A e Yo Marke e y? 5 Things Home Buyers Are Looking For

ith ri sing sophistication in Indian business

and commerce, consumers have matured too.

In particular, the middle class tha t can make

or break your business, more often than not,

knows what it wants ! The phenomenon of horne-buying has

lransformed from a sociol privi lege to a fundamental bourgeo is

reali ty. The migh t of the Indian middle class is now world

renown ed and a testimony to this can be found in book titles

such os- " Ind ian M iddle Cla ss ", "G reat Indian M iddle C lass

" which are stacked on bookshelves around the globe. Rising

incomes, g rowing product awareness and the inform ation

age have created a new middle cla ss thot wan ts more than

just a roof over their head. W hile the current market with

severe sho rtage of supply in the residen tia l market creates

grea t opport unities for rea l estate developers ond builders,

the competit ion among suppliers continue s to remain stiff .

We have la id this argument out in our ar ticle in the previous

issue o f CREDAI magaz ine : global players have hod a sniff

of Ihe opportunities in Ind ia. Wharton business school, in

2007, quo ted on Ind ian real eslate industry leader talking

about many growing realty firms in Indio that aspi re to spread

nationally. They bring with them new products and op tions

for the India n buyers. Are our realty firms cognizant of their

markets; or are they just "go ing with the wind? " . Wi ll this . , '

tendency keep them competitive forever? Evide ' t

not! Instead of making assumptions about their

-viood Singh & Minu Agarwal

markets, they should proact ively be finding ways 10 understand

the radically transformin g nature of thei r clientele. Buyers

today are concerned ab out the loca tion, aesthetic factors,

open areas and have more accurote de mands. A lthough still

a sma ll fraction of the whole pie a grow ing number of them

are buying homes from an investment perspect ive al so. In this

article we list the psyche of todoy's rea l estate buyers in India

and what is it that they core about.

1. Reputation, Reputation, Reputation: Elsew here lhe

mantra of buying real estate might be - ' loca tion, loca tion,

location" but for the Indian home buyer it seemsto be 'reputation,

reputa tion, reputation' - of Ihe

buil I tha t i . According

I a stu y (c ndLi led by

Track2 Realty) a major ity of the home buyers is not satisfied

with their respective pr ivate develop ers. Builder' s reputat ion

builds on the promises of construction material s ond finishes,

open areas and the transparent demarcation of super area

and the built-up area . Buyers want to be w ith a trusted bu ilde r;

this prevents delay in pro ject execution, focilitates possession

at the scheduled time and delivers the prami ses laid oul in

the agreement. Buyers are abl e to justify the cost premium of

goi ng 10a reputed builder with the assurance of transporency

in product delivery process. Buyers toda y not only read their

newspape r doi lies ar ask their friends and relat ives when

buying a house but tr ey also have access to a vast paradig m of

online socia l networ ks and forums for feedb ack. O nline wo rd­

of-mouth recommendations (or red alerts) empowe r the buyer's

decision making. tt is increasingly important for developers to

scan their 'online' imag e, 'hear' what people are saying ab out

them and make sure they stay in the good books.

For upcoming deve lopers this is a gold en oppo rluni ty to

build a nome for them by crea ting loyal customers. That is

possible thraug h o n-li me delivery of promises and quality

control eyeing long term benefits. liquida ted da mage cla uses

are features that a grow ing number af sophistica ted buyers

have star led asking for. W ith recent turmoil in the securitized

real estate rno rkels in Indio foreign buyers, in pa rticula r, are

mare co ncerned aboul the risk-versus-rewa rd equ ation of

lndicn realty. Builder reputati on for them is, definit ely, one

of Ihe top items in assessing the risk. Remember, it does not

matter whether il is your first project or the fiftieth; bui ldi ng

goad reputat ion and reliability star ts 0 1very small things. For

example, if yaur website promises "exce llence" then it must

not have typos on il!

2. The right administrative region: W ith sa many

new developments and future promi ses

crapping up everywhere and numerous pro jects slorting from

ground zero in new areas, it is hard for buyers to foresee what

their neig hborhood wi th look like in the coming yea rs. W ill

their neighborhood be a thnvinq center of urban energy or

w ill it be surrounded by empty dusty roods? The developme nt

outhority ploys a key role in del ivering promisesof green areas,

road infrostructure & water supply ond this can be used as a

selli ng poin t. And this market is very efficient; meani ng your

prospective buyers are aw are of such plans. If there is on

airport or stodium planned in the master-pion of the area, i'

is likely thai the investment in infrastructure wi ll come throug h

ond this will a ttract buyers to the area.

In thi s co ntext, however, it is a lso important to consider

who your prospective buyers are and who best fit a certain

administra tive regi on . or example, first-home buyers who

intend to be dwellers will think of short term prospects (1 -2.5

years) of developm ents in and a round that area which will

make tr eir life easier ofter the possession. An Investor mind,

on the o ther hond , wi ll be look ing for return on investment ond

may exhibit larg er patience in the developm ent time/ine of the

local ity in order to enjoy more competitive pri cing .

