Bricks To Bytes

Real estate is very much a brick-and-mortar business in India. But even this industry has moved to adopting technology, a process pushed forward in earnest by the pandemic. Proptech (the use of technology in real estate) is an upcoming field, with developers as well as large real estate consultants transitioning to tech tools in a big way. The government, too, has taken tentative steps in this direction.

“Covid-19 has only accelerated the need to adopt technology in Indian real estate. This will not only help them reduce their overall operational costs but also in delivering projects much faster,” says Anuj Puri, chairman, Anarock Group, a real estate services company.

The most significant impact of digitalisation has been on the home search and buying process, an aspect especially important in an era where work from home is the norm. The changes have been in two broad directions. Most of the developments have been in the customer-facing segments such as search optimisation, virtual tours and automation. However, processes such as property registration have also become tech-based.

We take a look at some of the key technologies that have transformed the real estate industry in recent times.

Augmented And Virtual Reality (AR, VR)

AR and VR allow buyers to experience properties virtually. “Experience makes or breaks an investment decision in real estate, apart from influencing the pricing factor. VR has been around for some time, assisting by way of walkthroughs, virtual staging for prospective buyers and architectural visualisation to enhance the benefits of development to the buyer,” says Ajay Sharma, managing director, valuation services, Colliers India, a real estate services and investment management company.  

AR provides a more immersive experience including allowing for measurement and application of ‘magic plan’ to create and edit floor plans, allowing for multiple 3D visualisations of the space. This helps in understanding how each space will work for every customisation a buyer may want. Use of artificial intelligence (AI) has pushed the boundaries to such an extent that the AR experience is now available on a mobile phone.  

“Drone technology has also been helping in creating virtual tours for the property and the surroundings,” says Rajan Sood, business head, PropTiger.com, an online real estate services and brokerage company.  

The main purpose, however, remains providing the best-fit options. “Such technologies enable homebuyers visualise their prospective home and allows them to do virtual walkthroughs of a home even before it’s complete, thereby enabling them to make more informed decisions,” says Puri.  

Smarter Chatbots  

Chatbots have made 24x7 assistance possible. Not only that, “they make life easier for a buyer by narrowing down the choices with less effort. Parameters like budget, type of property, size, etc., ensure that the buyer is only provided the most relevant listings immediately, which piques their interest,” says Sharma.  

For sellers, chatbots help in retaining the attention of the buyer, thereby increasing the probability of making a sale. Once the buyer has shortlisted a property or a set of properties, a chatbot takes the process further by scheduling calls with the right representative and providing multiple alternatives if the shortlisted opportunity does not work out.  

Chatbots can be embedded into social media pages as well, providing ease of access. The buyer doesn’t have to navigate to the webpage to research; he or she can straight away start with the chatbot.

“The unhindered 24x7 availability of chatbot reduces loss of opportunities for the developer and provides a better client experience. Further, chatbots are programmed to follow up automatically, which ensures constant connection with buyers and increases the probability of sale,” adds Sharma. And, when needed, chatbots can escalate queries to the support staff. “Unlike a traditional chatbot, AI-enabled chatbots are far more real and conversational,” says Puri.  

Big Data Analytics

One of the problems that has plagued the real estate market is that it is very fragmented. Big data analytics helps decipher the market dynamics. Based on specific parameters, big data can help arrive at profitability on an investment, the right time to exit an investment and even the strategy to build a portfolio. “Analytics are effective risk mitigants for an investor or buyer in real estate which has been synonymous with volatile markets and financial margins. With use of big data, accurate appraisals can be undertaken with minimum error tolerance. This is especially useful for funding institutions and buyers in deciding the right price for an asset,” says Sharma.  

Marketing teams or investment bankers can understand consumer preferences, precursors to new development and comparisons between markets. With appropriate data, a business strategy can be formed to address the requirements of a market or customer segment, creating tailor-made products.  

IoT-Enabled Homes

Internet of Things (IoT) is a holistic approach to connect all physical objects that have the necessary hardware to process and exchange data. Many residential developments use such smart devices in segments such as temperature regulation, lighting, security and electronic devices. “True IoT solutions are linked to interacting with the occupant and enabling devices in the home. This highly expensive amenity is on offer mostly in high-end luxury or premium real estate developments where personal devices such as mobile phones are used to control certain home devices and also enable automation,” says Sharma.  

