In the last decade, the real estate industry has witnessed a host of technologies entering its DNA. Several Proptech startups mushroomed in the sphere of search & discovery platforms, real estate analytics, usage of immersive virtual technologies such as AR & VR and others. The industry has also witnessed the prominence of digital transactions in real estate in the last four years, which was unheard of earlier. Post demonetization drive, the government of India is promoting digital transactions to reduce the significant flow of physical currency for cashless economy.
In contrast with global Proptech turf, in India, the usage of technologies in real estate is quite at its nascent stage. Worldwide over the last three years Proptech startups able to raise funds in the tune of USD 12.4 billion, however, Indian Proptech startups able to attract around USD 1.64 billion from various private equity funds, HNI, institutional investors and others. Indian Proptech industry with current market dynamics is in its early stage, but it is set to grow and make inroads into the real estate sector.
Coronavirus induced crisis and lockdown has changed the transaction type in the real estate industry. Earlier it was physical presence was required to complete any real estate transaction but now required anymore. Various Proptech startups like Square Yards has changed the way real estate business was conducted. Square Yards through its innovative digital transaction platform have done 500 plus digital transaction in the month of April. Previously, no one ever imagined this magnitude of business transactions would be possible through online platforms. Through these digital platforms, all the document verification, digital signature, home loan approval, and property selection are conducted digitally.
According to a survey by Local Circles, about 2/3rd of the real estate transactions registered cash element of anywhere between 10 % – 50%. Amid coronavirus crisis and lockdown this cash component transaction in the real estate industry has almost come to nil. Thanks to various digital transaction platforms which helped realty investors and homebuyers in purchasing properties without any hassles.
Advantages of Digital Transaction in Real Estate
The real estate industry has always been plagued with trust deficiency, lack of transparency, and record management issues. With the advent of technological innovation & advancement like digital transactions, real estate has brought transparency and trust among all real estate stakeholders.
Efficient Transactions: Digital signature and online money transfers have made it possible to conduct real estate business from any place and anytime at buyer or investor comfort. The digital transaction platform has brought efficiency while doing online transactions.
Increased Transparency: These digital transactions are devised with various security levels so that there should not be any fraudulent activity take place. Digital transaction platform helped realty investors and home buyers to keep digital track of their funds used for buying properties. It is easy to view transaction history and access records for review and financial audits.
Reduced Transaction Time: Earlier for completion of a real estate transaction takes place around 30-45 days, as it involves lots of paperwork and several rounds of government office visits. With the advent of digital transaction platform, all these processes are curtailed to a matter of seconds. It has reduced the abundance of time wastage and completion of a real estate transaction time.
Reduced Number of Intermediaries: Digital transaction has reduced a significant number of intermediaries involved earlier. It has saved time and money of the investor and home buyer, while it was not possible before the development of the digital transaction platform.