A SUMMER INTERSHIP REPORT

ON

INVESTOR PERCEPTION ABOUT REAL ESTATE AND THE

FACTORS THAT IMPACT THE REAL ESTATE INDUSTRY

BY

RAMESH SINGH

19BSPDD01C0129

RE/MAX ACTION
MUMBAI

1|Page
 SUMMER INTERNSHIP
REPORT – 2020
ON

“INVESTOR PERCEPTION ABOUT REAL ESTATE

AND THE FACTORS THAT IMPACT THE REAL
ESTATE INDUSTRY”

BY
RAMESH SINGH
19BSPDD01C129

SUBMITTED FOR THE

PARTIAL FULFILLMENT OF TWO YEARS FULL TIME
COURSE
MBA (2019-2021)

SUBMITTED TO

INTERNAL GUIDE: EXTERNAL GUIDE:

PROF. TASNEEM DHOONDIA MR. PRAKASH PATEL
ICFAI BUSINESS SCHOOL, DEHRADUN RE/MAX ACTION
 DECLARATION

I Ramesh Singh, the student of IBS Dehradun, hereby declare that the project
work entitled “INVESTOR PERCEPTION ABOUT REAL ESTATE AND THE
FACTORS THAT IMPACT THE REAL ESTATE INDUSTRY.”

This Summer Internship report has been submitted to “IBS Dehradun” is a record
of an original work done under the guidance of Prof. Tasneem Dhoondia, Faculty
Member, MBA as a requisite standard for the partial fulfillment of the Master of
Business Administration (MBA). To the best of our knowledge no part of this
report has been reproduced from any other report and the contents are based on
original research.

RAMESH SINGH
19BSPDD01C129
 ACKNOWLEDGEMENT

I would like to express the deepest regards to my faculty guide Prof. Tasneem
Dhoondia, for her continued guidance and invaluable encouragement. I am
indebted to his vast bank of knowledge and his passion for the subject.

I express my sincere gratitude to my company guide Mr. Prakash Patel,

Manager, RE/MAX Action Mumbai, for his guidance, continuous support
and cooperation throughout my project, without which the present work
would not have been possible and helping me gain valuable learning
experience. His extensive work experience in this industry helped me to
fathom newer perspectives and approach to the research.

I would sincerely thank all the members of RE/MAX Action for providing me
with full support and guidance.

My sincere gratitude to all the developers and respondents who took time out of
their busy schedules and contributed to my thesis.

And lastly, sincere thanks to my parents and the almighty for being my pillars
of strength.

RAMESH SINGH
19BSPDD01C129
 TABLE OF CONTENTS

Authorization
Acknowledgements
Executive Summary
1. Introduction
1.1 Introduction
1.2 Background of the study
1.3 Scope of the study
1.4 Objective of the study
1.5 Methodology
1.6 Limitations
2. Organization/Company overview
2.1 About- RE/MAX Global
2.3 RE/MAX India
2.4 Mission and Vision of RE/MAX
2.4 SWOT Analysis
2.5 Role of RE/MAX agent/associate
2.6 Services provided by RE/MAX agent
2.7 Current projects of RE/MAX Action Mumbai
3. Real Estate Industry overview
3.1 About- Real Estate
3.2 Real Estate Industry in India
3.3 Real Estate Industry market in Mumbai
3.4 Major player of the industry
3.5 Marketing strategies- Real Estate Perspective
3.6 Factors that determine the value of Real Estate
3.7 Trends in Real Estate Industry
3.8 Reason for success of Real Estate industry
3.9 Factors affecting the decision of investment
3.10 COVID-19 effect and current situation of Real Estate
industry
4. Data Collection
4.1 Primary Data
4.2 Secondary Data
5. Finding and Analysis
6. Conclusion
7. Recommendations
8. Learnings
9. Annexures
10. References
11. Glossary
12. Questionnaire
 EXECUTIVE SUMMARY

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 also looks into the
various factors such as economy slow down, increasing interest rate and
role of the government by way of different policies that effect the
investment decision of the investor.
Real Estate, being one of the biggest business sectors, needs more
efficiently targeted marketing campaigns as this is a very niche and
unexplored field in the Indian scenario. Real Estate projects are highly
priced products which cannot be sold efficiently without a well strategized
marketing campaign so as to reach out to the exact targeted market.
Through this study, efforts have been made to pin point the existing supply-
demand problems in the cities of Mumbai in the affordable housing sector
specifically. Also, suitable solutions for marketing campaigns have been
proposed considering the current market realities for Mumbai city.

