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A shift in the customer mindset?

  • Published at 04:06 pm May 12th, 2020
A shift in the customer mindset?
Once the pandemic is over and everything normalizes, people will be more aware of their living situation and the people who live in close proximity

The product real estate provides to its consumers is not something that can be completed in a month. A project may take four-five years

It is a widely accepted fact that the best way to ensure your business stays in the profit margin is to rightly predict the changing trends of your consumers’ needs and provide services or products that are in line with that need. Every business of every sector needs to understand the current requirements of its customers or consumers as well as know how they might change in the future.

Even if a need remains the same, preferences will not.They evolve and morph into something different every once in a while. And the real estate industry is not immune to that either. So, while housing is a fundamental and basic need that is always present, the type of home —in regard to orientation, design and price —varies.

From luxurious premium projects to more moderate housing options, the demand for real estate in Bangladesh has shifted a number of times in the last few decades — especially since the rise of apartment living in cities.In the earlier days, most developers focused on building apartment projects that were more akin to modern-day condominiums with lots of homes and a multitude of facilities. But more recently, the spotlight was on providing the best deal to customers where necessary amenities of comfort are married with affordability — as is, or better yet, was the prevailing demand before the coronavirus crisis hit.

The reason for using past tense here is because the world we will inherit once the pandemic is over will be quite different from the one we occupied before. There is going to be change all around. So, the question is, will there also be a big shift in the housing market in the way customers think before buying a property?

A change does not happen without some significant reason behind it — there is always a catalyst. The shift from villa type houses to apartments in Bangladesh was prompted by the scarcity of constructible land within cities and the rising cost of property purchases. And the shift from premium housing projects to affordable ones were stimulated by a shift in the lifestyle of people.That is why the question asked is as valid as it is appropriate for the situation we find ourselves in at this very moment.

The coronavirus pandemic is showing the citizens of the country how easy it is for an infectious disease to spread within their communities. A great portion of the population lives in very close proximity to each other and that closeness is amplified in cities where a five-six katha plot of land may easily house over a hundred people. That is why we may see a rise in popularity of gated communities or spacious homes in the very near future —where villas maybe making a comeback if the conditions are right.

In the recent edition of Bproperty Talks: Real Estate Reality, Bproperty CEO Mark Nosworthy mentioned that once the pandemic is over and everything normalizes, people will be more aware of their living situation and the people who are living in close proximity to them — i.e. neighbours. Solitude will not be the move forward, but a bit of separation might be where areas such as Uttara and Bashundhara Residential Area gain even more prominence among prospective home buyers.

Another change that we may see in the near future is people transitioning to the outskirts of the cities from where they can commute to their workplaces relatively easily without compromising their immediate safety, security and seclusion. But that may only be permittable if all the conditions such as office location and transportation are in favourable conditions and they can actually afford such properties, as these tend to be more on the expensive side.

But nonetheless, that is a scenario for down the line.That is because the real estate industry is a slow-moving segment of the economy. As Nosworthy puts it:“The product real estate provides to its consumers is not something that can be completed in a month. A project may take four-five years.”

From understanding a change in the need to conceptualization to actually meeting those needs takes several years in the least with up to six or seven years if the project is enormous. And that is something even consumers know and accept.But what then happens to the current needs of the people? Do they put off their decision to buy a home for three to six years or do they continue on with their buying decision with the properties that exist today?

Many of the people that had decided to engage with real estate prior to the pandemic have invested several years of their lives, saving little by little with the intent of purchase.They also may have endured a lot of hardship and stress to reach that final point.Their need outweighs the solutions of the future, and that is why they will continue to engage with the properties that are available today — not wait the four or five years necessary for the real estate landscape to change.

However, while direct consumers may continue on, investors will look ahead, to the future. Every industry needs to change to keep pace with the demand of its consumers. And as a shift in the mindset of future real estate buyers takes place, the industry needs to invest in the type of properties that will be required. It needs to take the next five or 10 years into account and build accordingly.

Yet, neither everyone will be able to afford such properties nor will they be willing to change. And that is where the challenge for the housing sector will lie —finding the right balance between the shifting and existing mindset of the people.As a result, even though there is a change in the mindset of prospective buyers when looking to purchase homes, the change is not immediate and the change will take time to implement.

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