide up-to-date information and enable deep data analytics across sectors and geographies. CRE Matrix aims to be the largest custodian of registered information in the real estate sector.
It helps in asset comparison and valuation, benchmarking, demand supply analysis on transactions and accurate forecasting.
Other such companies making noise in providing data driven information are Magic Bricks, Square Yards, 99Acres, Housing.com, India Property and others.
Drones and Cameras
Through predictive policing in major cities, it can be employed in crime prevention and control. These technologies are expected to be economic game changers for governments, city planners, and city administrators. They will change the way we develop, administer, and manage cities in the future, making it more efficient.
Equinox’s Drones provides aerial data through drone survey and mapping is proficient, pocket-friendly, and accurate. They also offer highly accurate and detailed GIS Surveying, drone inspection, mining services, flood Assessment, crop health monitoring, topographic survey, UAV data processing, 3D mapping, and aerial photography
Dart Drone, Pulse Tech, Idea Forge, AeriZone and many more are using their services for mapping and surveying and helping residential property clients, and empowering enterprises with construction surveying and inspection with aerial shots among other uses.
These listings could include places like apartments or houses with little or no land attached, all the way up to large estates with lots of acreage. One great angle is from 30 to 70 feet high at a corner of the property facing in towards the main building.
Property Management Software’s
Buying and selling property can be a daunting task especially when you have a number of them to handle. On top of that managing those properties and keeping them good for the clients is a tough task.
That’s where companies like MultiLiving, Home Buy, NoBroker, NestAway, Home Inspektor, Ghar 360, Grab House, among others are disruptive startups and companies paving way for people to buy, sell and manage seamlessly at the comfort of their home backed by advance tech.
Rapid Changes and Evolving Residential Real Estate
When it comes to technology, we always tend to overestimate its impact in the short term while ignoring and underestimating its impact in the long term.
Even though real estate has been slow to adapt to technology, it has made quick strides in coming up with competitive tech to make work easier. A number of startups and companies have emerged in the past few years to make up for the gap. Whether its drones, blockchain, IoT or management tech, it has made work easier and seamless.
The real estate market will be enabled and possibly compelled to innovate as a result of new technologies making easier for real estate stakeholders to buy, sell and manage more seamlessly.
At DevX we fund tech startups along with many Proptech startups to help them in their journey of growth. That’s why we’re writing more about proptech and and how’s its transforming Indian real estate.