The study is based on the data collected both through primary sources such
as questionnaires and secondary sources like internet, journals, books,
surveys and magazines. There are two sets of questionnaires. The first
questionnaire is designed to understand the needs of consumers and the
factors affecting their behaviour as consumers and second questionnaire to
understand the existing marketing techniques used by developers and
analyse their investments and planning in marketing/advertising.
 1.
INTRODUCTION

1.1 INTRODUCTION
The world is tremendously competitive now. In every sphere of life and
business, competition has become more and more furious. Every firm tries
to obtain and retain efficient employees to meet the future challenges. In
this rivalry, obtaining and retaining the best employees has become very
important, as employees are that factors who make a firm alive and proceed
to the path of profit.

The course under MBA program designed with an excellent combination of

theoretical and practical aspects. After the completion of MBA consisting
of theoretical exposure, the students are sent to different organization to
obtain some practical exposure in different sectors which would help them
in taking up professional career. ICFAI Business School, Dehradun has
undertaken three months of internship program for its MBA students, as an
important and essential requirement of the MBA program.

I have tried my best to use this opportunity to enrich my knowledge on

banking system and also incorporate my knowledge, which I have learned
from my classes.

India is the world’s sixth largest economy by nominal GDP, of which

53.77% is contributed by the service sector alone. The biggest chunk of the
service sector stays occupied by the real estate industry including housing,
retail, hospitality and commercial. The housing sector alone contributes to
5-6% of the GDP while real estate sector cumulatively contributes to
roughly 9%.

Initiatives and policies like ‘Housing for all by 2022’, ‘100 Smart cities
project’, ‘Sardar Patel urban housing mission’, demonetization, RERA, etc.
have significantly influenced the growth of this sector both positively and
negatively. However, the buying tendencies shown by the consumers did
not go hand in hand with the stipulated growth of the sector. Most of the
developers are introducing new projects whilst sitting on pile of unsold
inventories.
 Thus, marketing and sales have a significant effect on the real estate
industry indirectly and the strategies adopted by the developers would play
a major role in determining the country’s macro- economic health.

1.2 BACKGROUND OF STUDY

I worked as an Intern in RE/MAX Action, Mumbai. This report is part of
the curriculum of the summer internship. This report covers housing crises
and meet the solution. This report gives a narrative overview of the Real
Estate in Mumbai and the factors that affect the Real Estate industry. This
report does explain the nature and objective of the solution of Real Estate
industry in Mumbai.

However, since the information of sales and marketing are confidential and
sensitive in nature, so that I tried to construct this report with the help of
available information.

1.3 OBJECTIVES
The following are the objective of the study:
1. To identify the major players and factors that determine the value of Real
Estate.
2. To understand the marketing, sale promotions and sale process of Real
Estate industry.
3. To identify the main areas of investment in Real Estate.
4. To identify the current trends in Real Estate.
5. To identify the factors affecting the decision of investing in Real Estate
such as fluctuating economy and government polices etc.

1.4 SCOPE OF THE STUDY

 The study will help to understand the reasons for increase in unsold
inventories in various metro cities range from 15-60%.
  The stipulated growth trends do not go hand in hand with the
on-ground realities of the piled-up inventories.
 The marketing strategies have not evolved with the digitization
boom, and still the real estate marketing techniques are
conventional and financially heavy.
 Hence there is a need to establish the gap between the need of the
consumers and the supply from the real estate developers, and
overcome it using efficient marketing strategies.
 Also, understand how and till what extent will the digital
marketing affect the lead generation and sales of real estate
projects.

1.5 METHODOLOGY

 Sample Size: 300

 Source of collection data: Primary Data and Secondary Data.
 Tool used for collection of data: Questionnaire, Telephonic Interview,
Personal Interview.

RESEARCH DESIGN:

Selection of Objective of Preparing

topic the study Questionnair

Analysis and
Final Report interpretation of Data collection
data

PRIMARY DATA:

There are two sets of research questionnaire:

Questionnaire 1 – A questionnaire designed to understand the needs of

 consumers and the factors affecting their behaviour as consumers.

Questionnaire 2 – An interview questionnaire to understand the existing

marketing techniques used by developers and analyse their investments and
planning in marketing/advertising.

SECONDARY DATA:
 Reports on Indian real estate by market research JLL, Knight Frank,
CBRE, etc.
 Census data from government websites.
 Other related websites for theories.
 Previous thesis works from CEPT University library.

INTRODUCTION

Real Estate
Real estate is property comprised of land and the buildings on it, as well as the
natural resources of the land, including uncultivated flora and fauna, farmed
crops and livestock, water and mineral deposits.
Real Estate can be broadly categories into the following types:

Residential Real Estate Commercial Real Estate Industrial Real Estate

Land

Considering the topic under study, the residential real estate is broadly
categories as:
 Bungalows: They are independent houses that can either be stand-
alone (private built and owned) or a group of independent houses
build by developers, forming a society. The bungalows are either
single or multi floored (generally up to 2 floors).

