Real estate in India stands as a distinctive asset class, boasting a lineage that mirrors the ebb and flow of economic vitality. The industry has experienced recurring cycles of innovation and expansion, as well as occasional challenges. While many countries are currently grappling with economic downturns and their resultant impact on the real estate sector, India is defying this trend by undergoing an exceptional boom characterized by high growth. What is interesting is the digital makeover that has revamped the sector, and it isn’t just another tech trend but a full-blown revolution led by the integration and amalgamation of innovative technology solutions in real estate.
Imagine homes that learn from their occupants, transactions conducted at the speed of a click, and a transformed real estate landscape from a decade ago. It’s a revolution driven not by towering skyscrapers or sprawling suburban developments but by lines of code, digital platforms, and a new breed of disruptors known as PropTech start-ups. These entrepreneurial trailblazers disguised as start-ups are rewriting the playbook of the real estate industry, ushering it into the 21st century with a vigor that’s impossible to ignore.
Today, PropTech start-ups in India are the game-changers revolutionizing day-to-day transactions in the real estate sector. The PropTech start-ups started emerging in the mid-2000s when a handful of real estate technology companies made their foray. Over the past few years, the PropTech market has seen steep growth, and the uptrend will continue to unravel in the times to come.
PropTech has already significantly penetrated multiple facets of the real estate industry, encompassing everything from property search and exploration to transactions, urban planning and design, construction methodologies, as well as rental and property management.
Innovations and disruptions in the real estate sector and the construction industry are also expected to play a critical role in India’s ambitious target of reaching a USD 5 trillion economy. The residential and commercial sectors constitute technological unification through sustainability, finance, sales, and design and construction. With the widespread reach of the internet and the rapid absorption of digitalization in emerging tier II and tier III cities, PropTech and its associated sub-sectors are well poised to harness the latent real estate opportunities in both rural and urban areas, fostering comprehensive localised development.
Several noteworthy emerging trends include the swift expansion of co-working and co-living spaces, the growing significance of social media, advancements in blockchain, machine learning, and artificial intelligence, as well as transformative changes in construction techniques and materials.
Enhancing construction efficiency
Historically, the construction industry in India has been slow to embrace emerging technologies and more inclined towards conventional techniques. Over the last decade, a perceptible shift is under way as an increasing number of companies recognize the substantial impact these technologies can make on their financial performance.
Technologies such as artificial intelligence have evolved into an indispensable asset within the construction industry, expediting intricate tasks, thereby enhancing efficiency. Employing artificial neural networks, construction professionals can anticipate costs by factoring in project dimensions, contract specifics, and material considerations, thus averting budget overruns. This enables construction firms to propose competitive bids while safeguarding their profit margins. Additionally, the utilisation of building information modelling solutions empowers contractors to craft 3D models, providing invaluable insights for competent planning, construction, design, and maintenance of structures.
Further, the construction industry has the highest rate of workplace fatalities, which are now being monitored and resolved through solutions being created by PropTech companies. Companies now use drones and cameras, with apps to detect incognizant workers’ behaviour that could lead to accidents, such as lack of protective equipment and rectify these actions in real time.
Need for propelling PropTech startups
Technology has played a pivotal role in the swift resurgence of India’s real estate sector from the tumultuous COVID-induced lockdown. Despite initial reluctance to embrace these evolving changes, the Indian real estate industry has since embraced and integrated these innovations to its advantage. Consequently, this has brought about favourable outcomes for developers, investors, buyers, and tenants.
PropTech has brought about a significant evolution in the operational landscape of the real estate sector, positively impacting various stakeholders such as landlords, tenants, investors, and brokers. These stakeholders are now harnessing the advantages of technology in multiple ways.
Today, PropTech entrepreneurs offer diverse array of solutions for the real estate market. These encompass unique property search tools, inventive purchasing options, novel rental practices, alternative selling methods, and innovative concepts for both agents and landlords. Collectively, these offerings provide customers with convenient access to property reviews, seasonal visuals, infrastructure assessments, and a host of other advantages.
In conclusion, India’s expansive real estate market has spurred many companies to expand their service offerings and operational reach, with the aim of catering to the evolving needs of the population, spanning from co-living to coworking solutions. Amid this dynamic market, PropTech start-ups are further accelerating growth as well as enabling the Indian real estate industry to take a quantum leap over the coming years. According to industry estimates, the growth of PropTech start-ups is likely to continue and the annual year-on-year growth of new companies is anticipated in the range of 22% – 25% as the real estate sector expands to touch USD 1 Tn by 2030.
Lastly, the envisioned economic growth, bolstered by government initiatives aimed at infrastructure development, the vision of a digital India, smart cities, and Atmanirbhar Bharat, is poised to act as catalysts for the real estate sector. This, in turn, is expected to foster greater receptiveness and utilization of technology. While it may represent a gradual and ongoing evolution, the immediate horizon suggests a swift surge in action, rapid technology adoption, and a wider embrace to propel the real estate sector to new heights.
The writer is Chairman & CEO – India, South-East Asia, Middle East & Africa, CBRE