CHAPTER-1 INTRODUCTION

Real estate is the single largest component of wealth in our society. Because of its magnitude, it plays a key role in shaping the economic condition of individuals, families, and firms. It can substantially influence a familys ability to finance its education, health care, and other important needs. Changes in the value of real estate can dramatically affect the wealth of businesses and their capacity to grow. Real estate has been estimated to represent approximately one-half of the worlds total economic wealth.

It is important at the outset that we define the term real estate, when people think of real estate, they often think of the homes in their community or the business of buying and selling houses. This is probably because the personal investment that most households make in their home represents their primary involvement in the real estate market. Of course, real estate includes not only our homes, but also our places of work, commerce, worship, government, education, recreation, and entertainmentour physical environments, natural and built. In addition, it includes a wide range of business and institutional activities associated with the development, purchase, use, and sale of land and buildings. Real estate is property. The term property refers to anything that can be owned, or possessed. Property can be a tangible asset or an intangible asset. Tangible assets are physical things, such as automobiles, clothing, land, or buildings. Intangible assets are nonphysical and include

contractual rights (e.g., mortgage and lease agreements), financial claims (e.g., stocks and bonds), interests, patents, or trademarks.

The term real estate is used in three fundamental ways. First, its most common use is to identify the tangible assets of land and buildings. Second, it is used to denote the bundle of rights that are associated with the ownership and use of the physical assets. Finally, the term real estate may be used when referring to the industry or business activities related to the acquisition, operation, and disposition of the physical assets.

REAL ESTATE IN INDIA Indias favourable demography and strong economic impetus have made the country an attractive place for property investors. This doesnt mean, however, that investment in Indian real estate is risk free. In light of the overall economic picture and the rapid escalation in prices in real estate over the last few years, many real estate markets in India are currently undergoing a price correction. However there still exists a fundamental demand-supply imbalance and real estate remains an attractive longer-term investment prospect. Now that India is on the radar of global investors, it is important to understand the opportunities and challenges of Indian real estate investments.

India has been attracting global real estate investors primarily on account of the following: Long term demand drivers in all real estate sectors; Improve market transparency; Attractive risk- return trade-off; and Liberalized government regulations

ERNST AND YOUNG, 2005

Figure-1.1 (Indian cities by Market Tiers)

The Real Estate Market of India The Indian real estate industry is on a high growth path having a current market size of $15 billion approximately as estimated by Desai & Rane (2006). Real estate prices have risen steeply across India over the last two

years growing at 40% CAGR (compounded annual growth rate). The chart below depicts the market size which is estimated to reach $50 billion by 2010.

2009-10

2004-05

10

20

30

40

50

60

Source: Industry, India Info line Estimates

Figure 1.2:- REAL ESTATE MARKET SIZE

The market is growing at a rapid pace due to improved real estate prices and sustained demand from end users as well as investors. With a population growth of 1.7% per annum and a deficit currently of about 22 million houses as pointed out by Saunders (2007); the demand from end users will materialize consistently making the long term fundamentals of this sector strong. Traditionally, residential housing was the dominant segment of real estate development in India. This can be justified by the chart below depicting 83.3% of the overall market being held by the residential segment in 2005. However, with the emergence of commercial office space, retail and hospitality; substantial opportunities have been created in the non-residential

segments. The non- residential segment is predicted to occupy 26% of the overall market share in 2010 as compared to 16.7% held in 2005

2005
RESIDENT , 16.7

NON RESIDENT, 85

Source: FICCI (Federation of Indian Chamber of Commerce and Industry), TSMG (Tata Strategic Management Group), Industry

Figure 1.3:- INDIAN MARKET SEGMENTATION

2010

Non Residential, 26

Residential, 74

Source: FICCI (Federation of Indian Chamber of Commerce and Industry), TSMG (Tata Strategic Management Group), Industry

Figure 1.4:- INDIAN MARKET SEGMENTATION (2010)

(PACIFIC STAR, 2008, PRAMERICA 2006 AND ERNST AND YOUNG 2008)

Figure 1.5- REAL ESTATE DRIVERS IN INDIA

INTERNATIONAL REAL ESTATE MARKET International Real Estate is set to be the biggest and best investment market of the next several years. Pennington (2001) states that while the world economy has been rapidly changing in response to technological innovation, real estate has evolved from a depository of wealth for households and assets for corporations into a major force in the debt and equity markets. As land is the one scarce economic resource that is not replenish able or substitutable, real estate will continue to dominate the world as a prominent attraction for

investments and allocation to savings. Mahurkar & Senthil (2004) add that real estate is a good opportunity to employ funds for both long and short-term investments. It is safe and provides high yield investment as compared to volatile returns from the stock market and limited returns from bank deposits. Michael Smith- head of Asian real estate investment banking at Goldman Sachs states that India is the most exciting real estate market in Asia. (Fortune Magazine, 2006) This sector growth has not only improved the infrastructural face of India, but also provided employment to millions and made India a financial and retail hub. This has contributed to the organised Investment in the real estate sector by domestic and international financial institutions and has also resulted in the greater availability of financing for real estate developers. Numerous researchers have predicted the stability and importance of real estate investment in the long run. Kaiser (1997) predicts the Indian real estate market to be unaffected by a bust period for the next four decades.

