We expect EBITDA losses will start contracting from FY24 onwards: Dhruv Agarwala, CEO, Housing.com  

The Indian real estate market is witnessing an upswing primarily because of historic low home loan rates; and increased pent-up demand. At the moment, this seems like a long term upcycle that should stay for more than one year. For at least three to four consecutive years, the industry was hit by policy changes like demonetisation, implementation of RERA and switch to GST regime. As the green-shoots were visible, Covid hit construction activities.

However, finally from H2 of 2021 the upswing begun. Despite Omicron, the sales momentum was maintained. Buyer confidence – in investing towards new homes – is back, something that the sector has been waiting for quite long.

The RBI on August 5 upped repo rate by 50 basis points. The new rate, which is 5.40 per cent will ultimately impact cost of borrowings for Indian homebuyers. However, so far, the earlier hike announced by RBI and consequent increase in home loan rates have not had any discernible negative impact on demand. The positive buyer sentiment and renewed investor interest in residential real estate will cushion adverse impacts.

Yes home prices are up by 5-10 per cent y-o-y depending on location and demand for the property. But that has also been driven by an increase in raw material prices, like cement, copper, aluminium, steel and so on. This was a March-June phenomenon when the raw material prices were shooting up. Inflationary pressures are quite high too. Post government intervention, there have been some cooling down in costs.

We’re expecting home prices to be at stable levels with a 2-5 per cent odd hike depending on factors like inflation, cost of borrowing for the developer, change in minimum wage paid to workers and so on.

Housing.com started as a search and discovery platform for home-buyers and listing site for sellers. But the portfolio has now expanded beyond it and today we are a full stack player that provides allied services related to consumers’ home buying, selling or renting journey. These services include pay on credit, wherein people come and pay rent and utility bills via a credit card, property management services and packing and moving services. The new product lines we introduced on Housing.com are growing at a rapid pace.

Makaan.com targets Tier-2 markets in the search and discovery space and serves as a flanking brand for Houisng.com. It has built a dedicated user-base with minimal overlap in these tier-II cities. Last year, we entered seven tier -II cities with Housing.com. As we expand, we will be less reliant on Makaan for our Tier -II strategy. On the other hand, PropTiger.com is an online to offline broker with a brokerage driven revenue-model rather than an advertising led model for Housing.com.

There are no plans to merge these three brands. In terms of ads and marketing spends, Housing.com remains our main brand and we continue to focus on it.

We are expanding our Housing Edge Services, that is an allied services platform catering to the consumers’ buying and renting journey. We will keep on experimenting with new services under Housing Edge.

With some pilots already underway, we will ramp up our commercial property listings service sometime this year, both leasing and purchase. We began our pilots last year (in 2021) and the service is now seeing meaningful traction.

At the moment we are EBITDA negative. We are continuing to invest in the business and we expect that EBITDA losses will start contracting from FY24 onwards.