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 The 45-year-old from Kolkata likes to buy homes online, sometimes
without visiting them. In the last four years, he has bought five
properties for 40 million rupees ($641,900) on Proptiger.com, partly
owned by Murdoch's News Corp.
Foreign investors like Murdoch have already put more than $200
million into portals that help people like Bhartia buy homes.
Spurring the interest is Prime Minister Narendra Modi's vow to
provide a house to every Indian family by 2022 as the country's
growing army of Internet users embrace e-commerce.
"Scale and growth of businesses like (online retailer) Flipkart are
a proxy that consumers in India are comfortable doing transactions
on the Internet," said Mukul Singhal, principal at India-China fund
SAIF Partners, which has invested $10 million in Proptiger. News
Corp has a $30 million stake.
India's Internet legion, already bigger than Indonesia's 250 million
population and growing at an annual rate of more than 20 percent,
has also lured property portal investment from the likes of Japanese
telecoms-to-media firm SoftBank Corp. Last week Google Inc's Google
Capital unit invested an undisclosed sum in a site called
Commonfloor.com.
The need for long-term capital for start-ups like Proptiger and
Housing.com also makes India more attractive for foreign investors
compared with China, where local money dominates, according to one
investor, speaking on condition of anonymity.
Indian home buyers by tradition work with local brokers. But in a
vast country with a property market already estimated by KPMG to be
worth $121 billion in 2013, the Internet offers people like
businessman Bhartia the ability to compare house prices hundreds of
kilometers away without leaving home.
"A single broker would have his own limited contacts...and he could
have personal reasons for pushing a property. Online you get a very
good and holistic view," said Bhartia, whose firm manufactures gas
cylinders. He bought his last two properties without visiting them
at all.
MODI MOVES
Prime Minister Modi has already sought to make an impact on India's
still largely unregulated property market by making the listing of
real estate investment trusts easier. He has paved the way for more
foreign investment in construction, and eased land acquisition
rules.
"Real estate in India is very messy. There is a lot of information
arbitrage and asymmetry...no credible pricing data and that is why
there is a strong case for technology-based solutions," said SAIF
Partners principal Singhal.
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Driven by expectations that years of property market slowdown may
come to an end soon, investment in property portals jumped five-fold
to $193 million last year, according to data from Venture
Intelligence. The research firm also expects India's housing market
to grow to $158 billion by 2020.
Desperate to boost housing sales that have flagged as India's
economy stuttered in recent years, property developers are tying up
with portals to push transactions online with special promotions.
Developer Tata Housing, part of the $100 billion Tata group, in
November sold homes worth more than 500 million rupees through a
partnership with Housing. Buyers could see 3D models of the units,
make a token payment online and complete the remaining purchase
offline.
Such websites, which charge subscription fees or a percentage of the
sales price, still account for a fraction of home sales in India.
For investors like News Corp, though, the Internet logic is
inescapable.
"India's digital demographics are a key factor in looking at this
space," said Raju Narisetti, vice president of strategy at News
Corp. "More of the research, decision-making and increasingly the
early part of the journey of buying a home is all happening on the
Internet."
($1 = 62.3150 Indian rupees)
(Editing by Kenneth Maxwell)
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