(Source: - Indian real estate investment report, august 2012) Figure 1.6:- TOP 20 COUNTRIES WITH THEIR INVESTMENT VOLUMES IN REAL ESTATE.

As we can see this table clearly shows that one of the emerging market in the world, China have the highest investment in real estate sector which is almost 100 times more than Indian figures.

USE OF INTERNET IN REAL ESTATE MARKETING

Internet Marketing is the marketing of products and services using the Internet as its medium. The beauty of Internet marketing is its mass appeal. It would take enormous effort and less money to reach certain targeted audiences with specific messages delivered in a particular way. Internet marketing also encompasses digital customer data management and electronic customer
relationship management (ECRM), which are widely used in businesses today.

In todays technology driven world, more and more buyers are turning to the internet to look for an online information .No longer is the success of real estate businesses completely reliant on word-of-mouth and persuasive print advertising. Todays savvy entrepreneurs understand that in order to be truly successful in such a competitive environment it is absolutely essential to conduct comprehensive Internet marketing. Internet marketing has taken web based businesses to greater and unimaginable heights. And the same has extended into the fields of real estate internet marketing too. Real estate internet marketing is a booming business, along with all other forms of internet businesses. Now, it seems that very little cant be sold over the internet. An estimated 20 million people shop online for things as diverse as airline tickets to vacation homes.

The use of the Internet by homebuyers has increased phenomenally over the years. In a 2006 survey, the National Association of Realtors found that over 75% of buyers start their search online. With so many homes on the market today, it is now essential that these buyers see your home first. Research firms estimate that online shopping exceeded $200 billion in 2003 which will be double in the coming years. The latest study says that more than 85% of real estate transactions starting online in 2010, it is more important than ever to assure that your real estate business is getting the exposure it needs on the Internet. Real estate internet marketing has opened new avenues to all the realtors who are keen on investing in real estate and procuring a property regardless of whether it is a residential, commercial and industrial property. Every realtor has to advertise his ventures in order to make the maximum profit. And what best medium than the online platform to market the business. The importance of real estate internet marketing is that it helps you to boost your sales and acquire a position in the market, where buyers and sellers can reach you and get to know about your services. With the help of a web site you can promote the properties that you currently have as well as the services that you render. By signing up with the services of reliable real estate internet marketing websites, you can not only benefit from the exposure that it gives you, but can also participate in the real estate SEO blog by leaving valid and relevant comments which would attract quality traffic to your website. It helps

you to add your name at the place where people can easily reach you and your services as majority of people are using the internet to look for property. Internet real estate marketing importance is due to the fact that it can help you in advertising in far better ways than the older forms of advertising. Once youre visible and easily found on search engines, several of the helpful tools like press release, article writing, blogging et cetra. for real estate internet marketing will support you to develop a loyal customer for your properties. Internet marketing by email can generate more visibility and create more sales for your business. Real estate professionals can use e-mail to inform customers about sales, announce new lines of products or increase visibility within an existing base of customers. Agents and developers can create, manage and launch their Projects and properties themselves. This internet real estate marketing helps to maintain a healthy relationship with the potential customers that may be new or old with the help of an interactive site which facilitates them to sign up for new things, offering to the point information on the area and pictures which keeps them interested and bounded to the site. An ample number of researches and surveys have been conducted which prove that an increasing number of consumers are using the Internet to buy, sell and invest in real estate. By placing your home for sale on the on real estate websites, can help you be certain that your home is accessible to more than 70% of the home buyers who use the internet to search for a home.

ADVANTAGE OF USING INTERNET AS A MEDIUM IN REAL ESTATE MARKET:Most important technological innovation to impact real estate is that it improves the market efficiency By reducing information asymmetries Reducing transaction costs Reducing market entry-costs Economics

CHAPTER-2 LITERATURE REVIEW & RESEARCH DESIGN

The online real estate market is growing in size and influence. As learned from the 2007 Indian Association of Realtors report that 86% of home buyers started using the Internet as part of their research process before selecting a specific home and before contacting a real estate agent. Real estate professionals have been responding to this new reality by taking the first step -- building out their own web sites and shifting marketing dollars from offline to online. According to Borrell Associates, a combination of the slump in home sales and the increasing influence of the Internet will force a dramatic sea of change in real estate marketing strategies deployed by agents, brokers and builders. Online media is forecasted to become the number 1 ad spend medium for real estate professionals, capturing more than 30% of the total real estate ad spending by 2012.2 To help real estate professionals navigate this changing landscape, PropTiger a leading Real Estate service provider, to study online behaviour of real estate consumers. What follows are insights and strategies for working with the four distinct audience segments that have emerged.

