According to HDFC Chairman Deepak Parekh, despite the Covid-19 pandemic, a sudden surge in housing sales is the result of a structural demand and not pent-up demand. As such the demand will stay for longer. Mr Parekh was speaking at One World One Realty Global PropTech Summit 2021.
Parekh said the growth in home loans has been aided by low interest rates, softer or stable property prices and continued fiscal benefits on home loans. At the same time, technology has enabled developers to virtually showcase their properties and home loan providers have leveraged digital platforms to continue to serve new and existing customers.
Parekh said that demand for housing sector is coming from first-time home buyers, customers moving up the property ladder by shifting to larger homes or acquiring a second home in another location and with the work from home option.
The proximity to one’s workplace is perhaps less compelling, so there are wider options in terms of locations when buying a home.
Parekh said India’s latest Budget too bets big on growth. India sees the benefits of a construction led recovery, which is why the infrastructure outlay in the Budget is at an all-time high. So clearly, construction and real estate development are going to play a key role in all major global economies.
Highlighting the role of technology, Parekh said that innovation is becoming extremely important. India has been at the forefront of not only adopting technology but also has a large talent pool as far as IT and entrepreneurship is concerned.
“There is so much talk about fin-tech, health-tech, edu-tech, reg-tech but property technology or prop-tech is still in its infancy. The construction industry is one of the least digitalised sectors in the world. It is estimated that the real estate sector spends less than 1.5 per cent of its revenue on tech.”
Capitalising on technology for the real estate sector will improve governance, said Parekh. One would tend to agree that availability of real time data on real estate is hardly ever available. Progress of projects can be monitored through digital dashboards with data driving key decisions.
“Funding for projects based on achieving construction milestones can be better monitored online. This will bring in the much needed transparency and accountability and improve cost efficiencies in the sector.”
New-age technologies being developed like drones, 3D printing, robotics, augmented and virtual reality — all have immense applications across real estate business platforms, said Parekh. “We will continue to explore prop-tech investment opportunities that have close synergies with affordable housing.”