Tag Archives: Artificial appreciation in real estate

Way ahead for digital transformation in Indian real estate

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View Point: Aditya Kedia, Managing Director, Transcon Developers writes how Artificial Intelligence and Machine Learning is transforming the Indian real estate. 

Aditya Kedia, Managing Director - Transcon Developers, Mumbai property developer, India real estate news, Indian realty news, Real estate news India, Indian property market news, Investment in Indian property market, Track2Realty, Yearly analysis of real estateArtificial intelligence (AI) and machine learning are reforming technology all around the globe. Both are essential in determining most of the approaching novelties in every possible field.

AI, in layman terms, makes machines execute compound tasks, related to human minds, in a smart method. Machine learning makes computers (machine) scrutinise and solve problems by teaching it basic logic and making the machine intellectual enough to learn on its own, as it advances to solve diverse variations of the problem.

When it comes to assimilating AI, the Indian property industry is not far behind. From the way property seekers scout for property to offering probable buyers with applicable information to investigating property values – all the phases of property procurement are now powered by AI and machine learning. 

Gone are the days when the Indian real estate industry had managed to comparatively stay concealed from multitude of the tech advancements and innovations that have majorly altered and renovated other industries.

In recent times, the Indian realty players have countersigned the revolutionary effects of the cloud, VR (virtual reality), the Internet of Things, Machine Learning and AI (artificial intelligence). Currently there have been indications that more realtors and real estate companies in India are positively retorting to their customers’ need for transformation, albeit subtly, particularly within the domains of AI.

In the Indian property sector, AI has the vast scope and ability to lessen operative expenses, augment and advance customer service, recover competence and condense resource depletion within the industry.

Indian realty investing, like so many other industries, is currently in a state of reformation thanks to its large part of technological novelty. One of the most potent and radical ground-breaking technologies all set to transform the investing in the property markets in current times is artificial intelligence.

Below mentioned are ways by which AI is modifying the real estate sphere for the better.

Chatbots —One of the most understandable ways artificial intelligence is renovating the over-all real estate industry is through chatbots. A multitude of Indian realty companies from brokerages to real estate crowdfunding podiums have started integrating chatbots into their websites.

These digital marvels let companies to save on the cost pertaining to customer service and also facilitate in optimizing time intervals spent on responding to questions by allowing a computer-generated assistant to reply to common queries that don’t modify from customer to customer.

Investor Analytics — Property investors can set revenue and growth goals and have them checked by an intellectual robot, who can evaluate risks based on investor parameters and make all the necessary modifications to benefit the investor to meet their monetary goals more competently.

Forecasting Loan Defaults — Platforms pertaining to real estate crowdfunding can make use of artificial intelligence to forecast loan defaults, which upsurges investor profits. By envisaging defaults, the process of risk valuation is well-organized and podiums can pay emphasis on profitable investments while reducing non-profitable ones.

Deal Matching — Buyers investing in real estate can set their criteria of investment and can be informed when a deal matches their benchmarks. For example, if an investor is keen on investing in only in a first lien position on commercial properties earning at least ten percent returns, they can set those standards on their investor dashboard and acquire a list of properties that match those principles which will also be exclusive of properties that do not fall within their preferred investment constraints.

Construction Automation — Builders and property developers want to improve their outlays and surge their returns. In current times novel crop of tools are being developed to aid builders systematise the process of material acquiring that permit them to obtain quality materials at the best price from the finest suppliers in the market.

By allowing the robots to handle the acquisition of materials, construction companies can cut down on expenditures and upturn profits by utilizing artificial intelligence as the chief technological driver.

Property Management — Artificial Intelligence can be applied in property management to observe and envisage when the systems of critical maintenance are ready for replacement. The technology is also valuable to keep a tab on rental trends in particular geographical zones and increase tenant rents automatically when leases terminate. Other details of property management such as building automation and growth analysis can be achieved by property management companies to regulate probable returns on the basis of critical inputs that influence rents, expenditures and proceeds in rental housing.

