MUMBAI: Until recently, real estate portals were used by home buyers to research on floor plans and price of apartments but builders are taking this process to the next level: you can now buy a home online.
With growing internet penetration, builders have realised the potential of the online space in selling homes and some have even tasted success. Mumbai-based Lodha group has generated over 100 bookings through its online portal for its new township project Palava in Navi Mumbai.
“We see the online space offering the potential for us to connect with consumers in new ways across the engagement cycle, from first contact to providing basic information all the way to bookings and sales,” says aspokesman of the Lodha Group.
Earlier this year, Tata Value Homes, a 100% subsidiary of Tata Housing, sold over 200 apartments across five of its projects in a fourday online campaign. It had earlier sold 50 homes online during the Google Online Shopping Festival.
“About 70-80% of the home search happens online which prompted us to take the next step and offer the option of buying a home online,” says Rajeeb Dash, head marketing services at Tata Housing.
“The exercise was targeted at not only the primary local market but also the NRI base which is more open to such transactions,” he adds.
Tata Housing has tied up with banks like IDBI to facilitate sales of homes online. A buyer can narrow down the apartment he wants to buy, pay an online booking amount of Rs 50,000 through credit or debit card and the house is allotted to him. The buyer can then complete further payments and formalities online or offline.
However, there’s a catch: buyers need to think twice before they make such a purchase as the online booking amount is not refundable.
“Buying a home is a high involvement decision so it will have to be a mix of online and offline model. That said, there is a small segment of buyers such as investors and NRI buyers who could complete the transaction online” says Sudhir Pai, business head at MagicBricks.com.
While online property buying is still at its nascent stage when compared to buying clothes, electronics or books, real estate companies have seen an uptick in web transactions of late. Buying a home online has several advantages, say builders.
Buyer cannot only see a large number of properties in the market, obtain details such as home values and asking price, but also search for a home in a specific neighborhood or area of choice.
A recent study by Google India showed that over 50% of real estate buying decisions are influenced by internet research and the phenomenon of researching online for real estate information was not limited to metros but also extended to buyers in tier-2 cities.
Nowadays, builders are more transparent and offer all the project details online, which eases the due diligence process for buyers, says Surjit Singh, president-marketing, RNA Corp. In its residential project, RNA Viva, the company has installed cameras at the project site which allows the buyer to check real time progress and updates of the project online.
As the amount of quality information listed on these property websites is increasing, the online business is expected to grow at a CAGR of 40-60% in the next five years, says Sandeep Singh, chief executive officer at Century 21 India, a real estate franchisor.
Builders anticipate the online space will play a major role in home sales. For them, it is one of the cheapest options to sell homes. “Typically, the online marketing spend for every 1,000 homes sold is around Rs 2-3 crore,” says Arjun Aggarwal, chief executive officer, Bhartiya City, on the investment in online space. Online housing portals are betting big on this trend.
“As the buying decision is moving online, we will soon see the ‘Add to Cart’ option even on realty portals,” says Advitiya Sharma, co-founder of Housing.com, a realty portal.
But buying a home online also takes the security risks to another level. “People need to take basic safeguards and verify the genuineness of the information as the transaction involves big money,” says Mudassir Zaidi, national director, residential agency, Knight Frank India.
NEW DELHI: Realty firm Logix group plans to raise Rs 250 crore from foreign investors for the development of its ongoing mixed-use commercial project in Noida.
The company is developing this commercial project at an investment of Rs 1,000 crore and is looking to raise FDI to complete this project.
The 6-acre project ‘Noida City Center’ includes a 7 lakh sq ft shopping mall, 2.5 lakh sq ft office towers, two hotels with combined 400 rooms and 100 service apartments.
“Total project cost of this commercial project is Rs 1,000 crore,” Logix group CMD Shakti Nath said.
The investments are largely met through internal accruals, he said, adding that the company is in talks to raise FDI for this project.
Asked how much fund the company is looking to raise, Nath said: “We plan to raise about Rs 250 crore”.
Earlier, Logix had raised funds from Apollo, TAIB and ICICI Prudential for other projects.