The Real Estate Boom: A genuine Euphoria

Indian sector has seen an unprecedented boom in the last few years. This was ignited and fuelled by two main forces. First, the expanding industrial sector has created a surge in demand for office-buildings and dwellings. The industrial sector grew at the rate of 10.8 per cent in 2006-07 out of which a

growth of 11.8 per cent was seen by the manufacturing sector. Second, the liberalisation policies of government have decreased the need for permissions and licenses before taking up mega construction projects. Opening the doors to foreign investments is a further step in this direction. The government has allowed FDI in the real estate sector since 2002. FDI was deemed necessary in the view of making the sector more organised and increasing professionalism. The villages adjacent to the metro cities have experienced sky-rocketing land prices. This has induced farmers to sell their land for good money.

Future Prospects on Real Estate Industry

The real estate market in India is yet in initial stage and the scope is simply unlimited. It does not resemble a bubble that will burst. An unhindered growth for the next twenty years is almost sure. This is because the outsourcing business in India is going in great guns and this entails a huge demand for commercial buildings and urban housing besides improvement in infrastructure. The organised retail market in India is also accelerating with players like WalMart, Bharti, Reliance et cetra. looking forward to make a foray thus stepping up the demand for real estate. According to former Planning Commission Advisor Tarun Das (DEC- 2010), a price index for the housing market to track price movement must be incorporated. The government must ensure that there is no shortage of funds.

SEBI (Securities Exchange Board of India) recent harbinger of permitting real estate mutual funds in both private and public sector will go a long way in attracting funds from small investors who emphasize on certain return. Another impediment that can be eased on the discretion of government is the existing tax laws and other complex regulations relating to multidimensional Real Estates such as industrial parks and SEZs (Special Economic Zone). RITES (Real Estate Investment Trusts) of the type introduced in U.S.,U.K. and Germany should be imitated and explored.

COMMERCIALIZATION OF INVESTMENT
The liberalization of foreign direct investment norms and related initiatives may well set off a second boom in Indias real estate industry. Until recently, only a handful of banks, financial institutions (i.e. insurance companies), and high net worth individuals (HNWI) provided direct funding for the opportunistic development of real estate in India; however, this paradigm is quickly changing. Attracted by Indias booming economy and its consequences in the real estate sector predicated, a few large financial and private equity firms are now launching funds targeted at the opportunities in the sector. These initiatives suggest that the commercialization of real estate investing is already underway in India, which should help redirect capital flows on a large

scale into the country. Few institutions which are encouraging this sector by providing enough of funds to the buyers. Housing development and finance corporation (HDFC) ICICI joint ventures Infrastructure Leasing and Financial Services (ILFS) among others

STATEMENT OF THE PROBLEM:Internet is becoming a necessity in todays world. Real Estate market is growing and India is been believed to be 20th biggest market for Real Estate investment in the world with a market of 3.4 billion USD (mentioned below) Economic Times

There are millions of people who purchase homes every year in India and out of that million there are 1% NRI customers, when NRI customer invest in India, there will be a particular reason to invest and this reason is the theme of this project. In this report, we have tried to find the reason of NRI customers who are investing in India and not in other countries apart from this I will also focus on the point, where I would like to find the medium from where NRI customers get to know about the Indian Properties.

OBJECTIVES OF THE STUDY: To determine the effectiveness of ecommerce in the real estate market through examining and comparing the differences in the way a resident Indian, an NRI and a foreign customer respond on PropTiger. To find the behaviour of NRI clients

METHODOLOGY RESEARCH DESIGN:This research is limited only to NRI clients who have or are willing to invest in Indian properties so this will not include any data which shows a person staying in India or Indian citizen preferences. The questionnaire prepared were made to know the reason why NRI wants to invest in India and also it focus on the fact where it shows how a NRI client get to know about the properties in India i.e. Primary source of collecting information. To collect these data a questionnaire is been prepared which will focus on NRI clients only and based upon this factor, questionnaire is been designed which will give an image in which one can draw a picture of NRI preference in Indian market.

Sample

As discussed earlier all of our respondent who are been part of this survey are NRIs and as it was difficult to collect a good number of respondent, we only manage to get responses from 38 respondents. Out of 38, 32 respondents were interacted in an EXPO, which was held in Malaysia on May 2013. The rest 6 responses are the replies which we got in our Internet activity (mails). So by and large we have responses from Malaysia and also we have couple of them from Singapore and UAE and the rest two are from US and UK respectively.

TOOLS:In this research we have taken only NRI clients who have shown interest in buying a property in India. We have designed the questionnaire where in the first three question talks about the personal details of the respondent and those for the confidential purpose are not been revealed by the company. The next questions talks about the interest, reason of investment of the respondent and also we have proposed couple of questions through which we can

identify what is the medium used by the respondents to know about the property.

Limitations of the Study

Every research has certain drawbacks. It is therefore necessary to incorporate them in the thesis to obtain a true perspective of the research topic. The following are a few drawbacks I faced during my research study.

The research is been conducted via mails and questionnaire so there is a possibility of error as we are not so sure about the originality also we have no idea if the respondent was clear about the questions. There was no personal contact with the respondents. Another drawback what we can consider is the number of respondent in the research. There were only 38 respondent whose consent has been consider and with these numbers we cannot conclude a clear image of the facts.

