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5 things home buyers are looking for?
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A e Yo Marke e y? 5 Things Home Buyers Are Looking For
ith ri sing sophistication in Indian business
and commerce, consumers have matured too.
In particular, the middle class tha t can make
or break your business, more often than not,
knows what it wants ! The phenomenon of horne-buying has
lransformed from a sociol privi lege to a fundamental bourgeo is
reali ty. The migh t of the Indian middle class is now world
renown ed and a testimony to this can be found in book titles
such os- " Ind ian M iddle Cla ss ", "G reat Indian M iddle C lass
" which are stacked on bookshelves around the globe. Rising
incomes, g rowing product awareness and the inform ation
age have created a new middle cla ss thot wan ts more than
just a roof over their head. W hile the current market with
severe sho rtage of supply in the residen tia l market creates
grea t opport unities for rea l estate developers ond builders,
the competit ion among suppliers continue s to remain stiff .
We have la id this argument out in our ar ticle in the previous
issue o f CREDAI magaz ine : global players have hod a sniff
of Ihe opportunities in Ind ia. Wharton business school, in
2007, quo ted on Ind ian real eslate industry leader talking
about many growing realty firms in Indio that aspi re to spread
nationally. They bring with them new products and op tions
for the India n buyers. Are our realty firms cognizant of their
markets; or are they just "go ing with the wind? " . Wi ll this . , '
tendency keep them competitive forever? Evide ' t
not! Instead of making assumptions about their
-viood Singh & Minu Agarwal
markets, they should proact ively be finding ways 10 understand
the radically transformin g nature of thei r clientele. Buyers
today are concerned ab out the loca tion, aesthetic factors,
open areas and have more accurote de mands. A lthough still
a sma ll fraction of the whole pie a grow ing number of them
are buying homes from an investment perspect ive al so. In this
article we list the psyche of todoy's rea l estate buyers in India
and what is it that they core about.
1. Reputation, Reputation, Reputation: Elsew here lhe
mantra of buying real estate might be - ' loca tion, loca tion,
location" but for the Indian home buyer it seemsto be 'reputation,
reputa tion, reputation' - of Ihe
buil I tha t i . According
I a stu y (c ndLi led by
Track2 Realty) a major ity of the home buyers is not satisfied
with their respective pr ivate develop ers. Builder' s reputat ion
builds on the promises of construction material s ond finishes,
open areas and the transparent demarcation of super area
and the built-up area . Buyers want to be w ith a trusted bu ilde r;
this prevents delay in pro ject execution, focilitates possession
at the scheduled time and delivers the prami ses laid oul in
the agreement. Buyers are abl e to justify the cost premium of
goi ng 10a reputed builder with the assurance of transporency
in product delivery process. Buyers toda y not only read their
newspape r doi lies ar ask their friends and relat ives when
buying a house but tr ey also have access to a vast paradig m of
online socia l networ ks and forums for feedb ack. O nline wo rd
of-mouth recommendations (or red alerts) empowe r the buyer's
decision making. tt is increasingly important for developers to
scan their 'online' imag e, 'hear' what people are saying ab out
them and make sure they stay in the good books.
For upcoming deve lopers this is a gold en oppo rluni ty to
build a nome for them by crea ting loyal customers. That is
possible thraug h o n-li me delivery of promises and quality
control eyeing long term benefits. liquida ted da mage cla uses
are features that a grow ing number af sophistica ted buyers
have star led asking for. W ith recent turmoil in the securitized
real estate rno rkels in Indio foreign buyers, in pa rticula r, are
mare co ncerned aboul the risk-versus-rewa rd equ ation of
lndicn realty. Builder reputati on for them is, definit ely, one
of Ihe top items in assessing the risk. Remember, it does not
matter whether il is your first project or the fiftieth; bui ldi ng
goad reputat ion and reliability star ts 0 1very small things. For
example, if yaur website promises "exce llence" then it must
not have typos on il!
2. The right administrative region: W ith sa many
new developments and future promi ses
crapping up everywhere and numerous pro jects slorting from
ground zero in new areas, it is hard for buyers to foresee what
their neig hborhood wi th look like in the coming yea rs. W ill
their neighborhood be a thnvinq center of urban energy or
w ill it be surrounded by empty dusty roods? The developme nt
outhority ploys a key role in del ivering promisesof green areas,
road infrostructure & water supply ond this can be used as a
selli ng poin t. And this market is very efficient; meani ng your
prospective buyers are aw are of such plans. If there is on
airport or stodium planned in the master-pion of the area, i'
is likely thai the investment in infrastructure wi ll come throug h
ond this will a ttract buyers to the area.
In thi s co ntext, however, it is a lso important to consider
who your prospective buyers are and who best fit a certain
administra tive regi on . or example, first-home buyers who
intend to be dwellers will think of short term prospects (1 -2.5
years) of developm ents in and a round that area which will
make tr eir life easier ofter the possession. An Investor mind,
on the o ther hond , wi ll be look ing for return on investment ond
may exhibit larg er patience in the developm ent time/ine of the
local ity in order to enjoy more competitive pri cing .
