2. Real estate is the single largest component of wealth in our society. Because
of its magnitude, it plays a key role in shaping the economic condition of
individuals, families, and firms. It can substantially influence a family’s ability
to finance its education, health care, and other important needs. Changes in
the value of real estate can dramatically affect the wealth of businesses and
their capacity to grow. Real estate has been estimated to represent
approximately one-half of the world’s total economic wealth.
It is important at the outset that we define the term real estate, when people
think of real estate, they often think of the homes in their community or the
business of buying and selling houses. This is probably because the personal
investment that most households make in their home represents their primary
involvement in the real estate market. Of course, real estate includes not only
our homes, but also our places of work, commerce, worship, government,
education, recreation, and entertainment—our physical environments, natural
and built. In addition, it includes a wide range of business and institutional
activities associated with the development, purchase, use, and sale of land
and buildings. Real estate is property. The term property refers to anything
that can be owned, or possessed. Property can be a tangible asset or an
intangible asset. Tangible assets are physical things, such as automobiles,
clothing, land, or buildings. Intangible assets are nonphysical and include
3. contractual rights (e.g., mortgage and lease agreements), financial claims
(e.g., stocks and bonds), interests, patents, or trademarks.
The term real estate is used in three fundamental ways. First, its most
common use is to identify the tangible assets of land and buildings. Second, it
is used to denote the “bundle” of rights that are associated with the ownership
and use of the physical assets. Finally, the term real estate may be used
when referring to the industry or business activities related to the acquisition,
operation, and disposition of the physical assets.
REAL ESTATE IN INDIA
India’s favourable demography and strong economic impetus have made the
country an attractive place for property investors. This doesn’t mean,
however, that investment in Indian real estate is risk free. In light of the overall
economic picture and the rapid escalation in prices in real estate over the last
few years, many real estate markets in India are currently undergoing a price
correction. However there still exists a fundamental demand-supply
imbalance and real estate remains an attractive longer-term investment
prospect. Now that India is on the radar of global investors, it is important to
understand the opportunities and challenges of Indian real estate
investments.
4. India has been attracting global real estate investors primarily on account of
the following:
Long term demand drivers in all real estate sectors;
Improve market transparency;
Attractive risk- return trade-off; and
Liberalized government regulations
ERNST AND YOUNG, 2005
Figure-1.1 (Indian cities by Market Tiers)
The Real Estate Market of India
The Indian real estate industry is on a high growth path having a current
market size of $15 billion approximately as estimated by Desai & Rane
(2006). Real estate prices have risen steeply across India over the last two
5. years growing at 40% CAGR (compounded annual growth rate). The chart
below depicts the market size which is estimated to reach $50 billion by 2010.
Source: Industry, India Info line Estimates
Figure 1.2:- REAL ESTATE MARKET SIZE
The market is growing at a rapid pace due to improved real estate prices and
sustained demand from end users as well as investors. With a population
growth of 1.7% per annum and a deficit currently of about 22 million houses
as pointed out by Saunders (2007); the demand from end users will
materialize consistently making the long term fundamentals of this sector
strong. Traditionally, residential housing was the dominant segment of real
estate development in India. This can be justified by the chart below depicting
83.3% of the overall market being held by the residential segment in 2005.
However, with the emergence of commercial office space, retail and
hospitality; substantial opportunities have been created in the non-residential
0 10 20 30 40 50 60
2004-05
2009-10
6. segments. The non- residential segment is predicted to occupy 26% of the
overall market share in 2010 as compared to 16.7% held in 2005
Source: FICCI (Federation of Indian Chamber of Commerce and Industry),
TSMG (Tata Strategic Management Group), Industry
Figure 1.3:- INDIAN MARKET SEGMENTATION
RESIDENT , 16.7
NON RESIDENT,
85
2005
7. Source: FICCI (Federation of Indian Chamber of Commerce and Industry),
TSMG (Tata Strategic Management Group), Industry
Figure 1.4:- INDIAN MARKET SEGMENTATION (2010)
Residential, 74
Non Residential,
26
2010
8. (PACIFIC STAR, 2008, PRAMERICA 2006 AND ERNST AND YOUNG 2008)
Figure 1.5- REAL ESTATE DRIVERS IN INDIA
INTERNATIONAL REAL ESTATE MARKET
International Real Estate is set to be the biggest and best investment market
of the next several years. Pennington (2001) states that while the world
economy has been rapidly changing in response to technological innovation,
real estate has evolved from a depository of wealth for households and assets
for corporations into a major force in the debt and equity markets. As land is
the one scarce economic resource that is not replenish able or substitutable,
real estate will continue to dominate the world as a prominent attraction for
9. investments and allocation to savings. Mahurkar & Senthil (2004) add that
real estate is a good opportunity to employ funds for both long and short-term
investments. It is safe and provides high yield investment as compared to
volatile returns from the stock market and limited returns from bank deposits.
Michael Smith- head of Asian real estate investment banking at Goldman
Sachs states that India is the most exciting real estate market in Asia.
(Fortune Magazine, 2006) This sector growth has not only improved the
infrastructural face of India, but also provided employment to millions and
made India a financial and retail hub. This has contributed to the organised
Investment in the real estate sector by domestic and international financial
institutions and has also resulted in the greater availability of financing for real
estate developers.
