Buying a house online could soon be commonplace with major players waking up to the potential of the online space, which was hitherto limited to checking designs and prices of properties.
While it may still be some years before online property buying becomes as common as purchasing clothes, electronics or books by the click of a mouse, real estate companies say there has been an uptick in web transactions of late.
Betting big on this medium is prominent real estate developer Tata Housing, which expects online to account for 30 per cent of its overall sales in the next three-to-five years.
"During the past three months, Tata Housing and Tata Value Homes (a subsidiary which is into affordable homes) have sold over 400,000 sq ft through 450 apartments online with sales value of over Rs 350 crore," says A Harikesh, senior vice-president (marketing and sales) at Tata Housing.
The company, however, did not divulge its total sales or revenue.
According to Harikesh, compared with the offline mode, the online medium gives better target reach at lower cost. "This is emerging as an exciting option to target non-resident Indians (NRIs) and high net worth individuals (HNIs)."
The increasing use of the Internet for property research is also a crucial factor. According to Google, every year, as many as eight million people search for real estate information online in India.
The Internet greatly influences consumer behaviour because seven out of 10 buyers know the exact brand and model they want to buy with the help of online research, says another real estate executive.
According to information provided by Google India, the volume of real estate-related queries is growing at the rate of 35 per cent year-on-year, out of which about half the queries are made with intent of a purchase. Notably, 30 per cent of these searches come from mobile phones. While 18 per cent of the queries are for rent, eight per cent each for real estate builders and brokers.
Mumbai was the most-searched city for real estate-related information in 2013, followed by Bangalore, Pune, Chennai, Delhi and Kolkata.
Experts tracking the sector say that property portals are also catching on with consumers. However, at the moment, most people use the portals for renting out properties as there is a direct connect between the owner and the consumer without any middlemen.
However, the share of online property business in the overall realty market in the country is still minuscule. Experts expect it to grow to 15-20 per cent in the next couple of years.
Among the leading property portals are Magicbricks.com, 99acres.com and makaan.com. In the past few years, there have been many start-ups in the real estate space such as Commonfloor.com, Housing.co, Grabhouse and many others. The portals are mainly driven by revenues through advertisements, commissions from developers or brokers and funding from private equity funds.
These portals are increasingly becoming a tool for research on buying, selling and leasing residential or commercial properties in many parts of the country. According to industry estimates, people in the age group of 30-45 years do most searches and the property price varies from Rs 50 lakh to Rs 1 crore.
Says Sanjay Dutt, executive managing director-South Asia at Cushman and Wakefield: "Digital media is increasingly being used for fact-finding and initial level of research. But since buying property is a high-value decision for many, it will take time, maybe another five years, before we see a huge number of transactions happen through the online medium."