In any given debate about the low public perception of the real estate sector in general and the developers in particular, the defence has always been that real estate is a one-time purchase product and hence the focus of the builders is on the product and its sales channel than the brand.
It has been reiterated within the built environment of Indian real estate that once the buyer has bought his dream home he is least bothered about the brand index of the developer or the reputation of the sector at large.
Track2Realty Public Perception Survey, however, proves these assumptions wrong. More than half of Indians, as many as 54%, track the real estate news, analysis and launches even after they have purchase their house. Even more in number, 58%, monitor real estate sector and developers’ performance along with reputation for future investment purposes.
These are the findings of Track2Realty pan-India survey. The survey was aimed at understanding the awareness level of the Indians with real estate as a sector, product and business with critical linkages to its reputation and brand trust. The survey has been conducted for the fifth consecutive year in 20 cities – Delhi, Noida, Gurgaon, Ghaziabad, Faridabad, Mumbai, Kolkata, Bangalore, Hyderabad, Kochi, Ahmedabad, Chennai, Jaipur, Lucknow, Bhopal, Patna, Bhuvneshwar, Coimbatore, Pune and Chandigarh – between March 15 and April 07.
A structured set of questions that was based on the homebuyers’ top of mind recall and understanding leading to their investment decision post the purchase of first house was given to the respondents. They belonged to a mix of the luxury, mid-segment and affordable buyers. The survey tried to capture the mind of the homebuyers who are often seen as one-time buyer and hence not as serious & repeat TG as in other industries.
“I read real estate news and keep a tab on new launches. I also watch television programmes on real estate. In a way I feel property related information is not confined to buying a house but it is also an investment avenue for future. No other asset class can give this kind of return,” maintains Sumit Gupta in Noida.
“Of course, I have bought my first house and have no plans to make another investment as of now. But then property information is not confined to buying a house alone. In a short supplied market like India, real estate sector has to grow phenomenally and realty stocks are really something to watch out. That demands a thorough knowledge about the real estate sector and the developers’ reputation,” shares a Gurgaon resident, Ankit Chawla
“Investment instruments like REITs and InvITs clearly suggest that we have to move ahead of the mindset of real estate as a one-time investment. And I feel more than the homebuyers the developers need to be conscious of this reality. The sooner they understand this and change their brand positioning from product to service the better it will be for all the stakeholders,” opines VK Sudarshan in Bangalore.
It is hence not surprising that the stock performance of branded and reputed developers have in recent times outperformed the sectoral indices and even the overall performance of Sensex and Nifty.
82% of those who invest in the stocks of real estate companies are pretty clear that they will only invest in the stocks of the developers who are known for the corporate governance, even when some other realty stocks are tempting in the short term.
Which are the realty stocks where the Indians feel safe to put in their money. The top 5 picks are Godrej Properties, Oberoi Realty, Sobha Ltd, Mahindra Lifespace and Brigade Enterprises.
On a scale of 0-100 the study tried to figure out the AQ (Awareness Quotient) of the Indians. This comes as a real surprise that the AQ of Indians stands at a healthy, rather impressive, level of 712. The KQ (Knowledge Quotient) of the sector has also been quite high at 560 on the scale of 0-1000.
Even more in number, 84% of the homebuyers feel this is the primary source of information and once they are convinced about a project or developer through online searches then only they go for secondary reference check.
“Physical search or verification is always step two for me once I have shortlisted a few properties. The stepping stone is their online reputation that nowadays clearly indicates what kind of a builder one is, what is the standing in the given market and among the buyers and what are the future prospects of the property or the stocks,” feels Sameer Sabharwal in Mumbai.
For nearly half the respondents, 46%, real estate news is nowadays as much area of interest as the political or sports news. In terms of their interest level with the business & economy, real estate news is third after stocks and corporate news.
Do these buyers trust real estate news? Not really! Nearly everyone, as many as 90%, feel real estate news is more like marketing brochure of the developers. 84% point out that real estate supplements of daily newspapers are not trustworthy as they often fail to differentiate between editorial and advertorial.
“How can real estate news be credible when the news in any other sector is not so reliable nowadays? With the kind of money that these builders have they can manipulate the news as per their convenience. Yes, financial reports etc where there is a watchdog in SEBI are accurate but definitely not the analysis or positive review,” believes Rishabh Jain in Kolkata.
In the perception of homebuyers how can developers scale up their reputation? 74% feel it is after-possession experience that would make them rely the same developer again. Will they go for word of mouth if their friends and family are happy with the builder? 70% says yes.
Can consumer connect and referral programmes of developers enhance the homebuyers’ AQ and KQ? 82% of the homebuyers feel he developers can make them repeat customer, whether through self buying, referring to others, or investing in their stocks, if only they take up consumer connect programme more seriously.
In this survey there is something really worth introspection for the developers. The study has indeed challenged their conviction that house is a one-time purchase product and hence focus on the product and the sales. Moving forward, only the paradigm shift in the mindset would differentiate between the reputed brands with healthier balance sheets and the brands that would wonder what went wrong with their sales strategy.