Numerous researchers have predicted the stability and importance of real
estate investment in the long run. Kaiser (1997) predicts the Indian real estate
market to be unaffected by a bust period for the next four decades.
10. (Source: - Indian real estate investment report, august 2012)
Figure 1.6:- TOP 20 COUNTRIES WITH THEIR INVESTMENT VOLUMES IN REAL
ESTATE.
11. As we can see this table clearly shows that one of the emerging market in the world, China
have the highest investment in real estate sector which is almost 100 times more than
Indian figures.
USE OF INTERNET IN REAL ESTATE MARKETING
Internet Marketing is the marketing of products and services using the Internet
as its medium. The beauty of Internet marketing is its mass appeal. It would
take enormous effort and less money to reach certain targeted audiences with
specific messages delivered in a particular way. Internet marketing also
encompasses digital customer data management and electronic customer
relationship management (ECRM), which are widely used in businesses today.
In today’s technology driven world, more and more buyers are turning to the
internet to look for an online information .No longer is the success of real
estate businesses completely reliant on word-of-mouth and persuasive print
advertising. Today’s savvy entrepreneurs understand that in order to be truly
successful in such a competitive environment it is absolutely essential to
conduct comprehensive Internet marketing. Internet marketing has taken web
based businesses to greater and unimaginable heights. And the same has
extended into the fields of real estate internet marketing too.
Real estate internet marketing is a booming business, along with all other
forms of internet businesses. Now, it seems that very little can’t be sold over
the internet. An estimated 20 million people shop online for things as diverse
as airline tickets to vacation homes.
12. The use of the Internet by homebuyers has increased phenomenally over the
years. In a 2006 survey, the National Association of Realtors found that over
75% of buyers start their search online. With so many homes on the market
today, it is now essential that these buyers see your home first. Research
firms estimate that online shopping exceeded $200 billion in 2003 which will
be double in the coming years.
The latest study says that more than 85% of real estate transactions starting
online in 2010, it is more important than ever to assure that your real estate
business is getting the exposure it needs on the Internet.
Real estate internet marketing has opened new avenues to all the realtors
who are keen on investing in real estate and procuring a property regardless
of whether it is a residential, commercial and industrial property. Every realtor
has to advertise his ventures in order to make the maximum profit. And what
best medium than the online platform to market the business.
The importance of real estate internet marketing is that it helps you to boost
your sales and acquire a position in the market, where buyers and sellers can
reach you and get to know about your services. With the help of a web site
you can promote the properties that you currently have as well as the services
that you render. By signing up with the services of reliable real estate internet
marketing websites, you can not only benefit from the exposure that it gives
you, but can also participate in the real estate SEO blog by leaving valid and
relevant comments which would attract quality traffic to your website. It helps
13. you to add your name at the place where people can easily reach you and
your services as majority of people are using the internet to look for property.
Internet real estate marketing importance is due to the fact that it can help you
in advertising in far better ways than the older forms of advertising. Once
you’re visible and easily found on search engines, several of the helpful tools
like press release, article writing, blogging et cetra. for real estate internet
marketing will support you to develop a loyal customer for your properties.
Internet marketing by email can generate more visibility and create more
sales for your business.
Real estate professionals can use e-mail to inform customers about sales,
announce new lines of products or increase visibility within an existing base of
customers. Agents and developers can create, manage and launch their
Projects and properties themselves. This internet real estate marketing helps
to maintain a healthy relationship with the potential customers that may be
new or old with the help of an interactive site which facilitates them to sign up
for new things, offering to the point information on the area and pictures which
keeps them interested and bounded to the site.
An ample number of researches and surveys have been conducted which
prove that an increasing number of consumers are using the Internet to buy,
sell and invest in real estate. By placing your home for sale on the on real
estate websites, can help you be certain that your home is accessible to more
than 70% of the home buyers who use the internet to search for a home.
14. ADVANTAGE OF USING INTERNET AS A MEDIUM IN REAL ESTATE
MARKET:-
Most important technological innovation to impact real estate is that it
improves the market efficiency
By reducing information asymmetries
Reducing transaction costs
Reducing market entry-costs Economics
16. The online real estate market is growing in size and influence. As learned
from the 2007 Indian Association of Realtors report that 86% of home buyers
started using the Internet as part of their research process before selecting a
specific home and before contacting a real estate agent.
Real estate professionals have been responding to this new reality by taking
the first step -- building out their own web sites and shifting marketing dollars
from offline to online. According to Borrell Associates, a combination of the
slump in home sales and the increasing influence of the Internet will force a
dramatic sea of change in real estate marketing strategies deployed by
agents, brokers and builders. Online media is forecasted to become the
number 1 ad spend medium for real estate professionals, capturing more
than 30% of the total real estate ad spending by 2012.2 To help real estate
professionals navigate this changing landscape, PropTiger a leading Real
Estate service provider, to study online behaviour of real estate consumers.
What follows are insights and strategies for working with the four distinct
audience segments that have emerged.