The study makes use of qualitative analysis, which is interview and questionnaire based in order to find out the use of internet in finding properties in the Indian real estate market. However quantitative approach has not been used as it would have prolonged the study.

 Due to time constraints, industries associated with the real estate sector such as construction and infrastructure have not been studied to establish the persistent demand for the realty segment in the forthcoming years. Also due to difference in valuation methods adopted by different countries and limited relevant data; comparison of Indian to any other countrys real estate market has not been possible. Another drawback was getting through to companies for the purpose of an interview. Limited number of interviewees induced me to collect further information through a questionnaire survey. Further, most of my could be a possibility of a biased research being carried out due to all Interviewees are being Malaysia based. Therefore I feel that for any further research on the Indian real estate market to be effective, the sample size must be increased to adequately include respondents from all parts of the world to get a clear national perspective of the real estate market.

PEST FACTOR:-

(Source:-: A Qualitative Approach by Rashi Mehta 2006-2007) Figure 2.1:- PEST factors in Real estate market in India:-

Political Factors The Government has greatly influenced real estate development through various laws, taxes, infrastructure and environmental regulations. The Construction Industry is considered to be one of the heavily taxed sectors of the economy. Any further tax imposed on this sector would affect the orderly growth and development of the Real Estate Sector.

Economic Factors

Macroeconomic factors according to me, which are instrumental in increasing real estate demand, are inflation levels and interest rates. Low and controlled inflation in the recent years have increased the purchasing power of consumers thereby increasing the demand for real estate. On the other hand, the banking sector has provided further liquidity into the domestic real estate market by charging lower interest rates. This has changed the lifestyle of consumers who now have easy access to credit facilities.

Socio-cultural Factors There has been a rising trend in the per capita income and the Gross Domestic Product (GDP) of the Nation. The average salary of Indians is increasing every year with more Multi- National Companies coming into India. Urbanization is moving at a fast pace putting constant pressure on need for more urban land space. The inflation levels and interest rates being under control have led to higher disposable income and hence demand for more homes.

Technological Factors The Internet revolution seems to be the most important technological innovation to impact real estate since the invention of the automobile and the elevator.

RISK IN INVESTING IN INDIA India has seen a great amount of currency inflow, particularly in service sector and real estate is a part of this sector. Investing in an emerging country such as India has significant risk attached to it, the main risk what investors carry while investing in an emerging markets is shown below :-

(Source: - PACIFIC STAR, 2008, PRAMERICA 2006 AND ERNST AND YOUNG 2008) Figure 2.2 (Risks which carry while investing in India)

With this limitations and risk, lets check what are the rules framed by the government of India and RBI together for the international investors. Few questions clicks when we think of foreign investors:-

CAN NRI BUY A PROPERTY IN INDIA, AND IF YES THEN WHAT ARE THE RULES AND REGULATION HE HAVE TO FOLLOW? ACQUISITION OF PROPERTY BY AN INDIAN CITIZEN RESIDING OUTSIDE INDIA: No special permission is required to acquire any immovable property in India other than agricultural land, plantation property or a farmhouse. It is notable that only non-residents who are Indian citizens, or who are of Indian origin referred to as NRI have been permitted to invest in immovable properties in India. Further, the non-residents who are Indian citizens or persons of Indian origin can also acquire any property (including agricultural properties, et cetra.) by way of inheritance.

ACQUISITION OF PROPERTY BY A PIO (PERSON OF INDIAN ORIGIN): The purchase made by the PIO should be from out of the following funds: o Funds received in India

o Funds held in any Non Resident Account maintained in accordance with the Provisions of FEMA and the regulations made by the RBI (Reg. 4(a)). A PIO resident has to take permission for an agricultural land or plantation property or a farm house by way of gift. o From a person resident in India, or o From a person resident outside India who is a citizen of India, or o From a person of Indian Origin resident outside India. (Reg. 4(b)). Thus, a PIO can even inherit agricultural land or a farmhouse or a plantation property, which he cannot normally acquire by way of purchase or a gift. However, no income can be earned on agricultural properties.

PERSONS WHO ARE ABSOLUTELY PROHIBITED FROM ACQUIRING OR TRANSFERRING AN IMMOVABLE PROPERTY IN INDIA WITHOUT PRIOR PERMISSION OF RBI: All persons, whether resident in India or outside India, who are citizens of Pakistan, Bangladesh, Sri Lanka, Afghanistan, China, Iran, Nepal or Bhutan are prohibited from acquiring or transferring immovable

property in India without the prior permission of The Reserve Bank of India. The above mentioned regulation is based on whether a person is a resident or a non-resident. If say a person, who is a citizen of China, comes and takes up employment in India, he becomes an Indian resident under FEMA. As a resident there are no restrictions on acquiring immovable property in India.

