In our final developer series of 2018, Nerida Conisbee, Chief Economist of REA Group, provided an insightful presentation on trends in the Melbourne market. REA Group regularly commissions research into the property market, and the following article presents findings of some of their most recent research.
Each year realestate.com.au commissions bespoke consumer research into the new homes market, exploring the behaviours and attitudes of off-the-plan apartment buyers. The objective of this national research is to uncover what developers and project marketers can do to ensure their communications stand out with buyers in an ever-changing market.
During February Mike Gill, realestate.com.au’s Market Research Manager for new homes, presented the highlights of this research with over 800 property professionals across Australia via the annual Developer Insights Series. We’ve summarised the highlights for you.
Buyers of new apartments have historically spanned three segments – First Home Buyers, Downsizers and Investors – with an interesting new segment emerging in the last 12 months, in the form of Upsizers. As land becomes more expensive, and harder to come by in some urban centres, apartment living offers an affordable solution to buyers looking to upgrade but not willing to compromise on location.
Interestingly not all buyers who identify themselves as Upsizers are young families. The leading life stage for apartment Upsizers was ‘Singles Living Alone’ at 24 percent, closely followed by ‘Singles Living with Other Adults’ and ‘Couples with Mainly School-aged Kids’ both representing 18 percent. Most apartment Upsizers are under 44 years of age, with 37 percent between 25 and 34 years. Upsizers are typically tertiary educated and over a third have a budget upwards of $800,000 for their off-the-plan apartment purchase.
Knowing what buyers are looking for is key to developing successful projects. There’s a lot of competition for buyers’ attention, and the research uncovered that 80 percent of buyers considering new apartments were also considering established property. Understanding the motivations and concerns of each segment and talking to their wants and needs will help you get your development onto their shortlist.
For new apartment buyers, modern features, cost savings and flexibility to choose the floor plan were the common perceived benefits of buying off the plan, and this trend has been observed for the last two years. Downsizers were found to have slightly differing priorities, reflecting the life stage they’re in – 81 percent of apartment Downsizers are aged 55+ and 52 percent have no children living at home – perhaps being in the process of selling the family home. These buyers are driven by the property meeting current safety standards, sustainable features and energy efficiency, and the fact that no one has lived there before. Reduced maintenance and repairs are also important benefits Investors and Upsizers sought. On the flip-side, one of the most common frustrations for buyers was finding an apartment that was the right size and configuration for them. This was especially the case for Owner Occupiers who were looking for more spacious accommodation.
When it comes to project amenities, apartment buyers were most interested in shared outdoor living facilities such as BBQ areas, gardens and decks. Coming in as the second most popular with buyers was storage. Buyers were drawn to projects that offered storage cages in the basement and additional storage within the apartment itself or on the floor of the apartment. Outdoor pools were also popular with buyers in all states, except in Victoria, where the weather can be cooler and indoor heated pools were preferred. In New South Wales and Queensland, fully equipped gyms are attractive, and this was something First Home Buyers are also drawn to.
Car parks are important to new apartment buyers with 45 percent willing to pay extra to ensure they secure one with their property purchase. Home automation was also popular, and First Home Buyers, Upsizers and Investors would pay extra for this to be incorporated in their new apartment. For Downsizers, they were most interested in upgrades and were prepared to pay extra for premium floor coverings, kitchen appliances and kitchen bench-tops.