The Real Estate Boom: A genuine Euphoria
Indian sector has seen an unprecedented boom in the last few years. This
was ignited and fuelled by two main forces. First, the expanding industrial
sector has created a surge in demand for office-buildings and dwellings. The
industrial sector grew at the rate of 10.8 per cent in 2006-07 out of which a
17. growth of 11.8 per cent was seen by the manufacturing sector. Second, the
liberalisation policies of government have decreased the need for permissions
and licenses before taking up mega construction projects. Opening the doors
to foreign investments is a further step in this direction. The government has
allowed FDI in the real estate sector since 2002. FDI was deemed necessary
in the view of making the sector more organised and increasing
professionalism. The villages adjacent to the metro cities have experienced
sky-rocketing land prices. This has induced farmers to sell their land for good
money.
Future Prospects on Real Estate Industry
The real estate market in India is yet in initial stage and the scope is simply
unlimited. It does not resemble a bubble that will burst. An unhindered growth
for the next twenty years is almost sure. This is because the outsourcing
business in India is going in great guns and this entails a huge demand for
commercial buildings and urban housing besides improvement in
infrastructure. The organised retail market in India is also accelerating with
players like WalMart, Bharti, Reliance et cetra. looking forward to make a
foray thus stepping up the demand for real estate.
According to former Planning Commission Advisor Tarun Das (DEC- 2010), a
price index for the housing market to track price movement must be
incorporated. The government must ensure that there is no shortage of funds.
18. SEBI (Securities Exchange Board of India) recent harbinger of permitting real
estate mutual funds in both private and public sector will go a long way in
attracting funds from small investors who emphasize on certain return.
Another impediment that can be eased on the discretion of government is the
existing tax laws and other complex regulations relating to multidimensional
Real Estates such as industrial parks and SEZs (Special Economic Zone).
RITES (Real Estate Investment Trusts) of the type introduced in U.S.,U.K.
and Germany should be imitated and explored.
COMMERCIALIZATION OF INVESTMENT
The liberalization of foreign direct investment norms and related initiatives
may well set off a second boom in India’s real estate industry. Until recently,
only a handful of banks, financial institutions (i.e. insurance companies), and
high net worth individuals (HNWI) provided direct funding for the opportunistic
development of real estate in India; however, this paradigm is quickly
changing. Attracted by India’s booming economy and its consequences in the
real estate sector predicated, a few large financial and private equity firms are
now launching funds targeted at the opportunities in the sector. These
initiatives suggest that the commercialization of real estate investing is
already underway in India, which should help redirect capital flows on a large
19. scale into the country. Few institutions which are encouraging this sector by
providing enough of funds to the buyers.
Housing development and finance corporation (HDFC)
ICICI joint ventures
Infrastructure Leasing and Financial Services (ILFS) among others
STATEMENT OF THE PROBLEM:-
Internet is becoming a necessity in today’s world. Real Estate market is
growing and India is been believed to be 20th biggest market for Real Estate
investment in the world with a market of 3.4 billion USD (mentioned below) -
“Economic Times”
There are millions of people who purchase homes every year in India and out
of that million there are 1% NRI customers, when NRI customer invest in
India, there will be a particular reason to invest and this reason is the theme
of this project. In this report, we have tried to find the reason of NRI
customers who are investing in India and not in other countries apart from this
I will also focus on the point, where I would like to find the medium from where
NRI customers get to know about the Indian Properties.
20. OBJECTIVES OF THE STUDY:-
To determine the effectiveness of ecommerce in the real estate market
through examining and comparing the differences in the way a resident
Indian, an NRI and a foreign customer respond on PropTiger.
To find the behaviour of NRI clients
METHODOLOGY
RESEARCH DESIGN:-
This research is limited only to NRI clients who have or are willing to
invest in Indian properties so this will not include any data which shows
a person staying in India or Indian citizen preferences. The
questionnaire prepared were made to know the reason why NRI wants to
invest in India and also it focus on the fact where it shows how a NRI
client get to know about the properties in India i.e. Primary source of
collecting information.
To collect these data a questionnaire is been prepared which will focus
on NRI clients only and based upon this factor, questionnaire is been
designed which will give an image in which one can draw a picture of
NRI preference in Indian market.
Sample
21. As discussed earlier all of our respondent who are been part of this
survey are NRI’s and as it was difficult to collect a good number of
respondent, we only manage to get responses from 38 respondents.
Out of 38, 32 respondents were interacted in an EXPO, which was
held in Malaysia on May 2013. The rest 6 responses are the replies
which we got in our Internet activity (mails). So by and large we
have responses from Malaysia and also we have couple of them
from Singapore and UAE and the rest two are from US and UK
respectively.
TOOLS:-
In this research we have taken only NRI clients who have shown
interest in buying a property in India. We have designed the
questionnaire where in the first three question talks about the
personal details of the respondent and those for the confidential
purpose are not been revealed by the company. The next questions
talks about the interest, reason of investment of the respondent and
also we have proposed couple of questions through which we can
22. identify what is the medium used by the respondents to know about
the property.
Limitations of the Study
Every research has certain drawbacks. It is therefore necessary to
incorporate them in the thesis to obtain a true perspective of the research
topic. The following are a few drawbacks I faced during my research study.
The research is been conducted via mails and questionnaire so there is a
possibility of error as we are not so sure about the originality also we have no
idea if the respondent was clear about the questions. There was no personal
contact with the respondents. Another drawback what we can consider is the
number of respondent in the research. There were only 38 respondent whose
consent has been consider and with these numbers we cannot conclude a
clear image of the facts.