CHAPTER-3 INDUSTRY PROFILE

The real estate sector in India assumed greater prominence with the liberalisation of the economy, as the consequent increase in business opportunities and labour migration led to rising demand for commercial and housing space. At present, the real estate and construction sectors are playing a crucial role in the overall development of Indias core infrastructure. The real estate industrys growth is linked to developments in the retail, hospitality and entertainment (hotels, resorts, cinema theatres) industries, economic services (hospitals, schools) and information enabled services (like call centres) and vice versa. The Indian real estate sector has traditionally been dominated by a number of small regional players with relatively low levels of expertise and/or financial resources. Historically, the sector has not benefited from institutional capital; instead, it has traditionally tapped high net-worth individuals and other informal sources of financing, which has led to low levels of transparency. This scenario underwent a change with in line with the sectors growth, and as of today, the real estate industrys dynamics reflect consumers expectations of higher quality with Indias increasing integration with the global economy technology (IT)-

RESIDENTIAL REAL ESTATE Residential real estate industry has witnessed stupendous growth in the past few years owing to the following reasons:

 Continuous growth in population Migration towards urban areas Ample job opportunities in service sectors Growing income levels Rise in nuclear families Easy availability of finance

Demand for houses increased considerably whilst supply of houses could not keep pace with demand thereby leading to a steep rise in residential capital values especially in urban areas.

Broadly, residential real estate industry can be divided into four growth phases, as can be seen in the chart below:

Figure 3.1 (Housing growth trajectory)

Phase I (2001-2005) was an initial growth phase with stabilising residential real estate prices following the global recovery post the dot com bust and 9/11 terrorist attacks in New York. At the same time, there was steady growth in Indian economic activity, noteworthy recovery in IT/ITES industry, growing urbanisation and a rising trend towards nuclear families.

Phase II (2006-2008) was a high growth phase where high demand for residential real estate led to doubling of housing prices. Demand rapidly increased due to Indias growing population, accentuated urbanisation, rising disposable incomes, rapidly growing middle class and youth population, low interest rates, fiscal incentives on interest and principal payments for housing loans and heightened customer expectations.

Phase III (2009-2010) witnessed substantial slowdown and part recovery in demand because of the global economic downturn, which led to a decline in affordability and tight liquidity. The retreat of various real estate investors, accompanied by slowdown in the capital markets, has resulted in oversupply and falling prices.

Phase IV (2011-2014) is expected to remain a consolidation phase after slowdown. Demand is expected to remain strong with capital values witnessing modest rise. This period is expected to witness substantial supply of housing especially in urban areas.

FUTURE OF THE REAL ESTATE INDUSTRY IN INDIA

Real estate will become a stabilized sector of India like the manufacturing sector. Currently at a size of about $15 Billion, the segment is expected to grow to $50-$100 billion. While the future for the entire industry is bright, what has effectively been witnessed from the study is that there is a wide diversity in the growth. Indian real estate segment plays on regional dynamics. Every region in India seems to be growing at a different pace Mr Jain argues while comparing the Indian markets to that of USA, Indians are conservative and they would rather put their money in buying a house than the USA system where people pay monthly instalments and then mortgage their house to raise further money. However, this trend will soon catch up in India over the next few years. While the interest rates in the USA are very low boosting the housing sector; India still has to witness this development. This can be supported by a snippet on the savings rate of Indians. A study by CLSA suggested that High Net worth Individuals invested 25% of their wealth in real estate of which 36% was in Asia Pacific region; another positive sign for the good times to come. With the markets becoming organized, there is creation of a certain depth in them. To simplify Mr. Mistrys statement, real estate has become an investment tool. Capital gains with stocks are now flowing into the real estate segment. Earlier focus was

primarily on residential development with no lease model and dealings in unofficial money. Now various funds and structures according to Mr. Mistry are entering the arena such as REITs structure, lease framework, slum rehabilitation, society redevelopment and hotel growth. Eighteen Indian developers are now looking at investing in Singapore listed REITs which shows the global presence of Indian real estate markets. The future of the real estate industry will be extremely specialized with companies splitting into different structures. Investors will have a choice to narrow their investments in real estate into a land bucket, developer bucket, rental asset (yield) bucket or a combination of these according to their risk appetite. An example of this structure can be enumerated by the great success by Capital-Land - the Singapore based real estate Company that owns a separate land company, Developer Company and its own REIT listed on the Singapore markets (CLSA, 2006)

COMPANY PROFILE

PropTiger is an independent real estate advisor with a pan-India presence. We aspire to be your first port of call if you want to buy a residential property.

Mission of the company is: "To help Indian families buy their dream home."

Headquartered in the National Capital Region of Delhi (NCR), PropTiger has been founded by alumni of Harvard Business School, IIT and ISB who combined have decades of experience in real estate in India and abroad.

PropTiger has a specialist team of real estate experts spread across 8 cities Noida,Gurgaon, Mumbai, Pune, Bangalore, Chennai, Kolkata and Ahmed abad. Each of our staff is well trained across different aspects of buying residential property - from helping you narrow down the various options, to selecting the optimal property for you, to completing the final paperwork related to the transaction.

Services offered by the company:They believe that their focused approach helps them stand out from their competitors. Therefore, PropTiger only offers the following two services: Property Advisory - Buying an apartment in original booking from a developer Loan Advisory - Applying for a home loan to finance the transaction If you are a first time buyer of residential property, chances are that you might be anxious and somewhat confused about how to buy a house and how to get it financed through a loan. This is where PropTiger comes in. We recognize that there are many different real estate brokers, consultants and advisors. However, what sets us apart from all these worthy competitors is our unique combination of property and loan advisory.

