Buyer demographics are changing - are we keeping pace with the change?
I had a very interesting conversation with a client of ours today about targeting the right demographic of buyers utilising - amongst other avenues - the Facebook advertising algorithm which allows an advertiser to target potential buyers based on factors such as their age, geographic location, interests and consumer behaviour.
It got me thinking about how the way in which we advertise our clients’ properties has changed beyond recognition over the past 15 years. It used to be that if you wanted to appeal to a buyer in the finance industry, there were print publications which catered for this. Similarly I remember advertising in London-based property magazines that were printed exclusively in Russian. These publications largely reflected the demographic of buyers who were dominating the market at any given time, and as you can imagine, either don’t exist any longer or perhaps soon won’t.
Fast forward to 2019, the heady pre-2008 days of banker bonuses driving double digit year on year growth in Prime Central London are gone. Similarly a number of factors (sanctions, tighter anti money laundering regulations) have stemmed the flow of buyers from the former communist Soviet states. Lastly, both the incremental increases in Stamp Duty since 2012 and the political uncertainty since 2016 have changed the buying patterns of UK buyers, probably forever.
Traditionally the London ‘new homes’ market has relied on both downsizers looking for more practical long term housing solutions (lateral ‘stair free’ living in addition to benefits such as security, underground parking and leisure facilities) and foreign buyers either looking for a London base or straight investments.
The post banking crisis tech boom (Uber, Airbnb, Netflix, Instagram, WhatsApp etc) has led to a new type of wealth creation – and with it a new generation of young entrepreneurs whose property wish lists are very different from mature, more established money.
These buyers aren’t generally speaking looking for the same thing as their older, downsizing counterparts. They’re happy to live in the parts of London which might have historically been considered slightly secondary – think Fitzrovia, Marylebone and Shoreditch as opposed to Holland Park, Mayfair and Knightsbridge - and their taste is usually more minimal cool than maximal luxury.
So where does that leave clients with properties in established locations, which have been interior designed with established wealth in mind, who are now trying to appeal to a whole new demographic of buyers who perhaps aren’t valuing the same things?
It’s a harder path to traverse for everyone; developers, agents and even the buyers themselves. Whilst the property portals still rule the market for new enquiries, are they ready for what’s likely to come next? After all, the likes of Facebook, Google and Amazon are going to continue to disrupt the property advertising model with smarter algorithms and eventually the introduction of voice search - “Alexa, find me a home to buy near Regents Park” – it’s coming!
Director at Aston Chase