The study makes use of qualitative analysis, which is interview and
questionnaire based in order to find out the use of internet in finding
properties in the Indian real estate market. However quantitative
approach has not been used as it would have prolonged the study.
23. Due to time constraints, industries associated with the real estate
sector such as construction and infrastructure have not been studied to
establish the persistent demand for the realty segment in the
forthcoming years.
Also due to difference in valuation methods adopted by different
countries and limited relevant data; comparison of Indian to any other
country’s real estate market has not been possible.
Another drawback was getting through to companies for the purpose of
an interview. Limited number of interviewees induced me to collect
further information through a questionnaire survey. Further, most of my
could be a possibility of a biased research being carried out due to all
Interviewees are being Malaysia based. Therefore I feel that for any further
research on the Indian real estate market to be effective, the sample size
must be increased to adequately include respondents from all parts of the
world to get a clear national perspective of the real estate market.
PEST FACTOR:-
24. (Source:-: A Qualitative Approach by Rashi Mehta 2006-2007)
Figure 2.1:- PEST factors in Real estate market in India:-
Political Factors
The Government has greatly influenced real estate development through
various laws, taxes, infrastructure and environmental regulations. The
Construction Industry is considered to be one of the heavily taxed sectors of
the economy. Any further tax imposed on this sector would affect the orderly
growth and development of the Real Estate Sector.
Economic Factors
25. Macroeconomic factors according to me, which are instrumental in increasing
real estate demand, are inflation levels and interest rates. Low and controlled
inflation in the recent years have increased the purchasing power of
consumers thereby increasing the demand for real estate. On the other hand,
the banking sector has provided further liquidity into the domestic real estate
market by charging lower interest rates. This has changed the lifestyle of
consumers who now have easy access to credit facilities.
Socio-cultural Factors
There has been a rising trend in the per capita income and the Gross
Domestic Product (GDP) of the Nation. The average salary of Indians is
increasing every year with more Multi- National Companies coming into India.
Urbanization is moving at a fast pace putting constant pressure on need for
more urban land space. The inflation levels and interest rates being under
control have led to higher disposable income and hence demand for more
homes.
Technological Factors
The Internet revolution seems to be the most important technological
innovation to impact real estate since the invention of the automobile and the
elevator.
26. RISK IN INVESTING IN INDIA
India has seen a great amount of currency inflow, particularly in service sector
and real estate is a part of this sector. Investing in an emerging country such
as India has significant risk attached to it, the main risk what investors carry
while investing in an emerging markets is shown below :-
(Source: - PACIFIC STAR, 2008, PRAMERICA 2006 AND ERNST AND YOUNG 2008)
Figure 2.2 (Risks which carry while investing in India)
27. With this limitations and risk, let’s check what are the rules framed by the
government of India and RBI together for the international investors. Few
questions click’s when we think of foreign investors:-
“CAN NRI BUY A PROPERTY IN INDIA, AND IF YES THEN WHAT ARE
THE RULES AND REGULATION HE HAVE TO FOLLOW?”
ACQUISITION OF PROPERTY BY AN INDIAN CITIZEN RESIDING
OUTSIDE INDIA:
No special permission is required to acquire any immovable property in
India other than agricultural land, plantation property or a farmhouse.
It is notable that only non-residents who are Indian citizens, or who are
of Indian origin referred to as NRI have been permitted to invest in
immovable properties in India.
Further, the non-residents who are Indian citizens or persons of Indian
origin can also acquire any property (including agricultural properties,
et cetra.) by way of inheritance.
ACQUISITION OF PROPERTY BY A PIO (PERSON OF INDIAN ORIGIN):
The purchase made by the PIO should be from out of the following
funds:
o Funds received in India
28. o Funds held in any Non Resident Account maintained in
accordance with the Provisions of FEMA and the regulations
made by the RBI (Reg. 4(a)).
A PIO resident has to take permission for an agricultural land or
plantation property or a farm house by way of gift.
o From a person resident in India, or
o From a person resident outside India who is a citizen of India,
or
o From a person of Indian Origin resident outside India. (Reg.
4(b)).
Thus, a PIO can even inherit agricultural land or a farmhouse or a
plantation property, which he cannot normally acquire by way of
purchase or a gift. However, no income can be earned on agricultural
properties.
PERSONS WHO ARE ABSOLUTELY PROHIBITED FROM ACQUIRING OR
TRANSFERRING AN IMMOVABLE PROPERTY IN INDIA WITHOUT PRIOR
PERMISSION OF RBI:
All persons, whether resident in India or outside India, who are citizens
of Pakistan, Bangladesh, Sri Lanka, Afghanistan, China, Iran, Nepal
or Bhutan are prohibited from acquiring or transferring immovable
29. property in India without the prior permission of The Reserve Bank of
India.
The above mentioned regulation is based on whether a person is a
resident or a non-resident. If say a person, who is a citizen of China,
comes and takes up employment in India, he becomes an Indian
resident under FEMA. As a resident there are no restrictions on
acquiring immovable property in India.
31. The real estate sector in India assumed greater prominence with the
liberalisation of the economy, as the consequent increase in business
opportunities and labour migration led to rising demand for commercial and
housing space. At present, the real estate and construction sectors are
playing a crucial role in the overall development of India’s core infrastructure.
