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Look beyond the demographics to find what buyers really want: Peter Chittenden

It’s just over 12 months since the results of the 2011 census were released and at the time it was impossible to escape news about how old the population was becoming, what areas were popular, what incomes and education levels were making the grade, plus much more. We were all very excited to be reading so much information about, well how can I put this, about ourselves.

Thanks to the ABS, the industry has always had access to a large amount of demographics data, but I think it is great to always stop and ask what’s the consumer’s perspective?

What expectations do consumers have when they consider buying a home regardless of the prevailing economic or social environment? Are we delivering what they are looking for? Is the market excited about our products or is it simply being driven by a desire not to miss out on this or that new development?

There is one subject that I always find myself thinking about is and that point asks: is there enough attention paid to what consumers think, or are the raw numbers and hard facts just given too much importance?

While price, place and time are the three big factors that influence almost all consumers in the housing market, there are endless, more personal, more local and possibly less predictable options to ponder.

Price and value for money, while possibly the most obvious and easy to observe influences, are still open to varied interpretation. From a buyers view there may well be more flexibility than we give credit for, and if we look at many other consumer markets, then we do see that design trends are very fluid very responsive.

Emotion is also a key element and even at the high end of a market an emotional connection with a property can relegate price down the scale of importance. Or is the role of emotion simply over-stated and should the idea of a willing but not over anxious buyer, dealing with a willing but not anxious seller always be the rule?

In most circumstances price is frequently the central concern of most buyers. While we are now well beyond the GFC, I think that in some parts of the market the GFC acted to make buyers much more price focused, much more sensitive to debt and price is now related to being comfortable with how much buyers can afford to borrow. Not having to worry about finance is not common.

 


Historical data is important and over time almost all real estate improves in price, but at any point in time it needs to be affordable in the context of the economic environment.

If the market is in pain, if prices are seen as falling then buyers will know that. But in either a tough or healthy market it appears that emotion is a factor and buyers will post GFC still be found paying unexpected prices to get a particular property or to be part of a popular new development.

Incomes, interest rates, employment and an entire range of settings all act to influences prices. This applies to any market and like the one we now see in mid-2013, a lack of supply and very low interest rates are a power influences.

Also currently improved incomes from the share market are important, while a general recovery in superannuation returns always makes us all feel a little better, more secure.

However it is true that after price there are many other influences. Today more then ever transport and access to essential facilities make buyers much more selective and as we have been discussing with pocket infill land estates.

Employment is clearly another a big issue, not only the potential access to employment, but the security of employment. Lenders and buyers are both job sensitive and this is fact that may well become more central over the next 12 months and is set to be a driving factor in the NSW market with jobs associated with construction expected to grow at a pace not seen for some years.

But it can also be a combination of issues that are much less complex, much more day-today issues, that influence buyer behaviors and how they experience the marketing benefits of particular developments. Some markets simply take off and others do well but sell at a much slower pace.

Research is always of value and an understanding of demographics a good starting point for a successful development and marketing campaign. But a first hand view of what buyers want and what they are currently looking for is essential; this is a fast paced environment so we need to be up-to-date.

What makes one area more appealing than another can sometime come down to some very simple factors. While some major issues like access to employment, transport, shopping and schools will always be important, at times other less complex factors can provide an incentive for particular buyers to consider one area or development over another.


Peter Chittenden is managing director for residential of Colliers International.


Peter Chittenden

Peter Chittenden

Peter Chittenden is managing director for residential of Colliers International.

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