 Row Houses: Row houses are series of houses which has similar
plans and located side by side to adjacent houses and shares a
common wall. They are different from villas as they are joined by
common walls. The design pattern, architecture, and appearance are
similar.

 Low rise residential building: These are residential units that consist
of around four to five floors with a common area and other amenities
for the residents. It has multiple residential units in each floor with all
the facilities required for living.

 High rise residential building: These are residential units that have
similar facilities and planning like that of low-rise buildings, however
consist of ten or more floors.

 Townships: They have facilities and infrastructure like a town where

all civic amenities such as roads, water, electricity, school, healthcare
units, garbage disposals, parks, recreational centre, etc. are provided
within a gated community. These are residential complexes
constructed either by the government or by private realtors and
usually situated within suburbs.
Real Estate Market of India

Real Estate industry is one of the most prominent service sector industry in
India. Along with accredited as being fast growing, it is also the 4th largest
sector in terms of Foreign Direct Investment (FDI) inflows. The FDI sector
stood at US$ 24.66 billion from April 2000 to September 2017. India has
witnessed rapid urbanisation in the last decade, as a result of which, it is
projected that about 600 million people will be living in urban areas by 2031.
By 2028, India’s real estate market size is expected to increase by 7 times. The
Indian real estate market is expected to touch US$ 180 billion by 2020. The
housing sector alone contributes 5-6 per cent to the country’s Gross Domestic
Product (GDP). In India, real estate is the second largest employer after
agriculture and is slated to grow at 30 per cent over the next decade. Also,
India’s rank in the Global House Price Index has jumped 13* spots to reach
the ninth position among 55 international markets, on the back of increasing
prices in mainstream residential sector. Also, the real estate is a $150 Bn
industry, which has a significant effect on the nation’s GDP. Marketing and
sales have a significant effect on the real estate industry and the strategies
adopted by the developers play a vital role in deciding the country’s economic
health.
 Figure 2 Real Estate market growth in India

The unsold inventory in various metro cities range anywhere between 15-
60%. The current realities don’t go hand in hand with the stipulated growth
of the industry, hence marketing the product would play a very significant
role in the near future. Also, marketing has been a niche and unexplored
field when it comes to real estate. This calls for a need to dwell deeper into
the marketing aspects of the industry
 Figure 3 Unsold Inventories in major
Indian cities

1.5.1 Marketing – Real Estate’s Perspective

Marketing, as defined by the American Marketing Association, is “the activity,
set of institutions, and processes for creating, communicating, delivering, and
exchanging offerings that have value for customers, clients, partners, and
society at large”. In simpler words, it is anything and everything that introduces
a product in a market.

In general, the marketing process includes correlation of 4 basic elements,

also known as the 4 P’s of marketing:
1. Identification, selection, and development of a PRODUCT.
2. Determination of its PRICE.
3. Selection of a distribution channel to reach the customer.
4. Development and implementation of a PROMOTIONAL
STRATEGY.

The Real Estate Market System

 Parameter
s THE GENERAL ECONOMY

Objectives,
Criteria REAL ESTATE MARKET

Constraint
THE COMPANY
Decision
Variables

The above figure explains the real estate system very aptly. The general
economy of the country defines its real estate market realities. The
economic parameters coupled with the real estate market lay the foundation
for the objectives and project criteria of the developer. The economic
factors along with the market serve as constraints, which further define the
decisions made by the company. The approach to marketing starts with
quantifying and understanding the need of consumers considering the
constraints and economic parameters

What is a Marketing Strategy?

It’s often said in the world of marketing that to sell a product, one must cater
to a need or create one. However, this does not stand true for real estate
product. Here, the need defines the supply and not vice versa and hence it is
very important to study the micro and macro factors affecting the needs of the
consumers and catering to the on-going trend instead of developing residential
units that are not demanded by the consumers. Failing to do this leads to
increasing levels of unsold inventories which are a threat to most of the
developers in metropolitan cities as of today.
 NEED SUPPL
Y

CUSTOMER MARKETING STRATEGY DEVELOPER

Figure 5 Marketing Strategy Schematic

QUESTIONNAIRE 1: A questionnaire designed to understand the needs of

consumers and the factors affecting their behaviour as consumers.