The real estate industry’s growth is linked to developments in the retail,
hospitality and entertainment (hotels, resorts, cinema theatres) industries,
economic services (hospitals, schools) and information technology (IT)-
enabled services (like call centres) and vice versa.
The Indian real estate sector has traditionally been dominated by a number of
small regional players with relatively low levels of expertise and/or financial
resources. Historically, the sector has not benefited from institutional capital;
instead, it has traditionally tapped high net-worth individuals and other
informal sources of financing, which has led to low levels of transparency.
This scenario underwent a change with in line with the sector’s growth, and as
of today, the real estate industry’s dynamics reflect consumers’ expectations
of higher quality with India’s increasing integration with the global economy
RESIDENTIAL REAL ESTATE
Residential real estate industry has witnessed stupendous growth in the past
few years owing to the following reasons:
32. Continuous growth in population
Migration towards urban areas
Ample job opportunities in service sectors
Growing income levels
Rise in nuclear families
Easy availability of finance
Demand for houses increased considerably whilst supply of houses could not
keep pace with demand thereby leading to a steep rise in residential capital
values especially in urban areas.
33. Broadly, residential real estate industry can be divided into four growth
phases, as can be seen in the chart below:
Figure 3.1 (Housing growth trajectory)
Phase I (2001-2005) was an initial growth phase with stabilising residential
real estate prices following the global recovery post the “dot com” bust and
9/11 terrorist attacks in New York. At the same time, there was steady growth
in Indian economic activity, noteworthy recovery in IT/ITES industry, growing
urbanisation and a rising trend towards nuclear families.
34. Phase II (2006-2008) was a high growth phase where high demand for
residential real estate led to doubling of housing prices. Demand rapidly
increased due to India’s growing population, accentuated urbanisation, rising
disposable incomes, rapidly growing middle class and youth population, low
interest rates, fiscal incentives on interest and principal payments for housing
loans and heightened customer expectations.
Phase III (2009-2010) witnessed substantial slowdown and part recovery in
demand because of the global economic downturn, which led to a decline in
affordability and tight liquidity. The retreat of various real estate investors,
accompanied by slowdown in the capital markets, has resulted in oversupply
and falling prices.
Phase IV (2011-2014) is expected to remain a consolidation phase after
slowdown. Demand is expected to remain strong with capital values
witnessing modest rise. This period is expected to witness substantial supply
of housing especially in urban areas.
35. FUTURE OF THE REAL ESTATE INDUSTRY IN INDIA
Real estate will become a stabilized sector of India like the manufacturing
sector. Currently at a size of about $15 Billion, the segment is expected to
grow to $50-$100 billion. While the future for the entire industry is bright, what
has effectively been witnessed from the study is that there is a wide diversity
in the growth. Indian real estate segment plays on regional dynamics. Every
region in India seems to be growing at a different pace
Mr Jain argues while comparing the Indian markets to that of USA, “Indians
are conservative and they would rather put their money in buying a house
than the USA system where people pay monthly instalments and then
mortgage their house to raise further money. However, this trend will soon
catch up in India over the next few years. While the interest rates in the USA
are very low boosting the housing sector; India still has to witness this
development.” This can be supported by a snippet on the savings rate of
Indians. A study by CLSA suggested that High Net worth Individuals invested
25% of their wealth in real estate of which 36% was in Asia Pacific region;
another positive sign for the good times to come. “With the markets becoming
organized, there is creation of a certain depth in them”. To simplify Mr.
Mistry’s statement, real estate has become an investment tool. Capital gains
with stocks are now flowing into the real estate segment. Earlier focus was
36. primarily on residential development with no lease model and dealings in
unofficial money. Now various funds and structures according to Mr. Mistry
are entering the arena such as “REITs structure, lease framework, slum
rehabilitation, society redevelopment and hotel growth. Eighteen Indian
developers are now looking at investing in Singapore listed REITs which
shows the global presence of Indian real estate markets. The future of the
real estate industry will be extremely specialized with companies splitting into
different structures. Investors will have a choice to narrow their investments in
real estate into a land bucket, developer bucket, rental asset (yield) bucket or
a combination of these according to their risk appetite.” An example of this
structure can be enumerated by the great success by Capital-Land - the
Singapore based real estate Company that owns a separate land company,
Developer Company and its own REIT listed on the Singapore markets
(CLSA, 2006)
38. “PropTiger” is an independent real estate advisor with a pan-India presence.
We aspire to be your first port of call if you want to buy a residential property.
Mission of the company is:
"To help Indian families buy their dream home."
Headquartered in the National Capital Region of Delhi (NCR), PropTiger has
been founded by alumni of Harvard Business School, IIT and ISB who
combined have decades of experience in real estate in India and abroad.
PropTiger has a specialist team of real estate experts spread across 8 cities -
Noida,Gurgaon, Mumbai, Pune, Bangalore, Chennai, Kolkata and Ahmed
abad. Each of our staff is well trained across different aspects of buying
residential property - from helping you narrow down the various options, to
selecting the optimal property for you, to completing the final paperwork
related to the transaction.
