Just as the internet made the middleman irrelevant in the travel, hospitality and retail industry, it is now doing the same in the real estate sector.
“We wanted something better, so we built it ourselves” is etched on the walls of the Powai office of Housing.com—a Mumbai based startup that was co-founded in 2012 by 12 graduates from IIT-Bombay. It could well be the twitter version of their entrepreneurial story.
Housing.com is the first map-based real estate portal of Bharat that helps consumers search for homes. Although it started as a rental search platform providing virtual tours of properties, Housing.com is slowly expanding its footprint in the entire real estate ecosystem by offering listings for PG and hostels, new projects, land and plot projects. It has now launched a customised home loan service and an online rental agreement facility, thereby covering almost the entire value chain of services in this sector.
The idea for the housing portal came up in February 2012, when Advitiya Sharma and his 11 friends set out to look for a rental accommodation, after passing from IIT-Bombay. “We spent more than a month in Mumbai looking for an accommodation. But the fake listings and unreasonable conditions for renting out a flat to bachelors made that experience a nightmare. That is when we decided to do something about it,” says Sharma. Like most youngsters starting up, the founders had a hard time convincing their parents that creating Housing.com was a better idea than working in well-paid corporate jobs. Today, says Advitiya, the mindset has changed and their parents have become their biggest supporters. He believes that the fledging startup ecosystem in India will get a big boost if entrepreneurship is taught as part of school curriculum and children form a very young age are encouraged to identify and solve problems around them.
Real estate industry is probably the least transparent and worst regulated sector in Bharat and has come to symbolise all that is wrong with our political economy. Builders, property agents, brokers and landlords have been able to collude against the consumer primarily because of the lack of reliable information about properties in the public. The consistent hardship faced by consumers has resulted in a drastic slowdown for the entire industry. For example last year, in the residential market in top 6 cities of Bharat, the sales volume fell by 17 per cent and new launches dropped by 28 per cent.
Housing.com fixes this problem of information arbitrage against the consumer and empowers them by making data verification of properties the core of its business. Almost one-third of its employees works in data collection team that physically visits every property which get listed on the website. The team takes high resolution pictures and notes more than 100 data points including metrics like number of balconies, gas pipeline, and proximity to schools, parks, hospitals and shopping malls.
This rich data set allows it to catalogue properties along a variety of indices like child friendliness, housing lifestyle ratings, women friendliness, old age friendliness or price heat map. The company has the vision of becoming a one-stop shop for all the housing needs of its users. Accordingly, it plans to add interior designing as a feature and provide movers and packers facility to make shifting hassle-free.
2014- A Watershed Year for Online Housing Portals
In December last year, Japan’s richest man and CEO of SoftBank, Masayoshi Son, invested $100 million (more than Rs. 600 crore) in Housing.com. It capped an extraordinary year for the online real estate segment in the middle of a depressed Bharatiya real estate market that saw a total investment of $232 million in housing portals—an eleven fold increase from 2013. This unprecedented interest from the investor community was due to the coming together of at least 3 megatrends in the country- increasing internet penetration, change in consumer behaviour to not just browse properties online but also buy them and the increasing hassle of having to deal with an offline broker.
MagicBricks and 99Acres were traditional players in the online real estate segment but they were merely portals that allowed brokers to list their properties. Over the last few years, a new breed of housing portals as emerged to challenge their hegemony by replacing the local, scooter-driving broker as the market-maker and directly connecting the buyer and seller of properties. Housing.com, Proptiger, Commonfloor and Indiahomeslead the pack of venture capital based startups that are disrupting the real estate market in Bharat. It is clear that just as the internet made the middleman irrelevant in the travel, hospitality and retail industry, it is now doing the same in the real estate sector and the real estate will now have to adopt to a online-first approach that most buyers are now resorting too.
Apart from substantial cost
savings—traditional brokers charge commissions up to 2 per cent from both parties. These online portals offer customers the luxury of evaluating and booking their choice of property
sitting in the comfort of their homes. However, Housing.com stands out from its peers for its pioneering data collection methods and its (almost) obsessive use of technology to improve user experience on the website.
Housing.com has a subscription based revenue model where landlords, agents, developers, land owners pay for display on the site while remaining free to the end user. It is using the latest round of funding from SoftBank to map over 40 million homes across 300 cities in Bharat in the next two years and also expand internationally.
However, their focus continues to remain on creating new features based on technology to give Housing.com a competitive advantage over rivals and become a trusted source of information for consumers. In November last year Housing.com launched “Slice View”, the world’s first interactive home booking platform, that allows users to go through each floor of a building project. The company claims to have sold online 115 apartments worth Rs 60 crore for Tata Value Homes in just five days using Slice View. They have also partnered with Google’s voice assistant, Google Now to provide real-time property updates based on user location. Finally it is planning to partner with State Governments to sell their flats online.
Bharat’s real estate market is predicted to reach $180 billion by 2020 with an additional demand of 2.8 million units in just the top eight Bharatiya cities. However builders and developers have been unable to sell stock through conventional channels and they are increasingly looking at online portals to fill in the gap. According to some estimates, there are over 4 million online searches per month for properties with 16,000 to 20,000 properties sold every month through portals. And as a larger chunk of the housing market shifts online, Housing.com has positioned itself as the leader in the use of technology to help people make buying decisions.
Apurv Kumar Mishra (The writer is Young India Fellow
2013-14 at Ashoka University)