Giving details about the project, he said the shopping mall would be operational in the next 4-5 months while office, hotels and service apartments would be completed in the next 2 years.
The mall would feature PVR Cinemas’ 15-screen Superplex and the first Imax of northern India. Hypermarket brand ‘HyperCITY’ will also have presence in the mall.
Noida-based Logix group has tied up with Westin Hotels for the 250-rooms 5-star hotel and Hilton Garden Inn for the 4 star hotel. The company will also have tie-up for management of its service apartments, Nath said.
Logix group has completed 4 million sq ft of IT projects. It is currently developing 3-4 residential projects in Noida with 20,000 housing units.
NEW DELHI: As more Indians log online to seek information before entering into property deals, Internet today is estimated to be influencing decisions worth about USD 43 billion, search engine giant Google said.
According to a study commissioned by the US-based firm, over 50 per cent of real estate buyers’ decisions are influenced by Internet research.
“This phenomenon of researching online for real estate information before making a decision is not limited to metros but also extended to buyers in tier II cities,” Google India Industry Director Nitin Bawankule told reporters here.
The overall influence of Internet on real estate transaction value of both residential and commercial property including rentals amounts to USD 43 billion (USD 31 billion for residential and USD 12 billion for commercial), he added.
The primary reasons for researching online were easy access to in-depth property information and market trends (60 per cent), large comparison options (52 per cent), easy access to contact details of owners and developers (49 per cent) and financing and document processing information (43 per cent).
The survey, conducted by consultancy firm Zinnov across 15 cities in India included the metros, Pune, Lucknow and Ahmedabad with 6,196 respondents.
Talking about search trends on Google, Bawankule said the number had seen a 3x growth in the last three years.
“There is tremendous opportunity for both online real estate aggregators, brokers and developers to engage the buyers online by providing rich, meaningful and immersive experience to buyers on the Internet,” he added.
According to the study, 62 per cent respondents said aggregator sites (like makaan.com and magicbricks.com) were top sources of information for them on the Internet, followed by websites of real estate companies (52 per cent).
About 45 per cent said they visited broker sites, blogs and forums to find information before making a decision.
An increasing number of people are also using their mobile devices to search for properties online.
“Mobile queries (those originating from mobile phones) are doubling every year and about 40 per cent of total searches came through mobile phones,” Bawankule said.
Also, the study found 73 per cent respondents saying they prefer using their mobile apps for researching for property.
However, a major concern for people researching online was the lack of accurate and updated information.
Respondents said websites of developers and aggregators often lacked availability of in-depth information about property and features like easy price comparison.
NEW DELHI: Builders in Noida are unable to hand over more than 30,000 completed homes to their buyers, because of a National Green Tribunal order forbidding the Noida Authority from giving completion certificates to projects within a 10-kilometre radius of the Okhla bird sanctuary.
Developers in Noida say they have in the past seven months since the tribunal’s order lost close to Rs 1,000 crore as they have been holding on the flats, paying interest on their loans as well as penalty to home buyers.
“Everyone is bleeding,” said Vineet Gupta, director of the Ajnara group, which has around 1,500 apartments waiting to be handed over to buyers. Projects of more than 45 developers including Jaypee, Amrapali, ATS, Logix and Ajnara have been impacted, with buyers demanding penalty from them for the delay.
“When the state government has recommended 100 metres around the sanctuary as the eco-sensitive zone then why doesn’t NGT (National Green Tribunal) allow the authority to give us completion certificates,” asks Getambar Anand, managing director of ATS Infrastructure and also the president of the Confederation of Real Estate Developers Association of India (Credai).
“Such a lot of stock has been put at jeopardy because of the decision, notwithstanding the fact that all of us have environment clearances for our projects.” A senior executive at Amrapali Developers said the company has 5,000 apartments ready for possession but it can’t offer physical possession to buyers. “We have sent them intimation for possession sometime back but we can’t give them their homes,” he said, not wanting to be named.
Real-estate developers have been facing a liquidity crunch over the past 12 to 18 months because of a slow economy and the consequent weak sales of apartments. According to property research firm Liases Foras, in the December quarter, unsold inventory rose to about 650,000 apartments, which would take more than 30 months to be sold. That number went up to 700,000 by the end of March 2014.