39. Services offered by the company:-
They believe that their focused approach helps them stand out from their
competitors. Therefore, PropTiger only offers the following two services:
Property Advisory - Buying an apartment in original booking from a
developer
Loan Advisory - Applying for a home loan to finance the transaction
If you are a first time buyer of residential property, chances are that you might
be anxious and somewhat confused about how to buy a house and how to get
it financed through a loan. This is where PropTiger comes in. We recognize
that there are many different real estate brokers, consultants and advisors.
However, what sets us apart from all these worthy competitors is our unique
combination of property and loan advisory.
The following are sequence of steps that our experts will take you through so
that you can buy your dream house:
1. Identification of suitable properties that meet your criteria -
location, size, budget, developer.
2. Budget analysis and affordability of property - how much can you
afford and what is your loan capacity.
3. Site visits, including viewing of sample flat if available.
40. 4. Negotiation with developer for best price, terms of payment and
location in tower.
5. Completion of paperwork so that developer can send you allocation
letter when initial instalments have been paid.
Thereafter, our specialist loan team can help you get the cheapest and the
most credit friendly loans on the best terms.
Goal of PropTiger is to make the home-buying process easy, so that you can
make the best decision for you and your family.
42. AGE GROUP % OF PEOPLE
30-40 47.36%
40-50 26.31%
50-60 23.68 %
60 and above 2.63 %
TABLE 4.1 Age group of the respondent:-
In this report, we managed to get responses from 38 clients and out of these
numbers, what we found is most of the client who participated in this survey
belongs to the age group of 30-40 which constitute almost 50 % of the
respondent and when we move at the higher side, we can see only 1 client,
2.63 % who belongs to the age group of 60 and above age group. From this
particular sheet of data we can predict that most of the NRI clients who eyes
for an apartment in Bangalore, India are middle aged group i.e. between 30-
40 or 40-50. So targeting these age groups will be profitable for the company.
43. FIGURE- 4.1.1 - AGE GROUP OF THE RESPONDENT
47.36
26.31
23.68
2.63
0
5
10
15
20
25
30
35
40
45
50
30-40 40-50 50-60 60 and above
44. GENDER % OF RESPONDENT
Male 86
Female 14
TABLE-4.2 Respondent Gender group
The respondent participated in this survey were mostly male and that’s
obvious because most of the respondent were of Indian origin and in the
Indian culture, male partners are been given the charge of taking decisions.
46. CITY IN WHICH THE RESPONDENT HAVE ALREADY INVESTED:-
CITY % OF RESPONDENT
CHENNAI 5.26%
MUMBAI 0.38%
BANGALORE 0.38%
AHMEDABAD 0.38%
TABLE 4.3- NRI client Investment options (City in India)
In this survey, we found that most of the respondents were first time buyer except
5 respondents and these five respondents have invested in Metro cities in India.
47. CITY IN WHICH THE RESPONDENT HAVE ALREADY INVESTED:-
FIGURE- 4.3.1 NRI client Investment options (City in India)
0
1
2
3
4
5
6
CHENNAI MUMBAI BANGALORE AHMEDABAD
5.26
0.38 0.38 0.38
48. What is the primary source to get to know about the Real Estate market in
India?
SOURCE % OF RESPONDENTS
INTERNET 65
EXPO 20
FRIENDS/RELATIVES 15
TABLE-4.4- source of information
From this table we can clearly see that how much Internet dominates. The
use of internet to collect information accounts for almost 80 % followed by the
EXPO in the international country. The reason we can see that the elder
people who rarely use internet are the one who opted for options other than
Internet and we can also see that few respondents have taken friends and
relatives word to find a property.
50. What is the reason behind investing/wanting to invest in India?
REASON FOR INVESTING % OF RESPONDENTS
GROWTH OPPURTUNITY 44.73
LOW INVESTMENT 26.31
FAMILY PRESSURE 13.15
RETURNS 5.26
TABLE-4.5 Reason of Investing
Being India is a developing country and also one of the powerful and
influencing countries in Asia. People have a believe that investing in Indian
market will fetch them good returns as the growth in India is seen at a higher
rate and that was the reason why 17 out of 38 said that they are investing
because of the growth whereas one more reason which popped out is the
investment factor, respondent felt that investing in India is lower and better as
compare to other countries.
52. “Real- Estate Brokers/ Consultant are becoming a vital element in India”, do
you agree with this statement?
RESPONSES % OF RESPONDENTS
YES 74%
NO 26%
TABLE- 4.6- consultants play vital role in India
Information is a vital part in real-estate market and customer never gets
happy getting information from one source. Customer keep on browsing about
a particular things till they finally buy it and real estate brokers and
Consultants are playing this game effectively. The reason why most of the
respondent said that they feel “real-estate brokers and consultants” are vital
because these are the people who extract all the required information from
the market and the builder and share the same with the customers so this
things make customer job easier as then they don’t have to browse any. Apart
from that, Brokers also provide them options and discounts which they miss
when they interact with one particular builder.
