Budget 2024: Proptech's pivotal role in shaping India's real estate landscape

Budget expectations: India's real estate industry, poised to reach $1 trillion in revenue by 2030 and contributing significantly to the GDP, is in a transformative phase. Proptech, or property technology, is not merely a facilitator but a pivotal force in driving this growth. With the overall real estate industry expected to be at ~13% of GDP by FY 2025, Proptech's role extends beyond driving operational efficiencies to being a key economic driver.

As India prepares for the Union Budget, the real estate sector awaits decisions that could shape its future. Emphasising affordable housing, granting the sector industry status, and process streamlining, such as single-window clearances, is crucial for sustainable growth.

The Emergence of Proptech as an Economic Catalyst

The integration of Proptech in the real estate sector isn't just a trend; it's a transformative force. Advanced AI analytics help predict market trends and optimise pricing, blockchain ensures secure transactions, and virtual reality enhances consumer engagement. These innovations directly contribute to the industry's growth, attracting substantial investments and solidifying real estate's position in India's economic narrative.

From virtual reality property viewings to IoT-based smart building management, Proptech is redefining the real estate landscape. For instance, blockchain technology is revolutionising property transactions with transparency and security, while AI-driven platforms are providing more personalised consumer experiences. These technologies not only streamline operations but also significantly reduce costs, boosting the sector's profitability and appeal.

Proptech and Sustainable Urban Development

Proptech's influence extends to sustainable development, aligning with the government's objectives for urban growth. Energy-efficient building technologies and green construction methods reduce environmental impact, demonstrating Proptech's role in creating sustainable urban spaces.

Government Policies: Catalysing Proptech Advancement

The government's role in fostering a conducive environment for Proptech cannot be overstated. Policies that offer tax incentives for Proptech start-ups, support for sustainable building technology R&D, and encouragement for digital transactions in real estate can accelerate industry growth. The budget's focus should thus include specific provisions for nurturing this technological ecosystem.

Real-world Evidence

Success stories from Indian Proptech startups and global examples illustrate the profound impact of these technologies. For instance, a prominent real estate platform in India introduced an innovative feature enabling virtual reality (VR) property tours. This technology allows potential buyers and renters to explore properties remotely, offering a 360-degree view and an immersive experience. During the pandemic, when physical property visits were limited, the platform's VR tours saw a significant uptick in usage, allowing the real estate market to continue functioning effectively. This innovation not only enhanced the consumer experience but also expanded the market reach for sellers and realtors.

Another example is the AI-driven platform by PropertyGuru (a renowned online property company in Southeast Asia), known as FastKey, that streamlines the property sales process from launch to close. It provides project marketers and property developers with a comprehensive sales management solution that automates and manages leads, monitors sales progress in real-time, and provides detailed analytics reports. This not only enhances the buyer's journey by making it more personalized but also enables developers and agents to work more efficiently by automating routine tasks and focusing on high-value activities.

Navigating Challenges: Data Security and Regulatory Hurdles

While Proptech's potential is immense, it faces challenges like data security and legal barriers. Collaborative efforts between the government, industry, and technology experts are crucial for developing solutions that address these challenges and pave the way for Proptech's seamless integration into the real estate sector.

A Friendly Proposition: Enhancing Tax Rebate on Home Loan Interest

The proposal to increase the tax rebate on home loan interest complements Proptech's rise by potentially stimulating demand. Coupled with Proptech solutions that enhance buying experiences and streamline transactions, this policy could provide a further boost to the real estate sector.

Conclusion

The real estate sector is at a pivotal point, with the upcoming budget offering a strategic opportunity to reinforce its growth. Integrating Proptech is essential for the industry's evolution, aligning with government initiatives and market demands. The future of real estate in India will be shaped by a combination of technological integration and thoughtful policy reforms.

Views are personal. The author is Group CEO, Housing.com, Proptiger.com and Makaan.com