Home Truths. Home in on a property using analytics

Until recently, most home buyers zeroed in on property based on intuition, emotion and hearsay. But not any more! Thanks to a lot of information-gathering happening in the last few years — both online and offline by property portals and consultants — you now have access to a wealth of information to guide your decision.

Want to know which neighbourhood and project is the most suitable for you?

For instance, which one has better access to social infrastructure such as schools, hospitals and parks? Online realty solution provider PropTiger.com has come up with a way to assess these metrics with its ‘Liveability Score’.

The site collects data for over 100 parameters, including facilities such as restaurants and other amenities around a property. It is not just the number of facilities, but their quality, and the background of the developer is also analysed before arriving at the scores, says Prashan Agarwal, Co-Founder, PropTiger.com. Scores are currently available for over one lakh homes in 12 cities.

Safety is another important aspect when evaluating a neighbourhood. SafetiPin, a non-profit organisation, provides a safety score for the Delhi and NCR regions currently and plans to expand its reach.

The score is based on nine parameters, including lighting, visibility, openness, crowd, diversity, security, transport, footpath and the overall feel of a locality. Information is based on audits conducted by trained auditors and is also sometimes crowd-sourced.

Infrastructure development improves liveability and you may be able to assess that by new project launch numbers. “If there are no projects from an established developer, it indicates that there is very less growth in that area or postponement of anticipated infrastructure growth,” says Sankara Srinivasan, Chief Operating Officer, Realtycompass.com, a property portal.

Then there are also time-tested rating agencies such as CRISIL, which analyses a project comprehensively on various risk parameters to assign a score. CRISIL’s Real Estate Star (CREST) rating evaluates the risk of project delivery as per the promised specifications by measuring qualitative metrics such as legal, financial and construction-related aspects.

Based on these and the builder’s track record, a city-specific rating is assigned. Builders are also tapping into data to decide on project features based on home buyer demands. Data based on the enquiries of existing customers of builder Casa Grande last year showed that water and open space ranked high in the amenities list.

“A squash court or home automation ranked very low, with only 15 per cent of the people showing interest,” says Arun Kumar, Managing Director & Founder – Casa Grande.

Real estate consultants such as JLL, Cushman & Wakefield and Knight Frank, as well as property portals, provide data on new launches and inventory for various localities typically every quarter.

With such data on your side, you may be able to negotiate a better price with your property developer.

Say you find a large number of unsold homes in a particular neighbourhood and there was no price increase in the last two quarters; it is most likely an indication of sagging demand. Consequently, a builder with a large project to sell may be more open to offering you a deal.

Likewise, there are cases where the price of a completed home is cheaper than a comparable home that is under construction.

Mridul Upreti, Chief Executive Officer, JLL Segregated Funds Group, a real estate private equity fund, says that analysis of data over six years in select micro-markets in Gurgaon shows that sentiments are immediately reflected in the completed homes market.

It may take a lag of two to five quarters for the prices to be reflected in the properties that are still under construction.

Knight Frank, for instance, releases developer, buyer and lending institution sentiments for large property markets in the country every quarter. The recent data for the July-September quarter is pointing to caution, after a more upbeat outlook in the earlier quarter. Access to such analysis for the city you are interested in will tell you if there is a window of opportunity to negotiate prices.