WILL WE START BUYING HOMES ONLINE?
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Considering the increased internet penetration in the country, now is the right time to evaluate if Indians will ever start buying their homes online
There is an increase in the use of digital platforms by end-users as well as investors, to identify promising localities and projects within the city. Most developers now, use e-marketing to some extent or the other. However, property buyers in India, still have to inspect properties and the related documents first-hand, before being able to make a purchase decision. None of the transactions take place through online portals as most of them continue to remain classified search portals as opposed to full-fledged e-commerce portals.Advitiya Sharma, partner of Housing.com, says, “The Indian real estate sector focuses on converting the offline house hunting process into an online convenience. No steps have been taken to develop the online experience into a complete, self-sufficient process. Numerous websites house lists of documents necessary to procure a home loan or blog posts that outline the method. However, we haven't been able to create a platform that takes the user through the entire process of online transactions in buying a property . There is a huge potential in addressing this gap and consider addressing this tangent of the real estate market.“
However, there are several barriers, pertaining to enabling buying a home online. Sanjay Dutt, executive managing director South Asia, Cushman & Wakefield, says, “Any real estate transaction involves a built product, which is usually not a standardised commodity . Additionally, there are multiple parties including the developer (seller), buyer, lender (bankNBFC) and government authority (registrar), involved in the entire transaction process. The property portal intending to start online transactions with an aim to be a one-stop-shop, has to necessarily liaison with these parties, along with setting up the required back-end technology (for data dissemination) and secure payment.“
According to Ganesh Vasudevan, CEO, IndiaProperty .com, most land and ownership records of a property are not digi tised, which makes the offline leg almost inevitable. “The sector lacks transparency and hence, credibility of most builders and intermediaries is viewed with suspicion. The credibility aspect can be addressed by verifying information put up on the portal including legal aspects. The transparency is little difficult to address, as the offline leg of the purchase process is an important one, given the high involvement nature of the purchase.“
Dutt adds, “Although online transactions will be a boon to today's net-savvy consumers, it will be a tough task to adapt to the real estate sector, considering the necessity of viewing the property andor its location, etc., in person, besides the involvement of multiple parties, large amounts of documentation work (which is not paperless) and managing the complexity of the transaction, considering the opaque nature of this sector. Moreover, real estate purchases are dependent on a number of qualitative factors such as location, neighbourhood profiles, availability of social infrastructure, accessibility, etc., making the transaction complex as compared to simple online transactions such as flight ticket booking or electronic purchases.“
Most portals have introduced many features to eliminate the need to physically evaluate the property, including location, through features like 3D floor plans of individual apartments, last mile video maps of the project, locality liveability ratings, amenities and videos.They also provide complete online assistance to a customer in purchasing a property, including home loan assistance, legal and documentation assistance, among others. A user can easily evaluate the project, locality, financing options and intermediaries involved, in complete detail and also compare several projects to make an informed decision.
Om Ahuja, CEO residential services, JLL India, opines, “India is still a long way off from the day when properties can be sold and bought online in the manner seen in more developed countries. The high incidence of flawed or incomplete titles is a real and present fact of life. Despite the fact that this practice is being increasingly curbed by more stringent regulations, many people in India, still see property purchase as a means to get rid of undeclared funds.This is still a widespread practice in smaller towns and cities. In countries like the UK and Singapore, there are high levels of transparency and properties in the market are fully documented.“
Arvind Jain, managing director, Pride Group, agrees, “In more advanced countries, properties can be bought and sold like many other assets because all the necessary details are available to the buyers. This is one of the main reasons why the practice of 'flipping' properties is workable in those countries. In India, every property must be thoroughly titlesearched before it becomes marketable.Digitisation of land and property records is still in its infancy here and a large part of the market remains unorganised. In the resale market, issues like multiple owners, non-registration of properties and even lack of approvals and clearances by competent authorities, are still rampant. The authorities are working on removing these lacunae and perhaps, transacting properties online, will become a possibility in the coming decades. However, until that point, property sites and portals will not serve a greater purpose than giving an overview of some of the options available.“
However, as Kishor Pate, CMD, Amit Enterprises Housing Ltd, says, “Buying a home is still a very personal matter in India and it cannot be entirely de-personalised. Buyers as well as lending institutions, dealing with home loans, have to confirm various different aspects of the project and the individual units. As such, developers can market their properties online but actually selling them by such means, is not viable, as of now.“
Anil Pharande, chairman, Pharande Spaces, says, “India is nowhere near the time when real estate can be transacted solely online as the realty market is still too unorganised.“
Initiatives like a universal standard of property measurement (which is in the pipeline), can prove to be a move in the right direction to not just tackle the problem of low investor confidence by creating a level playing field for the way property is measured, valued and ultimately reported in financial statements but will also encourage people to make transactions online.
[FAST FACT] THE CREDIBILITY ASPECT CAN BE ADDRESSED BY VERIFYING INFORMATION PUT UP ON THE PORTAL INCLUDING LEGAL ASPECTS
QUICK BYTE BUYING A HOME IS STILL A VERY PERSONAL MATTER IN INDIA AND IT CANNOT BE ENTIRELY DE PERSONALISED.
