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Real Estate Sector Needs To Get More Consumer Centric

Rishabh Chamoli | 2022-09-10

Here is a look at the key changes required to keep up with homebuyers demands

The real estate industry is yet to recover fully from the twin shocks of the long tail effect caused by the pandemic and the uncertainty brought on by global happenings.
Under these circumstances, the industry that is a significant employer of human capital and bellwether of consumer sentiment is seeking much needed succour.
Reducing borrowing costs will force retail loans from banks to be cheaper as banks pass on these benefits to consumers.

This is bound to deploy a positive sentiment in the minds of the buyers. However, there are a few other challenges that the real estate industry must watch out for.
Firstly, there is the supply side concern. Rising interest rates on the back of a two year hiatus mean that there are many projects that are frozen, while many projects are still moving ahead tentatively.
Then there are the structural issues that have consistently plagued the industry. Post pandemic, consumers are wary of uncertainty and buying stress.
Both areas have the potential to create significant friction and pain in the buying and post purchase journey.

Unfortunately, both these areas are still largely unaddressed by the industry. The consumer today is savvy, and they do their research well and in many cases, the consumer will refuse to be rushed into a decision.
This is all the truer, simply because the home rental market is subdued as well, hence rentals are affordable. Couple this with the overriding sentiment of the current generation of homebuyers who are comfortable in the sharing or rental economy, hence buying a home may not figure in the top priorities of their spending, unlike earlier generations.
So, while we are seeing green shoots in terms of real estate consumption, the industry is clearly underperforming.

The real estate industry unlike the automobile, the eCommerce, or the consumer goods industry is still in its nascency in utilising consumer insights to design and drive frictionless customer journeys.
The obsession is still with functionality in terms of product, pricing, and deals.

Buying a home is a high stakes decision for most people. There is high cognitive dissonance here. Higher the dissonance, the poorer the word of mouth.
Smart real estate brands need to realise that the product quality and functionality is now table stakes, taken as a given.
That cannot be the sole ace in the pack to get a consumer to invest and purchase.

What consumers are demanding in addition to functional fulfilment is a ruthless elimination of pain and friction, and want more clear communication.
Real estate brands that can achieve this will stand head and shoulder above the clutter.