Does anybody buy property during a national lockdown? The answer may shock you. Despite the coronavirus-induced nationwide lockdown and all on-ground activity halted since March 25, the Anarock Group says it has successfully closed the digital sale of 240 homes worth Rs 214.6 crore and 62 office spaces collectively worth Rs 37 crore. The first 10 days of the lockdown were a struggle to align sales, but then we quickly took up the slack and homed in on the emerging opportunity, says Anuj Puri, chairman, Anarock Property Consultants. Many of these sales were in the final leg of the deal and others were open, but were all closed virtually. In this week’s Finapolis Conversation, Kumar Shankar Roy speaks with Puri, who has over 30 years of experience in Indian and global real estate markets, about the trend of digital property sales, customer trends and much more. Anarock, set up in 2017, is now the largest independent residential agency in India. Prior to his current role, Anuj was Chairman and Country Head of JLL, India and a key member of the Asia-Pacific Leadership Group and Head of the Global Retail Leasing Board.
During a national lockdown period, one would think people would conserve money and not make investments. So, it was rather surprising that ANAROCK Group sold properties over Rs 250 crore in this phase. How did this happen?
There are several factors involved. One, of course, is more people have realized the importance of a self-owned home in this period. Most of the buyers had already made purchase decisions and had put aside funds for it. Also, fence-sitters whose jobs are not endangered came off the fence. It must be noted that most of these homes were in the mid-range category. Affordable home buyers, who are most price sensitive, did not feature. Finally, the appeal of a physical asset in times of turbulence in the stock markets has been brought home for investors.
You said many of the deals were closed 100% virtually with no site-visits whatsoever; 5-6 virtual tours/ day for interested buyers. Is this the new trend? How do you do away with site visits, but still convince buyers?
Most of these buyers had already visited the respective sites before the lockdown. However, more notably, some were also completely convinced by virtual tours and 3D walkthroughs. Again, most of them had already made firm purchase decisions. Now, with site visits out of the question, probably even long after the lockdown, purchase decisions have crystallized. It also seems evident that there was a lot of word-to-mouth referring going on, and here it certainly helps that we only sell projects by reputed builders.
What kind of discounts are being offered to sell a home? Are digital sales cheaper than offline?
We always negotiate discounts of between 5-10 per cent over the market price for its buyers. This is irrespective of the coronavirus lockdown.
No, digital sales are not necessarily cheaper than otherwise. Developers, especially the more reputed and financially stronger ones, are not in ‘distress sale’ mode and many can afford to hold on to their inventory for a longer time.
Tell us about the digital sale process about homes. What are the different steps involved from buyer-seller perspective and is the process truly all online?
Anarock’s proprietary one-stop technology platform IDSS (Integrated Digital Sales Solution) virtually integrates all property sales operations from discovery to engagement and transaction. Baked into the Firm’s CRM system, IDSS connects customers, developers and brokers, and delivers real-time inventory updates and apartment selection, 3-D renders, virtual tours, e-brochures, product videos, video conferencing with the sales team, documentation and developer’s details. It also lists out offers such as reduced booking amount, price protection and flexible inventory.
This technology, which culminates in deal closures via an integrated payment gateway, has been a game-changer in the current lockdown conditions.
Globally, how prevalent are digital property sales? And, where does India stand today?
There is no special qualification for a project to be ready for digital sale. Like all other projects these days, it must have a RERA registration and all relevant documentation needs to be available. Much more depends on how the developer sells it, if he has digital capabilities or has roped in a consultancy which provides the digital enablement, the project can be marketed online.
What about customer data privacy norms for digital sales? Usually, bank grade security is considered the hallmark for data security. Are digital sales platforms adhering to such standards?
Payment gateways used for such transactions must be fully secured.
When the lockdown situation eventually ends, do you feel customers will again go back to offline sale methods? We say this because during demonetization we had seen surge in online payments, which later normalized once cash payments became the norm...
Customers will always prefer site visits, the question is whether and to what extent they will happen in the foreseeable future. Developers will be as wary of site visits as customers and agents. The site visit format will definitely need to be reinvented to include social distancing and sanitation norms. Thankfully, the industry is now reinventing itself to align with digital sales, which already works quite well in more developed countries.
From the regulatory point of view and to control black money deals, what are the steps that the government should take so that property sales can be largely done in digital mode only? Please share your suggestions.
The government needs to ensure that the provisions it has already put in place for the elimination of black money deals are adhered to in the case of digital sales. It is fairly certain that it will do so – the current government has proved to be extremely savvy and forward-looking when it comes to plugging loopholes, including digital ones.