Usually when you hear advice about picking an area for your next development project you normally hear things like the popularity of an area, comparable prices, nearness to public transport and other amenities…
But here’s one you don’t often hear in these discussions… the buyer.
Who is the buyer?
It’s one thing to make your development attractive and accept anyone who has the money to buy it…
But another strategy is to build for a certain type of person and niche down on what they are really needing and wanting to buy.
Specifically, I’m talking about the huge mass of Baby Boomers and their eventual transition to retirement. Right now huge numbers of baby boomers are selling up their big homes and downsizing to smaller, more affordable and lower maintenance homes.
This leaves a huge opportunity to break down their big homes and big blocks and build smaller, lower maintenance townhouses.
The demographic of may baby boomers is that they have done well financially and are ready for “the good things in life”, which means that townhouses aimed at them are going to need to be of a reasonably high standard.
There was a term coined a few years ago that fits this bill… “Mass-tige”. It stands for Prestige for the masses. Yes I know it’s kind of oxymoronic but the point it that there are many finishes and designs that make people feel like they are living in the lap of luxury, but are really not a lot more to build than a residence that looks very ordinary…
And baby boomers love that stuff.
And as baby boomers continue to age and downsize there are other opportunities gaining momentum.
Take the mass-tide idea and translate that into retirement communities.
Image resort style gated retirement communities which not only cater to all the normal needs of ageing but also make them feel like they are living the good life, in perfect safety.
To be perfectly honest I’m only thinking about these things as I write this article but that what comes from looking at things in a different way.
Start looking at development opportunities from the point of view of demographics instead of the usual location/comparable sales and it gives you different results in terms of your possible solutions.
You’ve heard me say before to just do what you know others have done successfully because there’s no point in reinventing the wheel. These opportunities are by no means reinventing anything.
In fact I keep an eye on what others in my industry are doing and one of the biggest players Harry Trigubof of Meriton headed into childcare a few years back and now he’s going into retirement villages.
Because he’s noticed the same trends as I have.
These are not new ideas. I’ve already built retirement villages.
I can just see that there are levels that could be played with…
Some of these are basic and take care of the buyer’s basic needs, others could be more luxurious.
The long and the short of it, however, is that the greatest bulk of the population is forming a very predictable trend which is not only making available opportunities to source land but is also dictating the kind of projects which are going to work the best.
As this population trend keeps changing their needs are going to continue to change and its reasonably easy to stay ahead of the curve.
When you start looking at population trends, area trends, migration trends, immigration trends you start to see that there are so many opportunities out there and they all boil basically down to one key idea…
And that is to match the projects you are building to the area and audience that are doing the buying / renting.
These are the market forces and catering to those market forces is the single best way to produce projects that are going to sell or rent well and give you the best return for your buck.
It’s the same as I always say “Build what people are buying” but how you get to what people are buying is a science with many approaches.
Some strategies will give you what people are buying now but hopefully, you can see that there are also ways to work out what people will be buying in the future…
So that you can stay ahead of the curve.