BUYERS AS WELL AS LENDING INSTITUTIONS DEALING WITH HOME LOANS, HAVE TO CONFIRM DIFFERENT ASPECTS OF THE PROJECT AND THE INDIVIDUAL UNITS. AS SUCH, DEVELOPERS CAN MARKET THEIR PROPERTIES ONLINE BUT ACTUALLY SELLING THEM BY SUCH MEANS, IS NOT VIABLE AS OF NOW.
However, there are several barriers, pertaining to enabling buying a home online. Sanjay Dutt, executive managing director South Asia, Cushman & Wakefield, says, “Any real estate transaction involves a built product, which is usually not a standardised commodity . Additionally, there are multiple parties including the developer (seller), buyer, lender (bankNBFC) and government authority (registrar), involved in the entire transaction process. The property portal intending to start online transactions with an aim to be a one-stop-shop, has to necessarily liaison with these parties, along with setting up the required back-end technology (for data dissemination) and secure payment.“
According to Ganesh Vasudevan, CEO, IndiaProperty .com, most land and ownership records of a property are not digi tised, which makes the offline leg almost inevitable. “The sector lacks transparency and hence, credibility of most builders and intermediaries is viewed with suspicion. The credibility aspect can be addressed by verifying information put up on the portal including legal aspects. The transparency is little difficult to address, as the offline leg of the purchase process is an important one, given the high involvement nature of the purchase.“
Dutt adds, “Although online transactions will be a boon to today's net-savvy consumers, it will be a tough task to adapt to the real estate sector, considering the necessity of viewing the property andor its location, etc., in person, besides the involvement of multiple parties, large amounts of documentation work (which is not paperless) and managing the complexity of the transaction, considering the opaque nature of this sector. Moreover, real estate purchases are dependent on a number of qualitative factors such as location, neighbourhood profiles, availability of social infrastructure, accessibility, etc., making the transaction complex as compared to simple online transactions such as flight ticket booking or electronic purchases.“
Most portals have introduced many features to eliminate the need to physically evaluate the property, including location, through features like 3D floor plans of individual apartments, last mile video maps of the project, locality liveability ratings, amenities and videos.They also provide complete online assistance to a customer in purchasing a property, including home loan assistance, legal and documentation assistance, among others. A user can easily evaluate the project, locality, financing options and intermediaries involved, in complete detail and also compare several projects to make an informed decision.
Om Ahuja, CEO residential services, JLL India, opines, “India is still a long way off from the day when properties can be sold and bought online in the manner seen in more developed countries. The high incidence of flawed or incomplete titles is a real and present fact of life. Despite the fact that this practice is being increasingly curbed by more stringent regulations, many people in India, still see property purchase as a means to get rid of undeclared funds.This is still a widespread practice in smaller towns and cities. In countries like the UK and Singapore, there are high levels of transparency and properties in the market are fully documented.“
Arvind Jain, managing director, Pride Group, agrees, “In more advanced countries, properties can be bought and sold like many other assets because all the necessary details are available to the buyers. This is one of the main reasons why the practice of 'flipping' properties is workable in those countries. In India, every property must be thoroughly titlesearched before it becomes marketable.Digitisation of land and property records is still in its infancy here and a large part of the market remains unorganised. In the resale market, issues like multiple owners, non-registration of properties and even lack of approvals and clearances by competent authorities, are still rampant. The authorities are working on removing these lacunae and perhaps, transacting properties online, will become a possibility in the coming decades. However, until that point, property sites and portals will not serve a greater purpose than giving an overview of some of the options available.“
However, as Kishor Pate, CMD, Amit Enterprises Housing Ltd, says, “Buying a home is still a very personal matter in India and it cannot be entirely de-personalised. Buyers as well as lending institutions, dealing with home loans, have to confirm various different aspects of the project and the individual units. As such, developers can market their properties online but actually selling them by such means, is not viable, as of now.“
Anil Pharande, chairman, Pharande Spaces, says, “India is nowhere near the time when real estate can be transacted solely online as the realty market is still too unorganised.“
Initiatives like a universal standard of property measurement (which is in the pipeline), can prove to be a move in the right direction to not just tackle the problem of low investor confidence by creating a level playing field for the way property is measured, valued and ultimately reported in financial statements but will also encourage people to make transactions online.
[FAST FACT] THE CREDIBILITY ASPECT CAN BE ADDRESSED BY VERIFYING INFORMATION PUT UP ON THE PORTAL INCLUDING LEGAL ASPECTS
QUICK BYTE BUYING A HOME IS STILL A VERY PERSONAL MATTER IN INDIA AND IT CANNOT BE ENTIRELY DE PERSONALISED.
BUYERS AS WELL AS LENDING INSTITUTIONS DEALING WITH HOME LOANS, HAVE TO CONFIRM DIFFERENT ASPECTS OF THE PROJECT AND THE INDIVIDUAL UNITS. AS SUCH, DEVELOPERS CAN MARKET THEIR PROPERTIES ONLINE BUT ACTUALLY SELLING THEM BY SUCH MEANS, IS NOT VIABLE AS OF NOW.
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