In July 2022, the team at Capital Properties identified that lifestyle had become increasingly important to Aussie home buyers in our blog post: The big shift in Australian demographics. In that post we predicted that this trend would continue to grow, along with a push for eco-friendly builds and green energy. Well, not quite a year later, we’re back to confirm that lifestyle is the number one driver of the property decision making process.
In today’s blog post we’ll examine what’s causing this shift towards lifestyle-friendly living and what buyers are actually thinking and feeling when they make the decision to purchase a lifestyle property. And we’ll share tips on how to choose properties that will appeal to lifestyle buyers.
We also discuss property trends and make sure you’re well placed to take advantage of them during our free Capital Properties Discovery Session. And if you’re already managing one or more investments, remember that our Pinnacle Support Program will keep you moving in the right direction.
As always, the Capital Property Investor Tools are available to help you with your property investment journey.
On the go? Here’s 30 seconds of take outs:
- Environmental factors affect purchasing decisions, e.g. population growth means more demand.
- Although location is key, buyers are looking away from cities and shifting towards lifestyle, and ideally beach living.
- Properties that offer prestige, status and great design are more important to buyers now than ever before.
- There are 7 factors that drive the property decision making process:
- Emotion
- Cultural superstitions
- Perceived value
- First impressions
- A home that tells a story
- Social proof
- The ideal lifestyle
Keep reading >>
Predicting the property market
Before you call us soothsayers, we’ll be honest and tell you the key to our accurate prediction has nothing to do with magical fortune-telling and everything to do with research.
In our role as your Property Investment specialist advisors, we spend many hours looking at market trends, past and present. We regularly examine sales data across all Australian states and territories and investigate what’s happening in each market.
That includes looking at what infrastructure projects are in the works or planned. If the demographic of a certain area is shifting, key industry changes, etc, etc. And we look to experts like Bernard Salt for their take on Australian geographic and demographic culture. Again, we’ve discussed Bernard before in the blog: The big shift in Australian demographics.
What drives the property decision making process?
If lifestyle is the number one driver of the property decision making process, then what’s driving this? As always, there are multiple factors at play.
Looking back we can see how environmental factors affect our purchasing decisions. For example, in the first half of the 2010s, a surge in population meant that not enough homes were built to keep up with demand. International students poured into city centres and foreign investor demand soared.
Almost suddenly, apartment construction boomed. With more than 700,000 new apartments, units and townhouses built across Sydney, Melbourne and Brisbane in that decade, along with more than a million houses!
But each of these purchases was motivated not only by necessity, but by desire. Yes, people need places to live, but what drives people to choose one area or one property over another? What really drives the property decision making process?
What are home buyers looking for?
Of course, almost every home purchase starts with the location. Even if the requirement to move is driven by relationship changes, work opportunities, investment potential or lifestyle aspirations. The first consideration is usually…where?
The new flexibility of working from home for many people post pandemic has caused a significant shift in where people choose to live. Because the need to be close to work is less important, people now look for properties offering prestige and status. That means that design has become more important to buyers, within their price range obviously.
But, the truth is that the practicality of choosing where to live is always overwhelmed by the psychological factors that influence a home buyer’s decision.
When it comes to buying a home, we choose with our hearts, not our heads!
The property decision making process
Some years ago, CoreLogic (Australia’s leading provider of property data and analytics) reported that there are 7 psychological factors that drive the property decision making process. And believe it or not, location and price don’t get a look in!
Instead, the 7 factors that drive the property decision making process are:
- Emotion
- Cultural superstitions
- Perceived value
- First impressions
- A home that tells a story
- Social proof
- The ideal lifestyle
1. Emotion
Although it’s useful for home buyers and in particular, investors, to keep their emotions in check, it’s naive to think we won’t have an emotional response when purchasing property. It’s why the Capital Properties team invest so much time in property market research and created our Goal Setting Guide, amongst many other Property Investment Resources to keep you on track and focused.
But, for the average home buyer, emotions take over. In fact, in past surveys, a significant amount of Australian home buyers reported that they were happy to pay more for a property if they “really liked it”.
2. Cultural superstitions
OK, most of us Aussies think we’re not the most superstitious bunch, but at the same time, you’ll rarely meet a person brave enough to light three cigarettes with the same match. And many of us would think twice about buying house number 13.
Whereas the number 4 is considered to be bad luck in some cultures, because it sounds like “shi” which translates to death in Mandarin. So, it’s still relevant to keep superstitions in mind as an essential part of the property decision making process.
3. Perceived value
It’s only natural that buyers want to get the biggest bang for their buck. Walking into a well-presented house will appeal to most buyers because they know they won’t be faced with any unexpected expenses in the near future. But buyers that spot damp patches in ceilings or musty smelling carpets will be immediately suspicious that the property could turn out to be a money pit – i.e. everyone’s worst nightmare!
4. First impressions matter
First impressions matter, because they last far beyond that first moment. This is due to something called the ‘primacy effect’, which means that when we’re exposed to a sequence of things, we tend to remember the first thing the most.
And when we think about first impressions of a property, we’re talking curb appeal, natural light, a clean uncluttered environment, and quality furnishings/fittings.
5. A home that tells a story
As investors, we tend look at properties using a more logical frame of mind, often using tried and tested formulas to select properties without acknowledging any sentimental attachments. However, we need to be mindful that buyers WILL have an emotional response to the home – and we want it to be a good one.
Buyers love to hear about the history of the house, or if the property is new, create a story about the area it’s been built in. Hearing stories about the designer/ builder designing a specific corner for the Christmas tree to be positioned, or how the kitchen’s been designed for an enthusiastic home chef, can make a real impact on the property decision making process. Painting a picture of the lifestyle the buyer is aspiring to is a winning strategy.
6. Social proof/ Testimonials
People don’t buy from businesses; they buy from people. And we want to know that the people we’re buying from know their stuff and are trustworthy. That’s why social proof from past/existing clients is so important. Bad reviews are bad for business, but good reviews will reassure buyers that they’re making the best decision.
7. The ideal lifestyle
Last, but certainly not least – buyers aren’t just purchasing a house, they’re investing in their ideal lifestyle. Right now, and for the foreseeable future, that means sea-changes for a large portion of the Australian population.
As we discussed in The big shift in Australian demographics, and The great interstate migrate, Aussies are migrating to beach side living more than ever before. People are looking away from the city as their centre point and getting as close as they can to the relaxed beachside locales. At Capital Properties, we’ll advise you how to choose properties that will appeal to lifestyle buyers.
Now that you know that lifestyle is the number one driver of the property decision making process, we can help you find the property that delivers on this. Simply contact Capital Properties today.
Book a free Discovery Session to find out more and let us help you achieve future financial security.
