I take this opportunity to express my profound gratitude and deep regards to my guide, Mrs Richa Maini, HR Manager, Bardiya Real Estate Pvt. Ltd. for exemplary support, guidance and monitoring and constant encouragement throughout the course of this project work. I am grateful to Bardiya Real Estate Pvt. Ltd. and all its employees for making the environment conducive to learn from their practices & vast experiance in the industry. I also like to thank them for this opportunity to learn the market conditions by providing a platform to interact with the employees directly. I am also grateful to my teachers and mentor for guiding me.
OBJECTIVE OF THE STUDY
1. To determine the customer’s perception.
2. To determine the customer’s expectations.
3. To determine the problems faced by the customer while investing for property.
The Indian economy is the second largest growing economy of the world and the Real estate sector is one of the major contributors in the growth of the Indian economy. I have undertaken this study to analyze the perception of the investor in the real estate sector and also to identify the various reason contributing to the growth of the sector. The study is based on the data collected both through primary sources such as questionnaires, personal interviews and secondary sources like internet, journals, books and magazines. The sample size taken for the study was of 200 respondents who were interviewed personally and on telephonic interview. The study also looks into the role of the government by way of different policies that effect the investment decision of the investor. A case study was made on Bardiya Real Estate Pvt Ltd. The case study is based on the investment made by the company in Rajasthan. It overs the problems faced by the company and the future prospect of that project.
Customer Perception is defined as the way that customer usually view or feel about certain services and product. From the layman’s prospective, perception is defined as an act of being aware of one’s environment through physical sensation, which denotes an individual’s ability to understand. (Source: investopedia.com)
Perception is the process whereby people select, organize and interpretate sensory stimulation into meaningful information about their work environment. (Source: Rao and Narayan: 1998)
One of the perception important to the study of consumer behavior is level of perceived risk in potential investment. Types of risks customer face includes: performance, financial, physical, psychological, social and time. (Source: Ross, 1975)
The amount of perceived risk is a function of product, characteristics of customer and external forces. Customer through their perceptual filtering use their mental image of town and types of archietecture tend to enduce. If the city is thought to be dangerous, then the consumer will notice the news report of crime in the area. Similarly, if consumer perceives investment in houses as safe and investments in industrial property as risky, then no amount of financial analysis may be able to sway them. In addition, two investor in similar financial sitiationmay place different risks, premiums on a particular investment because of their personal attitudes towards risk. (Source: http://citeseerx.ist.psu.edu)
The real estate sector has become a major contributor of an economy’s growth. To understand the significance of the sector and its implications, there have been various research on real estate industry both in India and abroad. I have tried to study few such research papers to get a better idea about the current scenario of real estate sector. Singh Dhillon, Jaskaran, Lubana says that the role of real estate sector consumers in estate agency practice cannot be emphasized. This study provides an analysis of real estate consumers’s perception of service quality in Punjab, India, for the purpose of creating better consumer satisfaction and improving service qualityin the real estate agency market.
A survey of 203 real estate consumer revealed what real estate consumer actually value in real estate agency service delivery but are lacking on the part of real estate agents. This research indicated 5 key component to customer’s satisfactionin real estate sector. They are- “courtesy”, “provided service as promised”, “frequent communication”, “exact time service would be performed” and “ personal attentention. (source: International Journal of Research in Commerce, IT and management, nov 2012 vol. 2, issue 11, page no. 46)
Vandna Singh and Komal (2009) in their research paper found that as the GDP increases the real estate prices also increases because there is a high degree of Positive correlation between the real estate prices and GDP. The Real estate prices also increases with increase in the per capita income as there is high degree of positive correlation between these two. The FDI into the country affects the real estate FDI and real estate having a positive correlation leads to the boom in this sector. Increase in FDI from 2006to march 2007 is 10%. Earlier it was 16% and now in 2008 it is 25%.The interest rate also affects the real estate prices because it affects the lending and borrowing by the investors. In residential segment, availability of easy home finance and rising purchasing power has driven the growth.
Builders are launching high-end, life style residential products to cater to the growing bunch of high net worth individuals. They suggested that due to high prices the lower income group is not able to purchase the land, so govt. should take measures to protect the lower income group. The investors should analyze the type of land in which they are going to invest and the potential Returns from it. Due to lot of investment avenues in real estate in India, fraud cases are also increasing day by day like in Delhi deconstruction of buildings. Thus careful measures and laws should be enacted to deal with these types of situations. (source: International research jounal of finance and economics, ISSN 1450-2887, Issue 24,2009)
Dirk Brounen in Dec 2008 said that the Real estate markets around the world have earned a complicated reputation. On the one hand, real estate markets offer investors a wide spectrum of profitable investments opportunities, investments that nowadays can be executed by simply buying shares of stock listed by real estate investment companies. In the first half of this inaugural address, the boom of these real estate stocks is discussed. In less than three decades, the listed real estate market developed into a sector with almost400 listed firms worldwide, representing a sum aggregate market capitalization of around one trillion dollars by the end of 2007. Three relevant lessons regarding these international real estate stocks are discussed in the first fifteen pages of this booklet, lessons offered by real estate research from the Rotterdam School of Management.
On the other hand, real estate markets are notorious for attracting entrepreneurs with bad intentions, seeking for opportunities to circumvent the strong arm of the law. These activities have yielded many headlines in the daily press and have given real estate a gloomy reputation. The dynamics of foreclosure auction of homes is an example of a source of negative headlines, stressing that the suboptimal organization of these auctions prohibits distressed sellers from earning a fair price for their home. In the second part of this address, I focus on an empirical test of the matter. By analyzing over 700 auctioned homes the dynamics of the auction system is discussed objectively. This offers a fair view on the problems at hand and searches for way to improve the system in the near future. (Source: Bronen, Dirk, The bloom and gloom of real estate market, dec 2008, ERIM report series) Articals about real estate : (source: Economic times)
Slowdown in IT hits commercial real estate sector (March 25th 2013)
Slow uptake of office space by information technology firms in India is beginning to cast a shadow over the country’s commercial real estate sector, data from property consultancy firms indicate. Figures provided by two property consultants — Cushman & Wakefield and DTZ — show that absorption of office space in 2012 across the top eight Indian cities stood at 29.05 million sq ft, a 23% decline over the previous year. Of this, the share of the IT sector, which accounted for 64% of the commercial space absorbed in 2009, dropped to 44% in 2012 at 13.22 million sq ft. It was 16.08 million sq ft in 2011.
Sebi introduce draft norms for Real Estate Investment Trust (October 10th 2013)
Looking to attract more investments into the capital market, Sebi today proposed listing of Real Estate Investment Trusts (REITs), a popular instrument for raising funds in the realty sector. Issuing draft norms for REITs, the capital market watchdog said the evolution of such investment vehicles is “crucial” for the rapidly growing real estate industry REITs would be allowed to list on stock exchanges through Initial Public Offer (IPO) and can raised funds further through Follow-On Offers, according to the consultation paper and draft norms issued by Securities and Exchange Board of India (Sebi). “REIT shall be set up as a Trust under the provisions of the Indian Trusts Act, 1882,”
After going through the study of customer perception in real estate and various research papers and articles, I interpreteted that now a days who go for investing in real estate have become more aware about what they should seek and are concerned about the situation of right type of property for them. Many people are dissatisfied from the real estate marketing information provided by real estate agents and companies. Mostly people use print media and news reports as a source of information while searching for a property. Due to lot of investment avenues in real estate in India, fraud cases are also increasing day by day. Therefore, careful measures and laws should be enacted to deal with these type of situations.