Anticipating a slow down in home sales in the coming months in the wake of the crackdown on ‘black money’, housing.com will restart its rental classifieds business soon.
The portal, which had seen an ugly spat between founder Rahul Yadav and investors two years ago, had shut its rental listing last year to focus on the more lucrative home sales segment.
However, said the website, the current crack down on black money is likely to impact sales of new homes, and it is therefore re-entering the rental segment ahead of schedule.
“Last year, Housing.com had taken a strategic decision to close Rentals in order to focus the Company on the Home Buying and Selling segment, the largest and the most lucrative real estate category in India… While the Company had planned to relaunch rentals towards end of next year, the government’s recent demonetisation move has led to an advancement in the plans,” it said, adding that it will relaunch rental listings early next year.
“Demonetisation is expected to cause a slow-down in the Home Buying and Selling segment, while it will likely spur growth in the home rentals space, making it an opportune time to relaunch the rentals business,” it said.
Indian real estate sector had seen rising prices for the last three decades as it served as a relatively safe way to park undeclared earnings of individuals. Unlike shares and bank deposits, real estate developers were willing to take cash ‘off the record’ from buyers, and officially declare a lower figure as the transaction amount.
However, the current government at the center — headed by Narendra Modi — has announced its intention to go after undeclared and untaxed income and savings. This is likely to reduce the attractiveness of real estate as a savings instrument.
The dual-function of real estate sector as a place to live in as well as a place to park illegal funds had caused much frustration among salaried classes. While the investors wanted the prices of properties to rise higher and higher, the ‘inhabiters’ wanted the prices to remain affordable.
When Housing.com was founded in 2012, rentals was one of the key focus areas for the company. At the time of discontinuing rental operations, Housing.com was a leading player in the segment.
The main driving force behind the websites intuitive design, an IIT-graduate named Rahul Yadav, had thought up the concept of listing properties on a map, as well as providing photographs of the interiors of the property on the website.
These two features helped housing.com overtake much more established players in the online classifieds industry.
However, Yadav — a talented, but not-so-diplomatic twenty-something — had run-ins with investors including Sequoia, who ejected him.
Yadav’s exit was followed by a sharp decline in the fortunes of housing.com, even as rivals copied key features such as map listing.
In a statement today, Housing.com said its decision to focus on the sales segment helped it focus its energies on its business priorities.
“The decision of Housing.com to focus its resources on the Home Buying and Selling segment has led to a business turnaround and enabled the company to establish itself as the most popular online platform for buying and selling homes. Compared to last year, on a monthly basis, the Company’s revenues have grown by 400%, operating costs have decreased by 70%, traffic has increased by more than 200% growing from 1.3M to 4.1M and number of homes listed have increased by over 450% growing from 110,000 to 630,000, making it the most popular platform for both home buyers and sellers,” it said.