The following are sequence of steps that our experts will take you through so that you can buy your dream house: 1. Identification of suitable properties that meet your criteria location, size, budget, developer. 2. Budget analysis and affordability of property - how much can you afford and what is your loan capacity. 3. Site visits, including viewing of sample flat if available.

4. Negotiation with developer for best price, terms of payment and location in tower. 5. Completion of paperwork so that developer can send you allocation letter when initial instalments have been paid. Thereafter, our specialist loan team can help you get the cheapest and the most credit friendly loans on the best terms.

Goal of PropTiger is to make the home-buying process easy, so that you can make the best decision for you and your family.

CHAPTER 4:DATA ANALYSIS

AGE GROUP 30-40 40-50

% OF PEOPLE 47.36% 26.31%

50-60 60 and above

23.68 % 2.63 %

TABLE 4.1 Age group of the respondent:-

In this report, we managed to get responses from 38 clients and out of these numbers, what we found is most of the client who participated in this survey belongs to the age group of 30-40 which constitute almost 50 % of the respondent and when we move at the higher side, we can see only 1 client, 2.63 % who belongs to the age group of 60 and above age group. From this particular sheet of data we can predict that most of the NRI clients who eyes for an apartment in Bangalore, India are middle aged group i.e. between 3040 or 40-50. So targeting these age groups will be profitable for the company.

50 45 40 35

47.36

30 25 20
15 10 5 0 30-40

26.31

23.68

2.63

40-50

50-60

60 and above

FIGURE- 4.1.1 - AGE GROUP OF THE RESPONDENT

GENDER

% OF RESPONDENT

Male

86

Female

14

TABLE-4.2 Respondent Gender group

The respondent participated in this survey were mostly male and thats obvious because most of the respondent were of Indian origin and in the Indian culture, male partners are been given the charge of taking decisions.

FEMALE 14%

MALE 86%

FIGURE -4.2.1 Respondent gender group

CITY IN WHICH THE RESPONDENT HAVE ALREADY INVESTED:-

CITY CHENNAI MUMBAI BANGALORE AHMEDABAD

% OF RESPONDENT 5.26% 0.38% 0.38% 0.38%

TABLE 4.3- NRI client Investment options (City in India) In this survey, we found that most of the respondents were first time buyer except 5 respondents and these five respondents have invested in Metro cities in India.

CITY IN WHICH THE RESPONDENT HAVE ALREADY INVESTED:-

5.26
5

0.38

0.38

0.38

CHENNAI

MUMBAI

BANGALORE

AHMEDABAD

FIGURE- 4.3.1 NRI client Investment options (City in India)

What is the primary source to get to know about the Real Estate market in India?

SOURCE INTERNET EXPO FRIENDS/RELATIVES

% OF RESPONDENTS 65 20 15

TABLE-4.4- source of information

From this table we can clearly see that how much Internet dominates. The use of internet to collect information accounts for almost 80 % followed by the EXPO in the international country. The reason we can see that the elder people who rarely use internet are the one who opted for options other than Internet and we can also see that few respondents have taken friends and relatives word to find a property.

FRIENDS / RELATIVES 15% EXPO 20% INTERNET 65%

FIGURE-4.4.1- Source of Information

What is the reason behind investing/wanting to invest in India?

REASON FOR INVESTING GROWTH OPPURTUNITY LOW INVESTMENT FAMILY PRESSURE RETURNS

% OF RESPONDENTS 44.73 26.31 13.15 5.26

TABLE-4.5 Reason of Investing

Being India is a developing country and also one of the powerful and influencing countries in Asia. People have a believe that investing in Indian market will fetch them good returns as the growth in India is seen at a higher rate and that was the reason why 17 out of 38 said that they are investing because of the growth whereas one more reason which popped out is the investment factor, respondent felt that investing in India is lower and better as compare to other countries.

50 45 40 35 30 25 20 15 10 5 0 GROWTH OPPURTUNITY LOW INVESTMENTS FAMILY PRESSURE RETURNS

FIGURE- 4.5.1 Reason of Investing

Real- Estate Brokers/ Consultant are becoming a vital element in India, do you agree with this statement?

RESPONSES

% OF RESPONDENTS

YES

74%

NO

26%

TABLE- 4.6- consultants play vital role in India Information is a vital part in real-estate market and customer never gets happy getting information from one source. Customer keep on browsing about a particular things till they finally buy it and real estate brokers and Consultants are playing this game effectively. The reason why most of the respondent said that they feel real-estate brokers and consultants are vital because these are the people who extract all the required information from the market and the builder and share the same with the customers so this things make customer job easier as then they dont have to browse any. Apart from that, Brokers also provide them options and discounts which they miss when they interact with one particular builder.

NO 26%

YES 74%

FIGURE- 4.6.1- consultants play vital role in India

Did any one or more of these consultants try to contact you or vice-versa?

