That Internet has quickly grabbed a huge amount of business space online has been quite clear for long and a Google India study shows how strong Net's presence has grown in the real estate sector.
The Google India study, conducted on basis of a pan India offline research conducted by Zinnov and real estate related search query trends on Google, seeks to shed light on the influence of Internet on real estate purchase decisions in India.
The study revealed that over fifty percent of real estate buyers' decisions are influenced by Internet research. Not just that, the phenomenon of researching online for real estate information was not limited to metros but also extended to buyers in tier two cities.
The study revealed, that the overall influence of Internet today on real estate transaction value of both residential and commercial property including rentals amounted to $43 billion, with $31 billion for residential and $12 billion for commercial properties.
The offline survey conducted across 15 cities in India with over 6,000 respondents revealed that 74% of real estate research online was focused on residential buying and 26% focused on residential renting. Among these, almost half the respondents were indifferent to new or resale property (47%) as the criteria for research focused more on their space requirement, budget and location. 23% respondents were in the market for resale property only, and 30% were looking for new property under construction.
In the survey, respondents rated Internet in the top three mediums for information for real estate research, with 24 percent respondents rating Internet as the top destination for information. Print media and sales-broker offices were the rated as the other top two information sources for property information.
Nitin Bawankule, Industry Director, Google India, said “Real estate queries on Google search have been growing consistently, registering over 3x growth in the last three years, the rate of query growth is even higher for tier 2 cities and growing at over 350%. Our search query data shows that over 53% search queries are done with clear purchase intent.”
Amongst the top destinations on the Internet for real estate information, aggregator sites (62%) were rated as the top source for information, followed by builder and developers sites (52%). Online broker sites and real estate blogs and forums (~45%) were also rated as popularly used destinations for information.
Ease of comparison, large variety of options, easy access to detailed information about the property, market trends, financing options and contact details of the property owners were rated as the top reasons for using Internet for real estate research.
The report also revealed that buyers, who contribute to over 90% of total real estate transactions in the country, have an annual household income over 5 lakhs; a majority of which were already using the Internet today.
“It is estimated that the real estate will grow to become a $140 billion industry by 2017 and the Internet audience base is expected to reach over 450 million by then,” Bawankule added.
In tier 1 cities over 57% buyers were influenced by online research and in tier 2 cities the impact was equally high with 48% buyers saying that they used Internet to research for real estate purchase decisions.
The usage of mobile phones for accessing real estate information online was also significant with over 55% buyers using it to access information. This finding was consistent with Google search, with mobile contributing to over 40% real estate queries. Moreover, mobile apps were preferred over websites by buyers with 73% respondents saying they prefer to use mobile apps.
Amongst the wishlist, respondents highlighted the need for accurate and updated information with details of locality and amenities online. Respondents also highlighted the low availability of information for commercial property information online. While they appreciated the availability of contact details of owners, respondents also highlighted the problems of brokers pretending to be owners and asked for sites to run more detailed checks on listings. Offering online chats, quick turnaround to online queries and providing counselling by experts were also listed as improvements respondents would like to see from real estate players on the Internet.
As per search trends, (Google search queries data for 2013):
The highest number of real estate queries in tier 2 cities come from:
* Pune, followed by Lucknow, Jaipur, Indore, Chandigarh, Coimbatore, Nagpur, Kanpur, Surat and Ahmedabad.
* Amongst the top metros - NCR followed by Mumbai, Bangalore, Hyderabad, Kolkata, Chennai
Methodology for the Study:
Combination of insights from the offline survey conducted by Zinnov on behalf of Google and Google search trends for Real estate queries from 2010 till May 2014.
Offline face to face survey conducted by Zinnov across top 15 cities in India with respondents who were in the market for real estate needs (Buying/Renting). Sample size 6196: Top 8 metros: 3267, Top 8 tier 2 cities: 2929
* Male: 5177, Female: 1006
* Age group: 25 to 60 years = 6099
* Age group: 60+ years = 96
* Residential Buying: 2580
* Residential Renting: 2413
* Commercial renting: 1200