3. De sign features: Homes today ore not just0 basic necessity

but make a persona l statement on behalf of the owner. O ffering

oppo rtunities to the buyer to do so, w ith design ond layout of

the house is as importont as whe re Ihe house sits. Study ing the

current trends can help idenlify the righ t architect and designer

for the project and de liver a produ ct thai will crea te on impac t

in the buyer's mind . Moreover, although anecdo tal in nature, it

is proven that demograp hic profile (age, gender, occupation,

income level, education level, language, etc) have significant

e ffe c t o n desig n preferences. However, more accurale

understand ing of these

factor s requires car eful

d ota co llec tio n that

we ho ve discussed

in the p revious issue.

Hordware filtings, tiles,

po ints and finishes can

be 01 ig ned with the tasle

o f the b uyers usually

01 a small incremental

cost, so why not? The

plan of the house can

also make it more (or

less) attractive. Ask your project pla nner if open kitchens are

becoming popular? Are people interested in environment friendly

finishes? What can create the illusion of more space?

Stories that developers failed to deliver on the "brochure­

promises" of funky swimming poo ls a nd golf co urses is qui te

common place in Indio. Prom ise them someth ing tha t can truly

ottroct them and let you ccpture an additiona l residua l market

demand . How many midd le class buyers rea lly care to have a

go lf course? Carefully deta iled plans have la rger impa ct than

Greek words engraved w ith vibro nt colors in your brochure.

4. Fair Price - Remember, althoug h cos t-conscious, the Indi an

middle class in not necessar ily looking for "chea per" dea ls.

After al l, they wont to pay as much as wi ll keep them socia lly

co mpetitive in the neigh bo rhoo d. Yet, they wa nt the pri ce to

do justice to what they buy a nd thei r love far a ba rga in is

unparo lleled . In spi te of that, "di scounts" ar e no t something

that you should count on for your marketing strotegy. It has

been found that buyer s today are increasingly spend ing mare

and mare time com paring prices in nearly al l purchases they

make. W ith Ihe internet a t han d, the [ob of comparing could

not have been easier. And which one o f your compe titors is not

affer ing a d iscount? So, a " 10% off" tag on nearl y every thing

on the market does not a muse the customer (althoug h, s/he

is still looking for it! A we ll ed ucated, awa re customer may

nol toke the bait espec ia lly after the pro ject has been on Ihe

morkel for some time. If di scounts a re 'rea lly 'o ffered; it rniq hl

make sense to put a pri ce by showing campa robl es.

S. Branding : India n home buyers have never been more

brand-co nscious. Influx of internol ional brands plus the rising

pride in Indian ide ntity crea te a unique blend of wo nts and

desires. However, brand ing ca n be ca rr ied across many

levels In real eslo le indus lry. Unfortun ately, for rnosl

Indi an developers, bra nd ing rema ins

, U Cl ' Y

limited up 10 the domain of print-rnedio

and web-pub l ishing . Brandi ng co uld

be mor e stra teg ic;

there is so much more to if. Loca tio n cou ld be one aspect . A

prestigi ous loca tio n w ill a ltract the g roup o f buyers who are

looking for a specific lifestyle outside their home more so than

wi thin their home. That does not mean that yo u should build

only in South Delhi or M .G . Roads. But it means that aport

from assig ning a jazzy nome to you r a partment co mplex,

Iry to blend it wi th the surround ing in such a fashion that

your pro jects becomes a respecled, inseparable part of the

"place bra nding". C reate a synergy w ith the neigh bori ng

propert ies and leverage on if. Brandi ng can a lso be introduced

in arc hitec tura l sty le, a menities o ffered and, of course,

esta blishing a strong con nection between how you nome the

proj ect and what all features it has. " Hollywood Towers" wilh

Rajastha ni chhotris co uld potent ially be a bro ndi ng d isaster.

Bra nd ing is always done wi th a target buyer in mind a nd so

ag ai n, the target buyer must be clearly delineated. When the

right b randed property meets the rig ht buyer, it is a match

made in heaven.

A ll this being said; it wou ld be da ngerous to lump a ll Indian

buyers in to one bo g. A ltho ug h there are man y ca mmon

g rounds of decision ma king lo r the Indian middle closs, there

are all kinds of peo p le at di fferent stages of li fe, with d ifferenl

budgets and ob jectives. To crossthe barri ers o f the markel, the

best a developer can do is to know his mar ket really well.

The authors, Vinod Singh & Minu Ag arwal , are partners 01

realism.lN . Rea lism.INTM is a pa rtnership of entrepreneurs

from India and the United Slates striving to provide high qual ity

know ledge backbone to the real estate business in India . The

firm provides eLearning a nd resea rch services and products

a imed exclusively at Ind ian rea l esta te. To explore more about

rea lism.IN, please visit http://www.rea lism.in

.. · r alis .1

I Brosius, C. (2009) . Indio's Middle Closs: New Forms 01 Urban Leisure, Consumption and Prospe rity (Ciries ond

the Urban Imperative). Indio: Routledge .

} Varma, P K. (2007). Greol Indian Middle Closs.

Penguin Books Indio Pvl. Ltd.

.3. Des, P., & Sharma, D. (2010). Are You Fu'ure

Ready?: 5 Steps 10 building an "Information Edge"

in Real Eslate. CREDA I-Reol Eslale Review , 38-39.

M (J r c h 2 0 I 1

a

c