Online property sites sizzle as top choice of home seekers

Want a house on rent? Visit an online property site which would help you rent a property without any middleman.

According to experts tracking the realty sector, sites such as Magicbricks.com, 99acres.com and makaan.com are fast-becoming the choice of consumers looking for renting a property, as such sites let them directly connect with the owner and save time and money.

Besides rentals, these sites also offer primary sales (new apartments -- under construction or ready to move in) and secondary sales of properties.

Though the share of online property sites in the overall property business in the country is still a miniscule one per cent, analysts expect this segment to grow to 15-20 per cent in a few years.

Advertisements in the realty sector, including the ads by such property portals, went up 14 per cent in print media and three per cent in the TV space in 2012, compared to 2011, according to data by TAM.

These portals are also 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 the property price range varies from Rs 50 lakh to Rs 1 crore.

“Digital media is increasingly being used for fact-finding and initial level of research.

"But since buying a property is a high-value decision for many, it will take time, may be another five years, before we see a huge number of transactions happening through the online medium,” said Sanjay Dutt, executive managing director-South Asia, Cushman and Wakefield, a real estate consultancy.

He said portals such as Magicbricks and 99acres received tremendous hits, but maximum were for renting properties.

It is definitely a fast-emerging channel of sales and is expected to grow 15-20

per cent every year, Dutt added.

Harinder Singh, managing director, Realistic Realtors, said the online property segment had great potential and would grow very fast in the coming times.

“There is a huge scope for this business model. It makes decision-making faster.

"In the next three-five years, the government is expected to come out with a set of regulations.

"And if everything goes well, this miniscule share of one per cent can increase to 15-20 per cent.”

The portals are mainly driven by revenues through advertisements, commissions from developers or brokers and funding from private equity funds.

Initially, when such online portals had started, there was very limited information available and customers were not comfortable in taking decisions on that basis, said Manish Mehta, vice-president of property brokerage IndiaHomes.

“However, now we have quality information, with latest updates / launches, more and more people are researching through these tools.

"The chances for closure of deals through online will increase with time,” he added.

However, there are many challenges that need to be overcome before such sites establish a strong foothold in this industry.

According to experts, the main challenge is buying the consumer’s confidence and the need to have more localised information, which is currently given by brokers operating in that area.

These sites offer services only in select cities now.

Secondly, the system needs to be more organised.

The lack of benchmarking in such sites is another problem. Moreover, enquiries by potential customers are answered by telemarketing people, not real estate professionals, who can only give limited information to people, an expert tracking the sector, said.