National online real estate company REA just recently released some results based on research that they conducted on a national level with 12,618 apartment buyers (of which there were 415 respondents – on par with a poll).
PropertyESP has reviewed this information, from a marketing perspective, which is one of our key areas of strength.
Firstly, what was very interesting to note, was the increase in WA owner occupier buyers in the apartment market since 2015, which grew from 41% to 60% in 2017.
When considering the mix of apartments in any development, it is imperative to consider your local demographic profile and even undertake research in the marketplace to understand what this market is seeking. We have known many developers to be stuck with one bedroom apartments, while the three bedrooms sold first. While one bedrooms may give a higher yield – this is only the case, if they in fact sell!
30% of these buyers were also considering townhouses in conjunction with apartments with the intent of reducing the amount of maintenance time, as would be expected, from a traditional home. As such apartment developers don’t just face competition from other apartment developments – but other small housing options as well, such as townhouses.
The research indicated that the time of conversion to sale was approximately 4.5 months. 43% of the buyers were also reading something related to property on a daily basis and hence this tends to demonstrate that regular social media posts/e-news are able to assist with promoting your project in this realm. This is especially so if you need to nurture buyers over a 4.5 month period.
Buyers were interested in market insights, advice about buying off the plan and apartment designs and amenities in the property related literature.
When asked what were the benefits of buying off the plan, respondents indicated:
- Locking in current market price (49%)
- Modern features (47%)
- Brand new – no one has lived there (45%)
- Cost savings (45%)
- Customised finishes (45%)
- Flexibility to choose floor plan (40%)
However what restricted their decision to buy off the plan included:
- Unexpected costs/going over budget
- Funding the purchase
- The stress of construction
- Not knowing what to expect
When asked what influenced the purchase of their apartment, respondents indicated:
- Price (62%)
- Location (49%)
- Developer’s reputation (48%)
- Access to public transport (46%)
When asked what amenities buyers were looking for, respondents indicated:
- Storage in the car park (64%)
- Fully equipped gym (42%)
- Outdoor entertaining spaces (42%)
74% indicated that some kind of incentive influenced their purchasing decision, with 62% indicating a preference for the developer to pay stamp duty, 58% stating free upgrades and 45% a rental guarantee period. However this is not always the case and we have witnessed projects in Perth, which have in fact put up their prices in the last six months. In contrast some areas are oversupplied and hence incentives are a sales tool to generate traction with some buyers. Again it is on a suburb by suburb analysis.
What was also interesting to note was how buyers evaluate a developer’s reputation. 54% quoted the developers track record with previous projects, 40% indicated a long history in the market and 30% positive word of mouth. On that basis companies need to be mindful of not just marketing their projects but also their company brand. It all ties in together.
If you are, like us, excited about the future of the Perth apartment market and you are keen to gain a competitive advantage, please contact Sam to discuss further at firstname.lastname@example.org.