Despite the pandemic, $2.4 billion has been invested in India's PropTech industry across 225 deals.
If you don’t know what prop tech is, don’t worry. You’re not alone. A fairly new term born during the digital boom, prop tech simply refers to technology used in the real estate market. With acceleration of technology, it is no surprise that the real estate industry too has been going through metamorphosis brought on by significant disruption brought in by new technology and various digital offerings which have changed the way people live and work. And as the pandemic upends sectors forcing them to go all out digital it’s only natural that the real estate sector too should turn to digital technology to help it stay afloat in pandemic storm.
According to a report by Deloitte called, the commercial real estate (CRE) industry, which largely operates at the intersection of the physical real estate space and its users, appears on the cusp of a digital transformation. Tenants and end-users are largely looking forward to doing more with the physical space. They are increasingly looking at innovative and personalised technology-enabled experiences.
Already property developers around the world are turning to technology to arrange video and 3D viewings, using special HEPA filters with UV lights, touchless entry and automated sanitization measures to ensure tenant safety in buildings or using Automated Valuation Models.
In fact, according to a recent report, the PropTech industry in India attracted investment worth $551 million despite the pandemic.
The report titled PropTech: The Future of Real Estate in India, by the Elara Group also stated that so far, $2.4 billion have been invested in India's PropTech industry across 225 deals; the share of investments in the commercial segment has increased to 62per cent in 2020 compared to 25per cent in 2015.
The report attributes the growth in the segment to the fast-growing middle class, rapid urbanisation, adoption of technology, increasing internet user base of over 500 million, a young demographic base and a gradually consolidating real estate canvas.
The Indian real estate sector is slated to become a $1-trillion market by 2030. And the growing use of technologies such as virtual reality, drones, big data, artificial intelligence in home purchases means that the prop tech segment is likely to witness growth in the near future amid.
The report also points out that while a major part of the brokerage business is still conducted through the offline mode over 50 percent of the real estate buying decisions take place through online searches.
In a pan-India survey, 60 per cent of participants say they are willing to use digital platforms for exploring options to buy or rent homes, 37 percent of respondents said they were willing to close the deal completely online after one site visit. As many as 47 percent of respondents say they will be open to doing so after multiple site visits. As against the national average, nearly 50 percent respondents in Mumbai and Chennai are open to buying/renting entirely online or just after one site visit as compared.
While the respondents in the 25-35 age group are more open to closing the purchases online, respondents aged above 45 years are interested in using digital platforms to search for options and would be willing to close the deal online only after multiple site visits.
As technology develops further and with the penetration of data tech and 5G, it is a fair assumption that prop techas a segment will only continue to propel after the pandemic.