Real estate industries investing in Proptech may soon witness their fortune turn post COVID19 outbreak. The companies that were overlooked from investors so far will embrace this technology in their business at the earliest to reap the maximum benefit out of it. Proptech is used by real estate firms to augment how they sell, buy, or rent the property.
Dhruv Agarwala, CEO of Housing.com, PropTiger, and Makaan.com CEO, addresses a webinar organized by media company Entrepreneur last Thursday. He speaks about the quick embracement of digital technologies in this segment after the outbreak of coronavirus and nationwide lockdown in India from March 25th.
He stated that there would be an enhanced acceptance of the latest technologies across the value chain, be it construction, designing, property management, or sales and marketing. While sharing his own experience, he mentioned that the total traffic of his three platforms dropped 40% in the first week of the lockdown compared to the previous few days. But as expected, the traffic has bounced back and is more than 20% more from the COVID level.
According to Agarwala, PropTech players in the real-estate business found it challenging to raise funds compared to technology counterparts in various other industries, like food & beverage and e-commerce because of their intrinsic problems. This sector has been slowly wedged by the demonetization as well as the nationwide disruptions by realty law RERA and the goods & services tax (GST).
However, he stated, “It’s just a matter of time when we can see significant inflows of capital in Proptech. In the next five years, we can expect a large sum of capital being infused in Proptech companies.” He projected the searching and shortlisting process of renting and buying the properties to shift into digital platforms at the quickest.
“People will still visit one or two shortlisted properties before eventually deciding to buy,” Agarwala revealed. While discussing housing prices, he concurred that the value drop would not be seen everywhere. However, the developers who have stressed balance sheets may clear their inventories by giving discounts or decreasing the rates. The builders with substantial cash reserves and sturdy balance sheets would anyways not reduce the price.
Quoting a survey report by Housing.com, he stated about the delays in purchasing the properties. A large portion of the potential purchasers has put off their arrangement to purchase the properties by 0-12 months, while 19% of review respondents have postponed this task permanently.
Elara Technologies, holding the real estate firms – Makaan.com, Housing.com, and PropTiger, has raised $175 million recently. NoBroker.com, and Square Yards, amongst other players, have raised more than$150 million and $75 million, respectively.
Tanuj Shori, the CEO of Square Yards, revealed that the fast adoption of digital tools like a virtual walkthrough and payment gateways helped his company sell 3,000 properties during this lockdown period. According to him, the COVID19 pandemic has further fast-tracked the speed of digital adoption in the real estate sector.
Amit Agarwal, the co-founder of NoBroker, said that his website had witnessed the transaction of over 2,000 properties in this pandemic period. Every process of buying, including shortlisting, identifying, and walk-throughs of site or building, is now shifted to online.