The situation in Noida puts further pressure on the stressed balance sheets of many developers operating in the area. “There is so much confusion even around how to measure the 10-kilometre radius. No one in Noida is getting completion certificates whether they think they are in the zone or not,” said Ajnara group’s Gupta. Some developers say it has become difficult to launch new projects.
“We are finding it difficult to launch new projects in the vicinity of the sanctuary because investors and banks are reluctant to fund such projects till there is clarity on the matter,” said Shakti Nath, managing director of the Logix group, which has put three of its mixed-use projects on the backburner due to the issue.
In October last year, the tribunal had directed the Noida Authority to stop all construction activity within 10 kilometres of the sanctuary and asked the central government to fix the rules on the distance to be kept for such developments from wildlife sanctuaries.
The Centre then asked state governments to suggest rules for sanctuaries depending on how fragile they were. In February this year, the Uttar Pradesh government sent its recommendation for deeming 100 metres as the eco-sensitive zone. “We should be given instructions about who to go to rather than dealing with multiple authorities,” said Anand of ATS Infrastructure.
Source: ET Bureau by Ravi Teja Sharma,
Meenakshi Sinha,TNN | Jun 3, 2014, 03.41 AM IST
NOIDA: The Federation of Noida Residents’ Welfare Associations (FONRWA) on Monday protested the 10.5% hike in residential land prices by the Noida Authority.
N P Singh, president of FONRWA, said, “The land in Noida is either sold out or belongs to farmers. So what land does the authority propose to increase the prices of? When they don’t have land to sell or buy, they have no right to increase the rates. It’s just a ploy to make Noida an expensive city for homebuyers and make money at the expense of its residents,” said Singh.
According to Singh, the proposed increase will also affect transfer, registry and stamp duty charges, burning a bigger hole in the homebuyer’s pocket. “The common man is already burdened by buying a residential property. How will he arrange the funds to meet such an increase in property prices?” asked Singh.
His views were echoed by Noida industries since the authority also increased the rates of industrial land. “We are certainly not happy with the hike in industrial land rates,” said Vipin Malhan president, Noida Entrepreneurs’ Association.
Malhan said any entrepreneur first looks for cheap land to set up an industry and plans to invest in plant and machinery. “But if the land prices will not come cheap, then an entrepreneur will look for other places like Madhya Pradesh, Haryana, to set up industry,” he added.
The RWA umbrella body was also disappointed at the authority’s complete neglect and apathy towards their longstanding demands for freehold status of all residential properties in Noida, toll-free DND (Delhi-Noida-Driveway) and a representation of a minimum of two members from FONRWA in the authority. “Though we welcome the scheme for farmers and implementation of the UP Apartments’ Act to control the builder nexus, we as residents, are disappointed at the complete lack of interest of Noida Authority in our demands. They don’t want to meet us or even listen to us despite having promised to look into our demands,” said Suresh Tiwari, senior vice-president of FONRWA.
Singh said FONRWA members would hit the roads in protest. “We understand that we have to fight our own battles and we are ready for that,” said Singh.
Buying a house or any residential property in Noida will now be a costlier affair, as the Noida and Yamuna Expressway authorities decided to hike the land allotment rate up to 10-12% at a board meeting on Monday. “We have increased the land allotment rate up to 10% in Noida in all categories, except for commercial properties. Rates of commercial property in Noida will not be increased because we want to correct the rates.
“Land allotment rates will be hiked up to 12% in Yamuna expressway area. The rates are unchanged in Greater Noida because they saw an increase in February this year,” said Rama Raman, chairperson of Noida, Greater Noida and Yamuna Expressway authorities.
The new rates came into effect on Monday.
According to officials, land allotment rates will be increased in all categories – including residential, group housing, institutional and industrial, while commercial plots will not see any increase.
“The hike was unavoidable because of the prevailing financial circumstances,” said a senior Noida authority official.
The Noida authority had increased the rates in May, 2013, by up to 9-12 % on the previous occasion.
In Noida, the highest rate of a residential property is Rs. 62,220/square meter, and the lowest is Rs. 22,625/ square meter.
