The Founder and CEO at Square Yards, Tanuj Shori, has stated that history always has vital lessons for the real estate industry. He highlighted how the 2008 US financial crisis was spurred by pricing crashes in the housing category. The core issue was the information asymmetry in realty markets according to him, leading to homebuyers not being serious about mortgage-linked risks and lenders not having a proper understanding of their borrowers’ financial circumstances. Tanuj Shori feels that one of the biggest reasons behind real estate facing hurdles is due to the lack of suitably reliable capabilities in terms of data intelligence.
Information asymmetry, as pointed out by him, is something that limits liquidity in the market, leads to below-par selection of real estate and has other accompanying issues. Bargaining powers also come down for both home owners and buyers, putting them at a clear disadvantage while negotiating on property valuations, prices and rentals alike. Indian real estate has always seen the lack of authentic information linked to earlier market transactions and price points from a historical perspective. The absence of a consolidated data source has led to various problems for the real estate sector including limited transparency on pricing as well.
Information asymmetry is there at almost every transactional stage in the real estate market. While looking for a new apartment, there are high chances of the final property price or rental amount far surpassing the intrinsic or actual/deserving value for the same. Capital markets offer vast information to investors and all shareholders of companies regarding prices, peak prices, shares sold and so on. This data is then leveraged for technically analyzing stocks, studying earlier pricing patterns and forecasting future trends as well. Capital market authorities and regulators also mandate stringent laws against insider trading and other access-related misuse of data.
If something similar was available in the real estate space, i.e. mapping the entire volume and depth of data linked to pricing and earlier transactions, it would be a game-changer for sure. That is what Square Yards has targeted as its next mission. The CBO, Asset Management and Data Intelligence, Square Yards, Anand Moorthy, stated that reliable data-based intelligence that is easily accessible to everyone for swift reference and price bands to refer while negotiating rentals/sale transactions is required in the industry. He added that Square Yards has launched its unique industry-wide initiative for enabling access to reliable data linked to projects by builders and price points in select localities and cities. The broader data segmentation categories are registered sales figures, transaction data linked to the same, registered leases and registered mortgages. All data is available exactly in concurrence with actual Government Registration Records, lowering error/inconsistency/bias risks.
The company is expecting to enable huge benefits for all stakeholders throughout the real estate ecosystem and industry. With real-time data stacks, buyers may readily access earlier deals in their chosen localities and projects before going to brokers. Renters may access all earlier lease deeds of societies or localities for understanding rental charges and trends. Owners can stay in the loop about lease and sale transactions in order to properly value their properties. Data intelligence may eventually revolutionize the functioning of the industry, lowering transaction costs and fostering higher transparency and trust throughout the entire system. Square Yards is also widening its overall reach and access in 11 Indian cities and compiling all transactions that took place in the last five years. It is also expanding its presence to cover other cities like Kolkata, Ahmedabad and Chennai. It is also creating an extensive Digital Title Search option in collaboration with leading banking partners where people will soon be able to access earlier transfer and ownership information from the initial allotment stage to the current status.
Square Yards is also planning to launch an e-valuation tool which will predict property market values through deploying algorithmic analysis of listing prices, recent selling prices, parameters of demand and supply and macroeconomic and locational factors to come up with holistic figures. Data-driven services may help lower property purchase timelines along with making mortgage lending simpler. IT will offer support to banks, valuators, legal firms, financiers, architects, property advisors and brokers alike.
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Published Date: March 28, 2022
