The Growth Of Real Estate Market Research In India
The Indian real estate market is not very transparent. The Indian real estate market is extremely fragmented, and the public does not have much access to information and data that they do need.
The real estate industry also does not have “industry status”. So, markets are very locally oriented, and not as interdependent as they ought to be. This is why Indian real estate markets are very heterogeneous.
However, it is important to study real estate markets and make sense of how consumers, investors, developers and corporate occupiers fit into the overall framework. International property consultants (IPCs) help a lot in understanding the system in depth and detail.
Real estate developers and other stakeholders do well when they adapt to domestic market conditions, while staying attuned to global trends.
While buying, selling and developing property, market research is very important. A consultant who really understands the market can help a lot in taking the right decision. Users and developers alike benefit from the research of property consultants.
The Indian government is also using modern technologies like Geographic Information System (GIS) to recover property taxes and understand real estate markets better. Market research consultants collect and analyze information related to various aspects of property markets. Over years, property consultancy firms are likely to develop a good database that will help them forecast trends more accurately. Consultants will be able to understand market trends across different real estate asset classes more accurately.
The growth of real estate market research in India
Till 2005, there was not much data on Indian real estate markets, and developers used to rely on their own judgment. As the markets were not well developed, they did not have much of an option, and this approach was working fine. But after 2005, foreign investment in the sector rose, and more international players entered the market. The expertise they brought in changed the face of Indian real estate markets. Developers can no longer rely on their gut feeling alone. It is risky to go by gut feeling in a more sophisticated market.
Developers slowly started employing market research consultants. They also commission market studies to take decisions that are more informed. As far as Indian real estate markets are concerned, these are very recent developments. The market research of international property consultants (IPCs) in India are comparable to that of their counterparts elsewhere.
The growing significance of consultants
Indian real estate developers and other firms no longer underestimate the importance of expert market research. Private equity (PE) funds have always preferred to get a second opinion from real estate consultants on their entry/exit strategies. PE firms continue to rely on their advice, even after they have taken such key decisions.
Foreign institutional investors (FIIs) and PE funds made international property consultants (IPCs) an important part of the real estate industry, in India and in other parts of the world. It is PE firms and FIIs that made developers see how IPCs have changed the way real estate industry operates. The growth of these funds has played an important role in the process.
What is the future of real estate market research?
In the near future, because of the development of real estate markets, the research industry will grow too. Currently, IPCs are playing two important roles. IPCs manage data and provide important data to their customers. IPCs also make expert advisory facilities available.
In the future, when the real estate sector becomes more transparent, and when technology becomes more integrated, the importance of data will lessen. The advisory role of IPCs, however, will start playing a more dominant role.
We live in an age of specialisation. We will see the importance of specialisation and data analytics in the real estate sector too. This has already happened to a much larger extent in developed markets.