What is Prop Tech, and what makes it a sector to watch out for in the Indian landscape?
With increasing urbanisation and digitisation in every sphere of life and industry, technology today is the central driving force in improving overall well-being and driving key economic metrics in India. This rapid adoption of technology has also opened new vistas with promising potential for disrupting traditional industries. The Indian Real Estate sector is one such sector which is primed for technological disruptions and digital transformations, further catalysed by an increase in disposable incomes in the recent years.
Proptech, or property technology, is this intersection of the real estate industry with technology, software and digital solutions aimed at maximising the sale-purchase, research, marketing, and management of properties. Proptech is a new but a promising sector in the Indian real estate market as ultimately, cross-industry technologies will transform how we engage with and tap into the country’s real estate market. Innovations and disruptions in the real estate sector and the construction industry are also expected to play a valuable part in India’s ambitious target of reaching a $ 5 trillion economy by . The sector can further be divided into Residential and Commercial Real Estate and constitutes technological unification with sustainability, finance, sales, and construction.
As internet penetration and digitisation become ubiquitous in emerging (Tier-II and Tier-III) cities, Proptech and these sub-sectors show immense potential in unlocking real estate potential in rural and urban areas and driving holistic localised growth. For India, Prop Tech startups account for over 6 per cent of the total recognised startups. On the world stage (for this sector), the country ranks fourth in terms of total funding raised, approximately $ 89.1 Million across sixty-six rounds. 99acres, Magicbricks, and Nobroker are few of the most prominent names in this industry where buyers, sellers and agents can collaborate and exchange information about real estate with the touch of a button.
A few emerging trends responsible for the sector’s expected leap are rapid increase in co-working and co-living spaces, prominence of social media, advancements in block chain, machine learning, and AI (Artificial Intelligence), and disruptions in construction methods and materials. Currently, the Real Estate sector contributes 6-7 per cent to the country’s GDP. According to the Indian Brand Equity Foundation (IBEF), the sector can exceed $ 1 trillion in value by 2030, and by 2025, it can potentially contribute approximately 13 per cent to India's GDP (Gross Domestic Product).
Multiple MOHUA (Ministry of Housing and Urban Affairs) schemes and missions have also been directed to propel sector-focussed growth and give impetus to the Make in India initiative. Pradhan Mantri Awas Yojana – Urban (PMAY-U) was launched to address the urban housing shortage among the Economically Weaker Section (EWS)/Lower Income Group (LIG) and Middle-Income Group (MIG) categories including the slum dwellers. To facilitate adoption and promotion of modern, green, and disaster-resilient technologies, a Housing Technology Sub-Mission (TSM) was launched under this scheme in 2021. The program also organised an Indian Housing Technology Mela (IHTM) to showcase indigenous and innovative building and construction material and facilitated the establishment of five incubators to support potential future technologies within the Indian Real Estate market.
With a capability to drive promising FDIs (Foreign Direct Investment), crowdfunding, institutional investments and much more, the Proptech sector is the next important thing to watch out – especially for the Indian market. Thanks to its high dependency on technology, the sector witnessed a noteworthy recovery post COVID-19 and is growing rapidly in conjunction with Digital India, Government of India’s flagship initiative to transform the nation into a digitally empowered economy. However, to unlock its best potential, the sector calls for a need assessment into the evolution and journey so far and requires key stakeholders to deep dive into its far-reaching impact on the economy.
Originally published on startupindia.gov.in https://www.startupindia.gov.in/content/sih/en/bloglist/blogs/Prop-Tech.html