Now, after the 10% increase, buying unallotted residential plots will cost Rs. 71,553/ square meter.
The authority has decided to hike land allotment rate because plans are afoot to allot 25,00 acres of land to realtors for group housing, commercial and mixed-land use purposes from June-end.
This land was earlier earmarked for special economic zone (SEZ) purposes. But because of a land row and a long legal battle, the authority has got this plot back.
It will be the last large-scale allotment to realtors. After this round, Noida will not be left with any land for further allotment.
“This 2,500 acres of prime land located along Noida Expressway in sectors 144 and 145, among others, is remaining land parcel. Therefore, we urgently needed to hike allotment rate. Once 2500 acres is allotted, Noida will not have any land to allot in future,” said an official.
The old rate for residential plots was 62,220/square meter and group-housing plots allotment rate was 84,845/ meter.
NOIDA: Fed up with the poor policies, multiplicity of authorities and corruption, UP-NCR industries and real estate is riding on Modi wave. The experts believe that the stable government would rejuvenate the economy, and this will subsequently leave positive impact on the NCR market. The industries players have been advocating for a single window clearance system, transparency in government proceedings and reduced cost of borrowing from banks for many years. It is expected that implementation of proposed GST framework; tax benefits for buyers and real estate developers will percolate downwards benefitting the end buyer of affordable and mid-income projects while the consumer is expecting reduction in home loans and rationalisation in real estate pricing.
P Sahel, vice chairman, Lotus Greens Developers said Indian industries were awaiting a robust government, which will make the market viable for sellers and buyers. “The industry, for a long time has been advocating for a single window clearance system, transparency in government proceedings and reduced cost of borrowing from banks for many years. at the same time, the consumer is expecting reduction in home loans and rationalisation in real estate pricing,” Sahel said it is expected that implementation of proposed GST framework; tax benefits for buyers and real estate developers will percolate downwards benefitting the end buyer of affordable and mid-income projects. So considering all these factors, we hope the new government will surely roll out policies favouring realty sector,” Sahel said.
The experts said that positive sentiments were visible on Friday during the trend of early vote counts presented by media groups. The trends had injected a new wave in the economy and the BSE Sensex and Nifty rallied to record life highs, breaching the psychologically important mark, while the rupee strengthened high against the dollar.
“The real estate market is based on sentiment and the positive sentiment which was missing from the market again rejanuated with the Modi government. Entire industry and buyers were suffering from the slump. With the transparent policies to boost the industries and serving the common men, we are expecting good results in the couple of months. People who had put their investment on hold will hit the market for investment and I would suggest that this is the best time investment in real estate for earning handsome profit, said Amit Gupta, MD, Orris Infrastructure.
“There is need to focus attention of Government on the imperative urgency of reforming the current wasteful and dilatory process of Plan approval through multi-Agencies of Central and State Governments acting individually and adding to the time and costs of starting and completing any Urban Space Development Project. All objective Reports and studies state that the current dilatory, multi-Agency processing of Development Plans add up to 40% cost of the project,” Gupta said. “If implemented, industry can double housing stock, reduce sale prices up to 25%, increase state and central government’s revenue by 100% as well as local Municipal authority’s revenue doubles, establishment cost of government authorities at all level by 70% and increase GDP by 1.5%,” said Anil Mithas, CMD, Unnati Fortune Group.
“We are hopeful that the real estate market, which provides bread and butter to crores of people of this country would be revived soon. The positive sentiment was missing from the market, which is why some sectors were not doing well. With the functioning of the new governments, the market will witness more growth and strength. The real estate had started witnessing revival signings after four states polls outcome last year December and its a right time to buy property otherwise post elections rates would go up and put burden on the buyers pocket. We are expecting real estate full fledge revived by August this year,” said JK Jain, CMD, Designarch group.
“The UP-NCR industries were reeling under deep slump for a long time. For the last 13 years no big industry has turned up in Noida and Greater Noida due to maligned law and order and rigid policies. There is no back up for the industry, positive sentiments were missing and at the same time harassment has gone up. With the stable government, we are hoping that entire economy will revive soon and this will influence UP-NCR,” said Gaurav Kumar Bansal, social activist.