Intelligent Search Platforms -Search engines have always been an imperative tool for linking agents of real estate with the potential buyers and investors. To aid in streamlining and improving the online experience for operators, major search engines have started making use of AI to support users get much more information even from a very basic property search.

Conventionally, investors, brokers, property buyers and sellers were often limited to a minority of search criteria such as the value and property location. Now, with the help of AI, searches have become more refined with numerous information layers being made accessible for detailed properties. Users are now able to obtain details specific to ROI, good neighbourhoods and other apparently tiny property details prior to buying.

Artificial intelligence, and its close relative machine learning, are now being used more often in all facets of real estate, but its usage in real estate investing lets private investors encompassing builders and property manager’s operative ways to regulate costs, rise in returns and cope up with risk making use of mechanical systems based on the concerns of individual investor.

Beware! Your property’s price appreciation may not be real

Posted on by Track2Realty
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Bottom Line: The practice of under-writing has created a peculiar scenario in many real estate markets, where there is an increase in capital values of property, despite a dearth of buyers in the resale market 

india realty news, india real estate news, real estate news india, realty news india, india property news, property news india, india news, property news, real estate news, India Property, Delhi NCR real estate, Mumbai Real EstateSo you are happy with the price appreciation of your property? Well, so long you are living in that apartment you continue to be so; not when you want to sell it off! Reason: re-sale market offer for the same appreciated property may give you a shock. Worse even, you see the developer advertising at a price point which no one in the secondary market is ready to offer.

Appreciation in property prices may not always mean good news for homebuyers in India. There is a cartel of builder-under writer nexus backed by uge amount of black money that is behind the artificial property appreciation in the market. 

In the property market these traders of artificial appreciation are known as under writers. These brokers/financiers who operate as under writers usually under write the projects.  The deal with the developer is normally that cases, henceforth they will control the marketing strategy and the price point. A builder, thus, offloads his stock to under-writers and the under-writer sells the stock to end-users or investors.

Based on the artificial demand created, the builder keeps on increasing prices and the under-writer then sells the property at a lower value than the builder’s price. The premium charged by the under-writer, is usually paid in cash by the buyers and this leads to a circle wherein, the unaccounted income/cash component/black money is flushed into the real estate market.

These under-writers make profits through the huge difference between the price of a project at its launch, and the artificially inflated price.

Average buyers, living under the illusion of property prices appreciating, fall prey to the ‘discounted’ prices (which is much higher than the launch price), offered by the brokers/under-writers, who make money through this channel. Gullible home seekers buy, under the impression that there will be a further increase in prices, whereas, actual end-users, who have booked at the time of launch, hardly find a market to exit at that level.

No rational explanation of economics can justify how property prices keep on moving up, despite a sluggish economy and demand. Various research agencies, in recent years, have reported about the amount of unsold stock, lying with developers and how it has increased, over the last quarter or year. While this lends credence to the exprectations of prices to fall, prices of residential properties in India, move only in one direction – up.

Abhay Kumar, CMD of Grih Pravesh Buildteck rather questions that if the appreciation is artificial then why are people investing more in property as against other investment instruments. According to him, builder-under writer nexus is a reality of the past and now the market is matured enough to understand the true growth potential.

“There was a time when the market was growing at a pace which could sustain the artificial appreciation. But not any more! Today the buyer understands the market reality and his investment ROI. So, a forced appreciation is just not possible,” says Abhay.

Nikhil Hawelia, MD of the Hawelia Group, believes that one should look at the secondary market, to ascertain the true credentials of a developer. “If my project is not attracting as much a premium as others in the neighbourhood, in the secondary market, then, I may have failed in my marketing strategy,” admits Hawelia.

It is not just the secondary market that indicates the real versus artificial appreciation in the housing market today. The difference between rental yields and capital values is also an indicator that the price point in most of the property markets across India is not realistic.

By: Ravi Sinha