COMPANIES

% OF RESPONDENT

PROPTIGER

94.73%

INDIAHOMES

15.78%

BOOKAPROP

7.89%

COMMONFLOOR

5.26%

ALLCHECKDEALS

23.68%

TABLE4.-7- Indian consultant who tried contacting NRI clients

It will be bias if It say PropTiger interacted with all the customers, the result of shows that 99% of the respondent were contacted by PropTiger but it may not be true as the respondent who were contacted here for the survey was done with the help of PropTiger so there are chances for biased results, but we

can see that the biggest competitor of PropTiger i.e. Allcheckdeals.com also have a convincing number followed by IndiaHomes.com and Bookaprop.com

COMMONFLOO R, 5.26% ALLCHECKDEAL S, 23.68% BOOKAPROP, 7.89%

PROPTIGER, 94.73%

INDIAHOMES, 15.78%

FIGURE-4.7.1- Indian consultant who tried contacting NRI clients

How was the service offered by these Consultants?

SERVICE OFFERED WAS:GOOD SATISFACTORY

% OF RESPONDENDT 79 21

TABLE- 4.8- Client feedback on consultant services

Customers are never happy for what they get. They always expect more than what they get. In a sales industry it is necessary to keep customers need as the first preferences but sometimes in this competitive world it lacks and thats was the reason we can see that people generally said that they were happy with the service but it could have been better.

SERVICE OFFERED BY CONSULTANT WAS: -

80 70 60 50 40 30 20 10 0

79

21

GOOD

SATISFACTORY

FIGURE- 4.8.1 Client feedback on consultant services

Do you get all desired information in a Real Estate broker webpage?

INFORMATION IN WEBPAGE TO SOME EXTENT YES NO

% OF RESPONSES 21.05 2.63 74.32

TABLE-4.9- client feedback on consultant webpage information People keep browsing and then keep searching, but they dont get the exact information and this is the concern to all online information grabber. Most of the respondent said that they didnt get all the information about their desired property online. Whereas only 18% of the respondent said that they are happy with what they got, it was sufficient enough to take decisions

TO SOME EXTENT, 21.05% YES, 2.63%

NO, 74.32%

. FIGURE- 4.9.1 client feedback on consultant webpage information

What all information you expect when you browse a Real Estate broker webpage?

OPTIONS PRICE LOCATION ALL DETAILS CONSTRUCTOR

% OF RESPONSES 75% 5% 5% 2%

POSSESION INFORMATION

2%

DISCOUNT INFORMATION

3%

APPROVALS INFORMATION

8%

TABLE- 4.10- Missing information in consultant webpage From the above table, we can see that most of the people told that they think Price of the property should be mentioned in the Website as that helps them to

take decision in the better way. Apart from the price, few respondents also looked worried about the approval factors (Government approvals).

ALL DETAILS 5% LOCATION 5%

CONSTRUTOR 2% POSSESION 2%

DISCOUNT 3% APPROVALS 8%

PRICE 75%

FIGURE-4.10. Missing information in consultant webpage

RECOMMENDATION

After the complete study I can understand the fact that India is one of those countries which attract investors to put their money and just putting their money in something doesnt make sense and there where real estate plays a vital role. In the recent times world faced a recession attack and India survived that quiet promisingly. Though there was a downfall but it recovered and recovered well. The belief in Indian market which we can find is, the immovable assets are considered to be the best investment as there are very minimal chances of depreciation. The value of Land and the houses are touching sky in urban areas and Investors are tapping that in regular times. If we talk about the rural areas, the investors dont prefer to go for those locations but there will be a time when the demand of these locations will be more than the Urban areas and again we can see Investments flowing from all over the world. One more concern which I felt is the NRI customers who are willing to invest are mostly of Indian origin and that we can expect one to buy a piece of land in the home country or In the native but there are areas where we can seek investment from the International investors. Government are very liberal as per the investment from Foreigner are concern but there is a need to attract them and make them aware of the situation and benefits in Investing in India.

As per PropTiger is concern, I found this is the only company in the Market which have great potential to grab the market share in Real Estate consultancy market, there are few reasons which support this: They mostly deals with Tier-1 builders, this make PropTiger secure as the builders will be clean and no future litigation will be seen. It provides a clear picture to the customer as per the location/ rates / property is concern. The Manpower what PropTiger have is not just more in numbers than the competitors but are also promising which help customer to buy their dream homes in the country. There is a special NRI team in every branch which take cares of overseas operations which again generate more of business for the company as well as they helps in bringing investment in the country.

CONCLUSION & FINDINGS

This chapter sums up the research carried out for the thesis. It briefly covers the literature review, methodology and analysis to present the main findings of the study. This is followed by the limitations of the research; offering researchers a possibility of falling upon an interesting area for further study. Lastly, the chapter provides recommendations for sector improvement.