Attempts are being made to marry AI and machine learning (ML) with IoT to enable truly smart homes, which are expected to understand habits and consumption patterns that personalise the space and its experience for the user.

Shorter Paper Trail

Among all investment documents a person has, the thickest file tends to be the one that holds property-related papers. The government has for long been trying to shorten the paper trail that property transactions entail, with some success.

• Digitalisation of stamp duty: Most of the visible benefits of digitalisation are at the transaction end of the business, but there’s more to the story. Legal aspects such as stamp duty and registration have also been smoothened, benefiting customers ultimately.  

“The advent of Digital Document Execution (DDE) platform under the paperless transaction drive has been a blessing as it has brought down the time taken to complete contracts and agreements. This would, typically, require a significant amount of time, which included the time spent on procuring a stamp paper of the correct value based on the value of the transaction,” says Sharma.  

Given the smoother interface between banks and state agencies to implement digital stamp duty, e-stamp has eased the documentation process a lot, resulting in a jump in credit flows as well as stamp duty revenues that were usually considered as slippages.  

Now institutions like the Reserve Bank of India (RBI) require banks and other financial services institutions to maintain digital copies of all documents. So, DDE is fast becoming the preferred platform, reducing paper usage, optimising storage and bringing down instances of lost documentation.  

“Payment of stamp duty online is enabled in most states. So, in the entire property registration process, the buyer and the seller have to physically visit the sub registrar’s office at a pre-appointed time only once,” says Sood.  

During the Covid pandemic, many agreements were executed or renewed using the online platform with e-stamping facilities. “Leave and license agreements are largely undertaken online. E-stamping holds the agreement valid, reduces duplicity of documentation by providing a unique identification number and provides for checking the authenticity of the e-stamp paper,” says Sharma.

Since the introduction of the digital land records programme, 16 states and some Union Territories have adopted e-stamping; in others, implementation is ongoing. The overarching result is expected to be structured data stacking, minimal duplication and reduced fake documentation.  

• RERA Websites: The Real Estate (Regulation and Development) Act, 2016 (RERA) was introduced in 2016 to bring more transparency to the real estate sector, and is almost completely a digital platform. “State RERA websites are strictly and regularly updated with online records of registered projects, their units and components, construction progress, etc. Just as Aadhaar has given people a distinct and fake-proof digital identify, RERA websites have given real estate projects distinct digital identities. They are a quantum leap towards transparency and accountability,” says Puri. Many states have also made the process of filing a complaint under RERA fully digital. However, RERA is work in progress. For example, as of April 24, 2021, only around 63,580 projects and 50,250 real estate agents have been registered under RERA across India, according to Anarock Group. Apart from this, its execution powers are limited and its officers do not have the infrastructure to vet projects thoroughly.

Many steps have been taken to digitalise the real estate industry, but much work remains to be done. “India is a huge market and not all players have woken up to the need of tech adoption. This may create a lopsided playing field where players who want to stick to traditional ways of doing business may be faced with a disadvantage,” says Puri. In the future, only entities who embrace and imbibe technology in a big way will be successful.

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Increased Digital Access

Enhanced Visualisation

• Augmented reality (AR) and virtual reality (VR) is enabling 3D visualisations of properties in walkthroughs, virtual staging for prospective buyers and architectural visualisation
• Drones create virtual tours of the property and surroundings

Anytime, Anywhere Information

• AI-powered 24x7 chatbots answer user queries as well as provide relevant information immediately based on parameters such as budget, type of property, size, etc
• Chatbots are embedded into social media pages for ease of access 

Smart Homes

• Internet of Things (IoT)-enabled homes let users control temperature, lighting, security and electronic devices without active intervention

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Simpler Registration

Digital stamp duty has simplified the property registration process and authenticity checks

It is also leading to a jump in credit flows and stamp duty revenues

Digital Document Execution (DDE) platform has reduced the time taken to complete contracts and agreements

meghna@outlookindia.com