This Is What Drives Home Sales Online

Internet has emerged as a medium to shop online in India, but this has been limited to buying fashion, groceries, and other services. The online shopping, which has been confined to products and services, is now seeing an emergence of a new category, real estate. Both e-commerce players as well as real estate developers in India are now testing the theory of online home sales, to engage consumers in buying homes online.

Though the Indian consumers are not yet ready to spend millions to buy a home online, the developers and e-commerce companies are launching special festivals, to offer exclusive deals and discounts, to lure potential home buyers.

A real estate advisory, PropTiger.com, aims to promote online home buying by equipping the website with special features that make choosing a property a convenient process. The features include City Master Plan, 4D View, 3D view, PropView, Portfolio tracker, Livability and Safety Score, and EMI calculator. The advisor recently tied up with the real estate developer, Godrej Properties, to launch The Big Happiness Festival from 7 to 14 September.

Post the success of The Big Happiness Festival, PropTiger.com is now running another home buying festival, YOHO (Your Home), where it lists projects in Delhi-NCR. The sale, which will run from 17 to 23 September, will enable the home buyers to experience properties in 4D, doing away with the hassle of multiple site visits.

In fact, one of India's top real estate developers, DLF tied-up with Snapdeal to sell 50 apartments across eight residential project in cities such as Chandigarh, Panchkula, Lucknow, Bengaluru, Chennai, Kochi, and Kolkata. These apartments are priced between Rs 34 lakh to Rs 3 crore.

The development by DLF came barely a month after Godrej Properties did the same to offer online booking of their apartments via Snapdeal. Tata Housing also launched National Home Buying Day, an online initiative, which was oversubscribed by four times. Tata Housing has sold around 1,500 homes online.

These initiatives come as a welcome change in a market where unsold inventory is an oft-repeated phrase.

Other developers joining the online bandwagon include Purvankara, Vatika Developers, Umang, Ashiana Properties, Kolte Patil and Mantri Realty. This is apart from the e-auction of homes that are a phenomenon of the secondary sales market. One of the well-known proposed e-auction is of 152 apartments in Commonwealth Village, by Delhi Development Authority (DDA). The trust factor of government auctioned apartments can also act as a trust factor for big brands to sell homes online.

What is the online pull? Discounts!

Even if convenience is what gave birth to e-commerce globally. In India, the driving factor was discounts offered by e-retailers. Retail, in the country, is driven by competitive pricing, and offers and discounts, and same will, going further, hold true for real estate too.

PropTiger.com, through two of its festivals, offered discounts as high as Rs 24.5 lakh, coupled with exclusive project offers such as free open car parking, free club membership, and flexible payment plans. Moreover, the home buyers could book homes for a sum of Rs 20,000. These offers proved to be successful for developers as a large number of home buyers booked homes online.

On the other hand, when DLF launched its online home sale, the developer promised to give one per cent discount to homes purchased online, in hope of pulling buyers in the world's most price sensitive market.

From the developer's angle, selling online would be cheaper, as the expenditure on advertising will be less. And, the reach will be higher as online sales can target a wider audience across the country, not restricting it to a city or a circle.

This form of sales will be a hit among potential buyers who buy property for investment.

No middlemen

In addition to developer discounts, a few online sites also boast of zero brokerages. This enables the potential buyer to reach out tot the developer directly, cutting down the significance and high brokerage costs of real estate brokers and agents. Apart from reduced commission structure, lack of real estate agents, online sales also reduce the possibilities of a fraud and duping, significantly.

Fewer go-sees

The biggest advantage of online sales is viewing the property from the comforts of your home, eliminating the hassle of traveling far and wide across the city, visiting sites. Home searching, which done the conventional way, can take months, but buying home online can cut down the time taken to buy a home.

A number of real estate companies are offering 3D-style visualisation of homes online, allowing home buyers to cut down traveling and hence the time taken to search for a home. Interestingly, PropTiger.com, has gone a notch higher and introduced a 4D view of an apartment. So, a potential buyer can view how the apartment look at different times of the day, how the amenities, offered, would look and also the availability or non-availability of a particular apartment.

A buyer can also filter properties by the use of technology and choose to visit fewer apartments or homes, if need be, before they make a decision.

Customer inputs to developers

With the growing number of consumers going online, experiments are underway including made-to-order homes. In this method, the potential home buyer, who has been largely ignored, gets a say in the kind of home he/she is looking for.

Online sales have an advantage of bringing the developers and home buyers on one platform, where customer inputs to make homes as per specifications has become a reality. This holds importance for under-construction projects in India.

Still a long way to go

According to a report by AT Kearney, 36 million Indians now shop online. The report says that e-commerce which will grow at a rate of 21 per cent for the next five years, will also have real estate sales contributing to this growth. Though this growth will be majorly from metros, Tier-I, and some Tier-II cities and it is yet to hit many smaller towns. The growth will be further triggered if all get access to Internet. The transformation to go digital will bring in many socio-cultural changes in buying patterns, which means that even buying home online will be attributed to the convenience of shopping from home.

Home sales online are here to stay, making the industry more organised and changing the way India buys online.

(Katya Naidu has been working as a business journalist for the last nine years, and has covered beats across banking, pharma, healthcare, telecom, technology, power, infrastructure, shipping and commodities)