1 Name
2 Gender
 Male
 Female
3 How old are you?
 >20
 20-35
 36-50
 51-65
 <65
4. Home city
5. What is your educational qualification?
 Below 10th standard
 12th pass
 Graduate
 Post Graduate
 Others (specify)
6. What is your current profession?
 Retired
 Private Employee
 Government Employee
 Business
 Other (specify)
7. What is your approximate total family income?
 Less than or upto 5 lakhs per annum
  5 lakhs to 10 lakhs per annum
 10 lakhs to 25 lakhs per annum
 More than 25 lakhs per annum
8. Have you ever purchased Real Estate?
 Yes
 No
9. (Only if answered ‘No’ to the previous question) Do you plan to invest in the
near future?
 Yes
 No
10. If you answered ‘Yes’ in either of the previous two questions then, in what
types of Real Estate have you invested or plan to invest in?
 Residential apartments/Flats
 Independent house/Villa
 Commercial Office/Business
 Land
11. In which type of city would you like to invest?
 Tier I (eg. Mumbai, Bangalore, Delhi, Kolkata, Chennai etc)
 Tier II
 Tier III
12. Please select your budget?
 More than 2cr
 1cr-2cr
 50 lakhs-1cr
 Less than 50 lakhs
13. According to you which is the best option for investment?
 Real Estate
 Stock Market
 Mutual fund
 Gold
 Fixed deposit/Commercial Bonds
14. Please select the key reason for investing in Real Estate?
 Investment
 Retirement Planning
 Life Style Change
  Tax Shelter
 Diversifying risk
 Business/ Commercial purpose
 Others(Specify)

15. How many BHK you would preferer to purchase?

 1BHK
 2BHK
 3BHK
 More than 3BHK
16. Type of project preferred?
 Under construction
 Ready to move project/completed project
 Resale property
17. Type of area preferred for new residence?
 Posh area
 Developed area
 Developing areas
 Outskirts of city
18. Please select any two most important factor that affect your choice to buy
new house?
 Price
 Location
 Brand of developer
 Distance from work place
 Connectivity/Transport facility availability
 Distance from work place
 Amenities
19. Please select the two important channel which help you to look for Real
Estate projects?
 Channel partner/broker
 Newspaper/hoarding Ads
 Telle calling/personal selling
 Sponsoring events
  Digital Marketing
 Referral/ word of mouth
 Real Estate website (eg. Makaan.com, 99acres.com, magicbricks.com)
19. How would you rate the following factor on how highly they
motivate/demotivate you to invest in real estate (PLEASE ANSWER FOR
EACH FACTOR)
 Faster than expected rises in Interest Rates
 Property is overpriced, a bubble waiting to burst.
 Global economy slowdown
 A change in government policy that makes property less attractive.
 Return on investment(expect property prices in the area to rise)
 Local political instability
 Overbuilding leading to excess supply.
 Tax exemptions
 Reputation of the Builder(Timely completion, trustworthiness)
 Rise in Personal/family income
 Ease of availability of finance
 Rental opportunities
 Location and connectivity of property
 Need for more space(increase in size of family)
20. Do the current slowdown of economy demotivate you to invest in Real
estate.
 Yes
 No
21.Did the COVID-19 pandemic impact you investing in Real Estate?
 Yes
 No

QUESTIONNAIRE 2: An interview questionnaire to understand the existing

marketing techniques used by developers and analyse their investments and
planning in marketing/advertising.
 1. Name of the Developer
2. Year since inception
3. Type of Real Estate you are involved in?
 Residential apartments/Flats
 Independent house/Villa
 Commercial Office/Business
 Land
4. Cities in operation
5. Projects completed in Mumbai
6. Ongoing project
7. Current unsold inventory
8. View on last decade of real estate trends in Mumbai
 Positive
 Stagnant
 Negative
9. What factor had affected the real estate industry?
 Demonetisation
 RERA implementation
 GST implementation
 Economy slowdown
10. Do you have separate teams/experts for marketing sales and sales?
11. How would you rate the following channel for sales and promotion?
 Channel partner/broker
 Newspaper/hoarding Ads
 Telle calling/personal selling
 Sponsoring events
 Digital Marketing
 Referral/ word of mouth
 Real Estate website (eg. Makaan.com, 99acres.com,
magicbricks.com)

14. How would you rate the following factor on how highly they
motivate/demotivate investor to invest in real estate (PLEASE ANSWER FOR
EEACH FACTOR)
 Faster than expected rises in Interest Rates
  Property is overpriced, a bubble waiting to burst.
 Global economy slowdown
 A change in government policy that makes property less attractive.
 Return on investment(expect property prices in the area to rise)
 Local political instability
 Overbuilding leading to excess supply.
 Tax exemptions
 Reputation of the Builder(Timely completion, trustworthiness)
 Rise in Personal/family income
 Ease of availability of finance
 Rental opportunities
 Location and connectivity of property
 Need for more space(increase in size of family)
18. Please select any two most important factor that is important for any
project?
 Price
 Location
 Marketing strategy
 Connectivity/Transport facility availability
 Amenities

15. Do you think that global economy slowdown and COVID-19 pandemic
will impact the sales and Real Estate industry?
16. Do you think websites creates an impact on consumers?
17. What are your views on digital marketing effectiveness?
 Very Effective
 Effective
 Not effective