evolving property buying behaviors company proprietary and confidential national real estate...

Evolving Property Buying Behaviors

Company Proprietary and ConfidentialNational Real Estate Convention

Dr Gerard Kho, Futurist, DehincAsia

What are the purchasing behaviors today?

What drives buyer behaviors?

What to watch out for in anticipating the changes in changing consumer patterns?

How do we more effectively reach & influence these buyers?

Food for Thought…

Where Data Comes FromCentral Agencies

UNITED NATIONS

Source: PropertyGuru, Research data of Google research 2013.

7-step Purchasing Process in MY

63% are Investors & 1st Time Buyers

Source: IPSOS 2013 & 2014Base: 630 Malaysian property seekers

Understanding the Drivers that Could Impact Buying Process

• Population growth• Migration patterns• Urbanization• Labour workforce participation• Personal income• Fertility rates• Household sizes• Life expectancy• Literacy• Communications• Investment into Communications• Productivity• Energy • Transport• Infrastructure• R&D Investments

Source: PropertyGuru & Research data of Google research 2013.

Today’s Buyer Behavior: Price & Location Key Concern NOT Size or Type of Property

Price: Decreasing Savings Level Since 2008…..Savings is now less than 30% of GDP dropping after 2008 and has not recovered since then

Source: World Bank

Savings as a percentage of GDP (%)

Household Consumption Rising Since 2008…Consumption has escalated steadily since 2008 primarily due to housing costs increased post 2008

Household Final Consumption Expenditure (% of GDP)

Source: World Bank

Consumption is Anticipated to Increase with GST?GST will lead on to increased costs of properties and general consumption

Source: International Futures

Good News: Everyone’s Income Is Set to Rise Good news is that income is anticipated to increase in an accelerated manner


Excess Savings Should Still Be Increasing?Does this mean that savings could be negatively impacted because of increased burden from GST?


Population (millions)

1980 2010 2050

SE Asia 359 593 759

Cambodia 6.5 14.1 19

Indonesia 150.8 239.9 293.5

Malaysia 13.8 28.4 43.5

Myanmar 32.9 48 55.3

Philippines 47.1 93.3 154.9

Singapore 2.4 5.1 6.1

Thailand 47.5 69.1 71

Vietnam 54 87.8 104

Source: United Nations, World Population Prospects

Location: Population + Urbanisation Growth

Urbanisation (%)

1975 2000 2050

SE Asia 23.3 38.2 65.4

Cambodia 4.4 16.9 43.8

Indonesia 19.3 42 65.9

Malaysia 37.7 62 87.9

Myanmar 23.9 27.8 62.9

Philippines 35.6 48 69.4

Singapore 100 100 100

Thailand 23.8 31.1 60

VietNam 14.6 24.3 54.9

+160m SEA people in 40 years…

+22m SEA urbanites in 40 years…

2015 – 2020: 3m Moving to Urban AreasGood news is 3m people anticipated to move to urban centres (same as what’s happened in the previous 5 years)


But Urbanization to Reach Saturation Point in 15yrsHowever, the urbanization would start to slow down in about a decade, could this impact demand?


Moving is No Big Drama, so could Open Up New Urban Centres

Mobility Could Fuel Migration and Extension of Boundaries of Cities……….



Today’s Buyer Behavior: Size or Type of Property NOT a Major Concern

Property Size: Population Will Increase But at Slower PaceHowever, because of the slower rate of population increase compared to previous decade could mean demand for properties could be impacted


And Population Growth will Hit a Plateau by 2050Impact of slowing population will be felt even earlier – in next 20 years time


Birth Rates Drops but Stabilises fr 2040 onwardsMore people choose to have less children


Less Infants in Absolute Numbers


Does the Future Buyers Really Want/Afford More Space/ What Would this Mean for Future Demand?

Good news: Labour Force Continue Growing so Purchasing Capacity Could Still Grow

Size of work force increase until 2045 and then starts to dwindle


Good News: 1.2m Joining Workforce in Next 5 yearsLast 5 years, 1.2m joined the workforce (the same growth as last 5yrs). Demand thus should remain strong. Females contribute 3% every decade last 2 decades.


Female Participation in Workforce Biggest Growth, so Would Women Affect the Types of Properties Demanded


Reaching/Influencing the Buyers: Malaysians Allocate 2-3 months to Search & View


Online Is Primary Source For Property

78% uses Property Portal as key source of information

97% of property

seekers search for property

online

www.

In Singapore: 95% of property seekers search

for property online; 72% uses Property Portal as

key source of information

In Thailand: 97% of property seekers

search for property online; 62% uses Property Portal as

key source of information

In Indonesia:95% of property seekers search

for property online; 74% uses Property Portal as key

source of information

Source: IPSOS

Global Online Landscape

Internet Penetration Growing Rapidly

2005 2006 2007 2008 2009 2010 2011 2012 20130

10

20

30

40

50

60

70

80

Singapore

Malaysia

Thailand

Indonesia

Per

cen

tag

e (%

)

Source: World Bank

Literacy is no Longer an Issue….


Better addressing the needs of property seekers during these info search and consideration stages, help drive conversions

Source: IPSOS 2013 & 2014Base: 630 Malaysian property seekers

Internet Speed in AsiaHuge room for improvement…. Imagine when our internet speed is like HK!

Investment into ICT Sector as % of GDPMY is focused in this area……


Influence Buyers Where They can be Engaged….

Not Forgetting that the >65yrs Population Keeps Growing


Don’t Forget the Seniors……

Source: Google “Our Mobile Planet”

Almost ¼ of Mobile Users Search For Property

Which Part of the House Is Gaining Importance?

Infra Investment into Mobile Broadband in MalaysiaHighest investment is into Broadband Mobile for the next 15 yrs


Access to Mobile With BroadbandImportance of mobiles


Mobile Broadband per 100Convergence of the new frontier….


Huge Potential for Growth to Connect with Buyers…Online Consumption Leads Ad Spend

Internet as % of total media consumption time

45% 42% 22% 28%

Internet ad spend as % of total media ad spend

9%18% 4% 7%

Source: Nielsen, ADMA Digital Marketing Handbook(2014)

SINGAPORE

AUSTRALIA

MALAYSIA INDONESIA

THAILAND

60%

52%

Company Proprietary and ConfidentialPost-GST The Real Impact on Buyers: Tomorrow’s Trends Today

Summary

evolving property buying behaviors company proprietary and confidential national real estate...

Documents

years source

general consumption

household consumption

world bank consumption

search process

type of property topic

world banksavings

evolving property