54. Did any one or more of these consultants try to contact you or vice-versa?
COMPANIES % OF RESPONDENT
PROPTIGER 94.73%
INDIAHOMES 15.78%
BOOKAPROP 7.89%
COMMONFLOOR 5.26%
ALLCHECKDEALS 23.68%
TABLE4.-7- Indian consultant who tried contacting NRI clients
It will be bias if It say PropTiger interacted with all the customers, the result of
shows that 99% of the respondent were contacted by PropTiger but it may not
be true as the respondent who were contacted here for the survey was done
with the help of PropTiger so there are chances for biased results, but we
55. can see that the biggest competitor of PropTiger i.e. Allcheckdeals.com also
have a convincing number followed by IndiaHomes.com and Bookaprop.com
FIGURE-4.7.1- Indian consultant who tried contacting NRI clients
PROPTIGER,
94.73%
INDIAHOMES,
15.78%
BOOKAPROP,
7.89%
COMMONFLOO
R, 5.26%
ALLCHECKDEAL
S, 23.68%
56. How was the service offered by these Consultants?
SERVICE OFFERED WAS:- % OF RESPONDENDT
GOOD 79
SATISFACTORY 21
TABLE- 4.8- Client feedback on consultant services
Customers are never happy for what they get. They always expect more than
what they get. In a sales industry it is necessary to keep customers need as
the first preferences but sometimes in this competitive world it lacks and that’s
was the reason we can see that people generally said that they were happy
with the service but it could have been better.
57. FIGURE- 4.8.1 Client feedback on consultant services
0
10
20
30
40
50
60
70
80
GOOD SATISFACTORY
79
21
SERVICE OFFERED BY CONSULTANT WAS: -
58. Do you get all desired information in a Real Estate broker webpage?
INFORMATION IN WEBPAGE % OF RESPONSES
TO SOME EXTENT 21.05
YES 2.63
NO 74.32
TABLE-4.9- client feedback on consultant webpage information
People keep browsing and then keep searching, but they don’t get the
exact information and this is the concern to all online information grabber.
Most of the respondent said that they didn’t get all the information about
their desired property online. Whereas only 18% of the respondent said
that they are happy with what they got, it was sufficient enough to take
decisions
59. .
FIGURE- 4.9.1 client feedback on consultant webpage information
TO SOME
EXTENT,
21.05%
YES, 2.63%
NO, 74.32%
60. What all information you expect when you browse a Real Estate broker webpage?
OPTIONS % OF RESPONSES
PRICE 75%
LOCATION 5%
ALL DETAILS 5%
CONSTRUCTOR 2%
POSSESION INFORMATION 2%
DISCOUNT INFORMATION 3%
APPROVALS INFORMATION 8%
TABLE- 4.10- Missing information in consultant webpage
From the above table, we can see that most of the people told that they think
Price of the property should be mentioned in the Website as that helps them to
61. take decision in the better way. Apart from the price, few respondents also
looked worried about the approval factors (Government approvals).
FIGURE-4.10. Missing information in consultant webpage
PRICE
75%
LOCATION
5%
ALL DETAILS
5%
CONSTRUTOR
2% POSSESION
2%
DISCOUNT
3%
APPROVALS
8%
63. After the complete study I can understand the fact that India is one of those
countries which attract investors to put their money and just putting their
money in something doesn’t make sense and there where real estate plays a
vital role. In the recent times world faced a recession attack and India
survived that quiet promisingly. Though there was a downfall but it recovered
and recovered well. The belief in Indian market which we can find is, the
immovable assets are considered to be the best investment as there are very
minimal chances of depreciation. The value of Land and the houses are
touching sky in urban areas and Investors are tapping that in regular times. If
we talk about the rural areas, the investors don’t prefer to go for those
locations but there will be a time when the demand of these locations will be
more than the Urban areas and again we can see Investments flowing from
all over the world.
One more concern which I felt is the NRI customers who are willing to invest
are mostly of Indian origin and that we can expect one to buy a piece of land
in the home country or In the native but there are areas where we can seek
investment from the International investors. Government are very liberal as
per the investment from Foreigner are concern but there is a need to attract
them and make them aware of the situation and benefits in Investing in India.
64. As per PropTiger is concern, I found this is the only company in the Market
which have great potential to grab the market share in Real Estate
consultancy market, there are few reasons which support this:-
They mostly deals with Tier-1 builders, this make PropTiger secure as
the builders will be clean and no future litigation will be seen.
It provides a clear picture to the customer as per the location/ rates /
property is concern.
The Manpower what PropTiger have is not just more in numbers than
the competitors but are also promising which help customer to buy
their dream homes in the country.
There is a special NRI team in every branch which take cares of
overseas operations which again generate more of business for the
company as well as they helps in bringing investment in the country.
66. This chapter sums up the research carried out for the thesis. It briefly covers
the literature review, methodology and analysis to present the main findings of
the study. This is followed by the limitations of the research; offering
researchers a possibility of falling upon an interesting area for further study.
Lastly, the chapter provides recommendations for sector improvement.
This dissertation aims at finding the demand of real estate market in India
among NRI customers and determines whether there are lucrative
opportunities for investment in the market. The research study was split into
four broad sections and an interview and questionnaire method was adopted
for conducting the primary research. The four research areas were;
importance and growth of the real estate industry in India, different avenues
for investment in the sector, concerns regarding the sector, the role of the
Government. The interviewees were all of Indian origin residing outside India
and all of them had/ have an interest in Indian real estate market because of
various reasons. The respondents of the questionnaire comprised of the
above along with consumers the end-users of property.
