Foreign investors are interested to add Indian property portals in shopping cart
India is one of the fastest growing countries and its internet legion is bigger than the Indonesia’s 250 million population. In India internet users are growing with the annual rate of 20 per cent and all they have lured to property portal investment in the form of likes Japanese telecoms-to-media firm SoftBank Corp. Before few days Google Inc’s Google Capital unit invested a huge amount of money in the online site known as; Commonfloor.com. In present investors are looking for long terms capital for start-ups such as; Housing.com and Proptiger have also make the Indian real estate market more attractive for foreign investors in comparison of China, where local money dominates, stated by one of the investor, who was speaking on condition of anonymity.
Why online portals real estate portals are better than traditional real estate market?
In real estate market traditional home buyers work with local brokers, but in a whole country property market already estimated by worth $121 billion in 2013, according to KPMG. There are some property portals who are offering online ability to compare house prices of thousands of kilometers property away without leaving home. According to, Indian businessman Navin Bhartia, “Internet habits make him a dream customer for billionaire foreign media moguls like Rupert Murdoch”. PM Modi has paved the way to attract more and more foreign investment in construction and land based acquisition deals. PM has already sought to make an impact on India’s still largely unregulated property market by making the listing of real estate investment trusts easier.
Recent investments in online real estate portals:
A person of 45-year-old from Kolkata love to buy home online, sometimes even without visiting them, in last four years he has bought five properties worth of 40 million rupees ($641,900) from online property portal Proptiger.com, which is owned by Murdoch’s News Corp. Foreign investors such as; Murdoch have already invest more than $200 million into online property portals, which help people like Bhartia to buy homes. Spurring the interest is PM Modi’s vow to provide a house to every Indian family by 2022 under “Housing for ALL” schemes as the country’s growing army of Internet users embraces e-commerce. As per Mukul Singhal, a principal at India-China fund SAIF Partners, “Growth and scale of businesses like Flipkart are a proxy that consumers in India are comfortable doing transactions on the Internet”. Recently, SAIF Partners have invested $10 million in Proptiger and News Corp has invested a $30 million stake.
Disadvantages of traditional real estate market:
Indian real estate market is too messy and there are a lot of information arbitrage and asymmetry whereas; there is no credible pricing data and analysis is available, which makes it clear that why there is more need of technology-based solutions, as per the statement of SAIF Partners principal Singhal. As per one of the customer, “A single broker has there some limited contacts and he could have personal reasons for pushing a property, whereas; in online mode you get very good and holistic views about each and every property”.
Future growth of online real estate portals:
As per recent reports of Venture Intelligence, It’s clear that investment in property portals jumped five-fold to $193 million last year. This research firm also expects India’s housing market to grow to $158 billion by 2020. Some websites, who charge a huge amount of money as subscription fees or a percentage of the sales price, are still accountable for home sales in India. For investors like News Corp, though, the Internet logic is inescapable. Apart from boosting the housing sales which have flagged as India’s growing economy in recent years, real estate developers are tying up with portals to push transactions online with special promotions.
According to Raju Narisetti, VP of of strategy at News Corp, “India’s digital demographic is a key factor in looking at this space”. On eof the real estate developer Tata Housing is the part of $100 billion Tata group, in November 2014 they have sold homes worth more than 500 million rupees through a partnership with Housing.com, now days even buyers could see the 3D models of the units and token payment as well as whole amount and rest of the process can be done through online mode.
