Real Estate in India: A Present-Day Scenario
Real estate sector in India will contribute to 13 percent of the country’s GDP by 2025 and is expected to reach USD 1 trillion by 2030. For an industry with an enormous contribution, it has its fair share of challenges in India. Real estate developers are worst hit for several reasons, including:
- Oversupply of residential properties
- Sliding prices
- High levels of unsold inventory
- Significant cost overruns
- Lack of transparency
- Delayed deliveries
- Stagnant absorption rates
Developers with a cash-crunch are either closing shops or borrowing money at high interest to keep their businesses running. Whereas developers with large holding capacity are following the ‘watchful waiting’ approach since the customer is focused on execution and deliveries and not buying.
In both cases, investors are losing money and developers are hurting their brand.
The introduction of ‘Real Estate (Regulation and Development) Act’ is a welcome change that is likely to increase transparency, process adherence, and customer centricity. It has created a hope for better and more systematic way of dealing with the real estate transactions. However, RERA is not enough since it does not address challenges outside of its ecosystem.
The present-day real estate sector is experiencing a confluence of different challenges like change in customer’s expectations, rise in distinct business models, complex approval processes, delayed deliveries and cost overruns. Hence, there is an increased need for an evolved ecosystem to stay relevant and meet these challenges.
Digital Transformation: An Introduction
Digital transformation is in full swing and industries across segments are gearing up to ride the digital highway. Changing core processes and shifting from an industrial past to a full-swing digital future is on a roll.
Even though the real estate industry is no different and can highly benefit from a digital transformation – it does lag in adoption, and the laggards revolve around the lack of a common framework (process) across developers.
The digital ecosystem is capable of streamlining various processes in the industry and ultimately provide more value to the developers.
Scope for Real Estate Developers
Whether it is a commercial, residential or smart city project – integration of technology-enabled platforms across internal and external processes is destined to bring a positive outcome for the developers.
The scope of digital integration lies right from the start and through the entire life cycle of a real estate project. Digital integration will help in fulfilling the following key factors:
- Increase Operational Efficiency
- Improve Customer Experience
- Boost Sales
- Introduce Transparency
- Risk Reduction
- Improve Quality
- Time and Cost Savings in Planning, Construction, Operations and Exit
Digital Roadmap: The Milestones For Real Estate Developers
Digitalization is picking up speed in the real estate sector. Developers can embrace digital transformation around the following and ensure long-term success.
- Adoption of an ERP to automate the Construction Project Life-cycle
Real estate developers face many challenges during the entire life cycle of a project. Reporting discrepancies, pilferage and dependency on paper trail leads to financial loss.
A vertical ERP for the real estate business should help resolve some of the most intractable problems for the sector. We at BuildSupply have an end-to-end ERP software that is rooted in easing out the development process. It manages the entire process workflow of a real estate project from inception to handover. With this integrated software, automated cost plans, smart BOQs, e-tendering and procurement, invoicing and progress updates, material and store management and much more can be done right from a single dashboard.
The first digital pit-stop for any real estate developer starts with superior construction process management, and a specialized ERP is fully equipped to meet all the requirement of the real estate and construction sector. With an ERP platform, real estate developers can:
- Precisely budget for the project
- Monitor that budget at granular level on an ongoing basis
- Control and reduce execution costs
- Monitor time and cost in an integrated way
- Promote collaborative working
- Avoid duplication
- Eliminate redundancy
- Accelerate positive decision-making
- Get a 360-degree view of an ongoing project
- Data Analytics for Transformational Insights
In the new age of highly efficient and cost-effective cloud storage veery industry is generating and collecting data at a massive scale. Real estate is no different. Data is one of the most significant factors that aid decision making in the digital ecosystem. Real estate developers can find game-changing insights through data analytics for their business and establish parametric goals accordingly.
Various artificial intelligence algorithms are also embedded in ERP software that can provide key performance indicators like earned value analysis, cost variance, schedule variance, cash flow and much more.
- Internet of Things (IoT) for Smart Buildings and Cities
Internet of Things (IoT) is already bringing disruption across different industries. However, in the real estate sector, it makes more sense to deploy IoT based connected smart devices. The advent of the smart city concept to the first smart city is based on digitalization. IoT forms as a base of smart cities and enables a host of automation features while cutting out on operational expenses.
With IoT, real estate developers can use data to provide proactive maintenance, utility, and energy optimizations strategies and push towards a predictable future.
The digital realm brings out artificial intelligence, augmented reality, cloud computing and Internet of Things to facilitate the idea of smart cities. Real estate can be one of the primary beneficiaries of this and drive asset flexibility. Real estate will always be about “location, location, location” but the ‘digitization’ of buildings will significantly enhance values and be a crucial enabler for success.
The Future is Here
The real estate sector is poised for disruption through technology. This has already impacted all the major real estate verticals like residential, commercial, hospitality and industrial. With rapid progress in the development and innovation of the industry, it is critical for real estate developers to understand and align with the broader ‘technology-enabled real estate ecosystem.’
Developers and other stakeholders will need to adopt, leverage and capitalize on data sources, tools and technologies to eliminate the current challenges. The digital future of the real estate industry looks promising and will necessarily make the entire journey of a project economically efficient and leaner.
So, the question is no longer whether real estate developers will accept the changing dynamics, but rather how long it will take for the market as a whole to be permeated by technology.