67. The main research findings are summed up below:
With a rising population growth (1.7% per annum) and consistent demand for
housing (real estate) and consumptions (commercial); India is set to have a
long-term active demand from the consumers’ segment. The demand is not
only limited to the local buyers but it have enough of opportunities for the
customers across borders and that’s the reason we can find a steady growth
of NRI buyers In Indian Real estate market. It is for this reason that India is
increasingly gaining significance as an investment destination for real estate
round the globe. After analysing all reasons given by the respondents for the
growth of the sector, it can be concluded that a large proportion of the NRI
customers is attracted towards Indian real estate because of its growth. Also
real estate as an investment tool has been growing in importance over the
years in boosting an investor’s wealth portfolio. This is due to higher returns
being generated on investing large amounts of funds and the possibility of
earning from various sources such a capital appreciation of land prices,
dividends from holding Real Estate Company shares, rental income et cetra.
68. REFERNCE LIST
Desai, S., & Rane, S., (2006). ‘Real Estate- Gold Rush,’ S.S. Kantilal
Ishwarlal Securities Pvt. Ltd (SSKI), pp.1-56
Economy watch (dated 23 November 2010) “Real Estate Industry,
Indian Real Estate Market and Boom. Downloaded from
http://www.economywatch.com/real-estate as on April 10,
2013
Federation of Indian Chambers of Commerce and Industry, New
Delhi. (2007). ‘Current State of Indian Economy’, pp. 1-35.
Financial Times. (dated August 8, 2007). ‘Indian real estate opens to
foreign investors.’ Downloaded from
http://www.ft.com/cms.html as on April 10, 2013
Fortune Magazine. (July 10, 2006 issue). ‘Indian real estate: boom or
bubble?’ Downloaded from http://cnnmoney.com as on August
5, 2007.
Indian Economy Blog. (Dated August 1, 2007). ‘Entrepreneurship:
How India Scores Over China.’ Downloaded from
http://indianeconomy.org as on August 3, 2007
Kanwar, O., (2005). ‘Real Estate International Development Summit,’
Federation of Indian Chamber of Commerce and Industry
(FICCI)
69. Kaiser, R., (1997). ‘The Long Cycle of Real Estate,’ Journal of Real
Estate Research, vol. 14(3), pp. 233-258
Mahurkar, P., & Senthil, G., (2004). ‘Real Estate Fund Management:
Indian Perspective,’ Asian Real Estate Society, pp. 1-34
Pennington, A., (2001). ‘The evolution of real estate in the economy’,
Journal of Real Estate Portfolio Management, vol. 3, pp.
34- 43
Saunders, J., (2007). ‘Changing Landscape: Demand shifting to a
higher gear,’ Crédit Lyonnais Securities Asia (CLSA) India
property -Sector Outlook, pp.1-63.
Vadivel,v (2003) ‘Can NRI invest in India’, the charted accountant
(Oct 2003), 430-435
Websites:
www.indianrealestateforum.com
www.sociologycommission.org/docs/glossary.htm
http://www.proptiger.com/about_us.php
http://www.proptiger.com/our-services.php
71. QUESTIONNAIRE FOR INTERNATIONAL INVESTORS WHO OPT FOR INVESTING IN
INDIAN REAL ESTATE MARKET (BANGALORE)
Respected Sir/ Ma’am,
I am doing a brief study on international investors who are keen or had invested in
Indian real-estate market as a requirement of post-graduation. I request you to spend a
few minutes to respond to the following questionnaire.
1. Personal Details
Name:.............................
Email- ID:………………………………………………………………….
Contact Number:-…………………………….
Age: .......... years Sex: emale
Male
2. Is this the first time you are investing in Indian Real estate Market?
a. Yes b. No
If No, which Location (City) you have invested earlier?
.....................................................
3. What is the reason behind investing/wanting to invest in India?
a. Growth Opportunity c. Family Pressure
b. Home country influence ( For NRI) d. Comparatively Low
investment
4. What is the primary source to get to know about the Real Estate market in
India?
a. Newspaper c. Friends/ Relatives
b. Indian real estate EXPO d. Internet- (E-commerce)
5. Do you agree with the fact that internet is one of the best methods to collect
information ?
a. Strongly agree c. Agree
72. b. To some extent d. Disagree
6. “Real- Estate Brokers/ Consultant are becoming a vital element in India”, do you
agree with this statement?
a. Strongly agree c. Agree
b. To some extent d. Disagree
7. Did any one or more of these consultants try to contact you or vice-versa? Tick
all the consultants you have interacted with.
a. PropTiger Real Estate c. 99acres.com
b. Allcheckdeals.com d. Magicbricks.com
If Others……………………………………….. (Name it)
8. How was the service offered by these Consultants?
a. Very Good c. Good
b. Satisfactory d. Disappointed
9. Do you get all desired information in a Real Estate broker webpage?
a. Yes b. To Some extent c. No
If No, What all information you expect when you browse a Real Estate broker
webpage?
b. Detail information on the property c. Exact location of the Property
c. Price breakups d. Offers/ Discounts, If any
If Others…………………………………………………………………………………………
Thanks for your valuable time. We from “PropTiger” assure you that your details will not
be share else-where apart from this educational report.