This dissertation aims at finding the demand of real estate market in India among NRI customers and determines whether there are lucrative opportunities for investment in the market. The research study was split into four broad sections and an interview and questionnaire method was adopted for conducting the primary research. The four research areas were; importance and growth of the real estate industry in India, different avenues for investment in the sector, concerns regarding the sector, the role of the Government. The interviewees were all of Indian origin residing outside India and all of them had/ have an interest in Indian real estate market because of various reasons. The respondents of the questionnaire comprised of the above along with consumers the end-users of property.

The main research findings are summed up below:

With a rising population growth (1.7% per annum) and consistent demand for housing (real estate) and consumptions (commercial); India is set to have a long-term active demand from the consumers segment. The demand is not only limited to the local buyers but it have enough of opportunities for the customers across borders and thats the reason we can find a steady growth of NRI buyers In Indian Real estate market. It is for this reason that India is increasingly gaining significance as an investment destination for real estate round the globe. After analysing all reasons given by the respondents for the growth of the sector, it can be concluded that a large proportion of the NRI customers is attracted towards Indian real estate because of its growth. Also real estate as an investment tool has been growing in importance over the years in boosting an investors wealth portfolio. This is due to higher returns being generated on investing large amounts of funds and the possibility of earning from various sources such a capital appreciation of land prices, dividends from holding Real Estate Company shares, rental income et cetra.

REFERNCE LIST

Desai, S., & Rane, S., (2006). Real Estate- Gold Rush, S.S. Kantilal Ishwarlal Securities Pvt. Ltd (SSKI), pp.1-56

Economy watch (dated 23 November 2010) Real Estate Industry, Indian Real Estate Market and Boom. Downloaded from http://www.economywatch.com/real-estate as on April 10, 2013

Federation of Indian Chambers of Commerce and Industry, New Delhi. (2007). Current State of Indian Economy, pp. 1-35.

Financial Times. (dated August 8, 2007). Indian real estate opens to foreign investors. Downloaded from http://www.ft.com/cms.html as on April 10, 2013

Fortune Magazine. (July 10, 2006 issue). Indian real estate: boom or bubble? Downloaded from http://cnnmoney.com as on August 5, 2007.

Indian Economy Blog. (Dated August 1, 2007). Entrepreneurship: How India Scores Over China. Downloaded from http://indianeconomy.org as on August 3, 2007

Kanwar, O., (2005). Real Estate International Development Summit, Federation of Indian Chamber of Commerce and Industry (FICCI)

Kaiser, R., (1997). The Long Cycle of Real Estate, Journal of Real Estate Research, vol. 14(3), pp. 233-258

Mahurkar, P., & Senthil, G., (2004). Real Estate Fund Management: Indian Perspective, Asian Real Estate Society, pp. 1-34

Pennington, A., (2001). The evolution of real estate in the economy, Journal of Real Estate Portfolio Management, vol. 3, pp. 34- 43

Saunders, J., (2007). Changing Landscape: Demand shifting to a higher gear, Crdit Lyonnais Securities Asia (CLSA) India property -Sector Outlook, pp.1-63.

Vadivel,v (2003) Can NRI invest in India, the charted accountant (Oct 2003), 430-435

Websites: www.indianrealestateforum.com www.sociologycommission.org/docs/glossary.htm http://www.proptiger.com/about_us.php http://www.proptiger.com/our-services.php

APPENDICES

QUESTIONNAIRE FOR INTERNATIONAL INVESTORS WHO OPT FOR INVESTING IN INDIAN REAL ESTATE MARKET (BANGALORE) Respected Sir/ Maam, I am doing a brief study on international investors who are keen or had invested in Indian real-estate market as a requirement of post-graduation. I request you to spend a few minutes to respond to the following questionnaire.

1. Personal Details

Name:............................. Email- ID:. Contact Number:-. Age: .......... years Male Sex: emale

2. Is this the first time you are investing in Indian Real estate Market? a. Yes b. No If No, which Location (City) you have invested earlier? ..................................................... 3. What is the reason behind investing/wanting to invest in India? a. Growth Opportunity c. Family Pressure b. Home country influence ( For NRI) d. Comparatively Low investment 4. What is the primary source to get to know about the Real Estate market in India? a. Newspaper c. Friends/ Relatives b. Indian real estate EXPO d. Internet- (E-commerce) 5. Do you agree with the fact that internet is one of the best methods to collect information ? a. Strongly agree c. Agree

b. To some extent

d. Disagree

6. Real- Estate Brokers/ Consultant are becoming a vital element in India, do you agree with this statement? a. Strongly agree c. Agree b. To some extent d. Disagree 7. Did any one or more of these consultants try to contact you or vice-versa? Tick all the consultants you have interacted with. a. PropTiger Real Estate c. 99acres.com b. Allcheckdeals.com d. Magicbricks.com If Others.. (Name it) 8. How was the service offered by these Consultants? a. Very Good c. Good b. Satisfactory d. Disappointed 9. Do you get all desired information in a Real Estate broker webpage? a. Yes b. To Some extent c. No If No, What all information you expect when you browse a Real Estate broker webpage? b. Detail information on the property c. Exact location of the Property c. Price breakups d. Offers/ Discounts, If any If Others

Thanks for your valuable time. We from PropTiger assure you that your details will not be share else-where apart from this educational report.