3. De sign features: Homes today ore not just0 basic necessity
but make a persona l statement on behalf of the owner. O ffering
oppo rtunities to the buyer to do so, w ith design ond layout of
the house is as importont as whe re Ihe house sits. Study ing the
current trends can help idenlify the righ t architect and designer
for the project and de liver a produ ct thai will crea te on impac t
in the buyer's mind . Moreover, although anecdo tal in nature, it
is proven that demograp hic profile (age, gender, occupation,
income level, education level, language, etc) have significant
e ffe c t o n desig n preferences. However, more accurale
understand ing of these
factor s requires car eful
d ota co llec tio n that
we ho ve discussed
in the p revious issue.
Hordware filtings, tiles,
po ints and finishes can
be 01 ig ned with the tasle
o f the b uyers usually
01 a small incremental
cost, so why not? The
plan of the house can
also make it more (or
less) attractive. Ask your project pla nner if open kitchens are
becoming popular? Are people interested in environment friendly
finishes? What can create the illusion of more space?
Stories that developers failed to deliver on the "brochure
promises" of funky swimming poo ls a nd golf co urses is qui te
common place in Indio. Prom ise them someth ing tha t can truly
ottroct them and let you ccpture an additiona l residua l market
demand . How many midd le class buyers rea lly care to have a
go lf course? Carefully deta iled plans have la rger impa ct than
Greek words engraved w ith vibro nt colors in your brochure.
4. Fair Price - Remember, althoug h cos t-conscious, the Indi an
middle class in not necessar ily looking for "chea per" dea ls.
After al l, they wont to pay as much as wi ll keep them socia lly
co mpetitive in the neigh bo rhoo d. Yet, they wa nt the pri ce to
do justice to what they buy a nd thei r love far a ba rga in is
unparo lleled . In spi te of that, "di scounts" ar e no t something
that you should count on for your marketing strotegy. It has
been found that buyer s today are increasingly spend ing mare
and mare time com paring prices in nearly al l purchases they
make. W ith Ihe internet a t han d, the [ob of comparing could
not have been easier. And which one o f your compe titors is not
affer ing a d iscount? So, a " 10% off" tag on nearl y every thing
on the market does not a muse the customer (althoug h, s/he
is still looking for it! A we ll ed ucated, awa re customer may
nol toke the bait espec ia lly after the pro ject has been on Ihe
morkel for some time. If di scounts a re 'rea lly 'o ffered; it rniq hl
make sense to put a pri ce by showing campa robl es.
S. Branding : India n home buyers have never been more
brand-co nscious. Influx of internol ional brands plus the rising
pride in Indian ide ntity crea te a unique blend of wo nts and
desires. However, brand ing ca n be ca rr ied across many
levels In real eslo le indus lry. Unfortun ately, for rnosl
Indi an developers, bra nd ing rema ins
, U Cl ' Y
limited up 10 the domain of print-rnedio
and web-pub l ishing . Brandi ng co uld
be mor e stra teg ic;
there is so much more to if. Loca tio n cou ld be one aspect . A
prestigi ous loca tio n w ill a ltract the g roup o f buyers who are
looking for a specific lifestyle outside their home more so than
wi thin their home. That does not mean that yo u should build
only in South Delhi or M .G . Roads. But it means that aport
from assig ning a jazzy nome to you r a partment co mplex,
Iry to blend it wi th the surround ing in such a fashion that
your pro jects becomes a respecled, inseparable part of the
"place bra nding". C reate a synergy w ith the neigh bori ng
propert ies and leverage on if. Brandi ng can a lso be introduced
in arc hitec tura l sty le, a menities o ffered and, of course,
esta blishing a strong con nection between how you nome the
proj ect and what all features it has. " Hollywood Towers" wilh
Rajastha ni chhotris co uld potent ially be a bro ndi ng d isaster.
Bra nd ing is always done wi th a target buyer in mind a nd so
ag ai n, the target buyer must be clearly delineated. When the
right b randed property meets the rig ht buyer, it is a match
made in heaven.
A ll this being said; it wou ld be da ngerous to lump a ll Indian
buyers in to one bo g. A ltho ug h there are man y ca mmon
g rounds of decision ma king lo r the Indian middle closs, there
are all kinds of peo p le at di fferent stages of li fe, with d ifferenl
budgets and ob jectives. To crossthe barri ers o f the markel, the
best a developer can do is to know his mar ket really well.
The authors, Vinod Singh & Minu Ag arwal , are partners 01
realism.lN . Rea lism.INTM is a pa rtnership of entrepreneurs
from India and the United Slates striving to provide high qual ity
know ledge backbone to the real estate business in India . The
firm provides eLearning a nd resea rch services and products
a imed exclusively at Ind ian rea l esta te. To explore more about
rea lism.IN, please visit http://www.rea lism.in
.. · r alis .1
I Brosius, C. (2009) . Indio's Middle Closs: New Forms 01 Urban Leisure, Consumption and Prospe rity (Ciries ond
the Urban Imperative). Indio: Routledge .
} Varma, P K. (2007). Greol Indian Middle Closs.
Penguin Books Indio Pvl. Ltd.
.3. Des, P., & Sharma, D. (2010). Are You Fu'ure
Ready?: 5 Steps 10 building an "Information Edge"
in Real Eslate. CREDA I-Reol Eslale Review , 38-39.
M (J r c h 2 0 I 1
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