Madhumita Mondal, a resident of Mumbai made a decision to buy an apartment online. A strange but appealing feeling that save time and also offers mouthwatering discount compared to tradition offline purchase. Mondal spent $ 159,000 (10.1 million rupees) on a 3 bedroom apartment located in Mumbai suburbs. According to Mondal, normally she purchases books and dresses on Snapdeal.com, but when she saw the apartment advertised with good discount, she decided to give it a try to save time and money. A decision that changed her online experience.
‘Rather than having to go through property agencies off-line, this experience is much better,’ Mondal commented.
While it seems difficult to spend hundreds of thousands of rupees online, many Indians are happy about it. Property is being sold online and huge internet sales realized. Developers are getting an easy time disposing off the excess supply while consumers find it easy to buy houses with good discounts. Over the past few weeks, both Mantri Developers Ltd and Tata Housing Development Co made sales of $ 1 million each on Snapdeal. In the past one year, Snapdeal, Housing.com and 99acres.com are sites that have been making property sales online. More than 1500 apartments of sales online are reported by Tata Housing. The online platforms promise lower prices. In an advert placed on their website, Snapdeal promises low prices, ‘obtain unbelievable discounts’ the advertisement reads.
Cost Conscious
The managing director and chairman of Mumbai-based developer Rustomjee Group had this to say, ‘Indians are very conscious on cost. They believe that online platforms and mass buying are cheap methods of buying anything.’ More than 30 apartments have been sold online by Rustomjee Group through a brokerage site where buyers are directed to Rustomjee to make the sale complete. ‘We observe traditions on most things while in India, we embrace technology and what it has to offer. I see a lot of potential in the manner in which the internet can make changes in sale of apartments.’
For a new construction, the sites for online sales work in the same manner as an offline showroom belonging to a developer. Instead of going in person to view the photos and proposed models, the potential customer only has to make a few clicks. He/she is able to view the neighborhood and see how the building and units look like. He also gets an opportunity to see the reviews and ratings from other buyers. Also available is a walk-through of the three dimension furnished apartment.
Big Discounts
A good example of a typical discount is an apartment worth 6.5 million rupee which was built in Bengaluru by Ardente Realtors. The mortgage interest payment of 800,000 rupees (12 % purchase price) was being slashed off on this apartment if the purchase is made through Housing.com.
When a down payment of $ 1,600 is made by the customer on the ecommerce platform, the buyer is contacted by the developer in order to assist mortgage financing arrangements through the bank if need be. The option of paying the balance through online banking is also available.
‘Unlike offline real estate brokers, online commissions for sellers are lower,’ said Rustomjee Irani. He didn’t give further details. Snapdeal also failed to give more information on commissions. In some markets, developers are using the site so that they can offload excess supply in the markets. In the first quarter of the year, there was a total of 192.3 million square feet of unsold homes. This was expected to take 3 years and 10 months for them to be sold at the prevailing pace in Mumbai. This is according to a research and real estate consulting firm, Liases Foras Real Estate Rating & Research Pvt. There is 8-12 months inventory required to be maintained for a healthy market.
