The PropTech industry in India has attracted over USD 551 million in 2020, surpassing investments of USD 549 million in 2019, a recent report by Housing.com shows. Even though meek, growth in this comparatively new segment in India gains significance in the aftermath of the Coronavirus pandemic that has impacted growth for almost all businesses.
The report titled ‘PropTech: The Future of Real Estate in India’, by the Elara Group-owned real estate advisory portal, shows that investments in the segment in 2020 were at their peak since tech-based start-up companies began entering the real estate segment in India, in the 2000s. The report attributes the growth in the segment to a fast-growing middle class, rapid urbanisation, adoption of technology, an increasing internet user base of over 500 million, a young demographic base and a gradually consolidating real estate industry. So far, USD 2.5 billion has been invested in India’s PropTech industry across 225 deals, as on date.
Reasons for PropTech’s growth in India
“During the lockdown and the subsequent phased opening of the economy, most buyers concluded their property purchases using virtual mediums. This was possible, because since 2010, enterprises have already been investing heavily in the Proptech segment, to enable buyers to conclude property purchases with lesser effort than applied traditionally,” said Dhruv Agarwala, group CEO, Housing.com, Makaan.com and PropTiger.com.
“If these platforms were only popular for finding and finalising properties in the pre-pandemic era, the pandemic has changed much of that. It is also pertinent to mention here that housing markets in India would have taken an even more severe hit, because of the virus outbreak and its effects, had the PropTech industry not been gradually growing in the country,” he added.
Also read our in-depth article on Coronavirus impact on real estate.
PropTech market potential in India
While pointing out that growth of the industry in the Asian region was yet to reach a level seen in their western counterparts, the report pointed out that online business platforms that have been on the radar of investors since 2009, had evolved, from being mere mediums for digital classifieds to offering full-stack solutions towards discovery, advisory and transactional support.
The segment is likely to see a tremendous boost in the near future, amid increasing use of technologies such as virtual reality, drones, big data and artificial intelligence in home purchases. This is expressed through the fact that real estate in the country is slated to become a USD 1-trillion market by 2030.
According to the report, the property brokerage business in India, which is estimated to be a USD 1.4-billion industry, continues to rely heavily on offline mediums for deal closures. Even though the actual transactions culminate offline, over 50% of the real estate buying decisions take place through online searches. With the growing internet user base that is expected to increase to one billion by 2025, the opportunity for players in this segment is colossal, it adds.
The investment inflow in real estate is growing at a compounded annual growth rate of 10%, of which PropTech has been a blue-chip segment since 2010, growing at a robust CAGR of 57%.
An alumna of the Indian Institute of Mass Communication, Dhenkanal, Sunita Mishra brings over 16 years of expertise to the fields of legal matters, financial insights, and property market trends. Recognised for her ability to elucidate complex topics, her articles serve as a go-to resource for home buyers navigating intricate subjects. Through her extensive career, she has been associated with esteemed organisations like the Financial Express, Hindustan Times, Network18, All India Radio, and Business Standard.
In addition to her professional accomplishments, Sunita holds an MA degree in Sanskrit, with a specialisation in Indian Philosophy, from Delhi University. Outside of her work schedule, she likes to unwind by practising Yoga, and pursues her passion for travel.
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