Pitch your property to the right audience
If you have a home worth more than R1m to sell, your marketing should be aimed at people over 60 years of age – because, as the graph shows, they are your most likely buyers. On the other hand, if you are trying to sell a property in the R600 000 to R800 000 price range, your target audience should be people aged between 20 and 30.
“One of the most valuable real estate lessons learnt in the aftermath of the recession is that properties sell much more easily and quickly when they are carefully marketed to the correct buyer audience,” says Rudi Botha, chairman of BetterBondHomeloans, SA’s biggest mortgage origination group. “A crucial factor when determining that audience is of course the income that prospective buyer would need to earn to afford to buy your property. However, our latest stats show that it is probably just as important now to target buyers of the right age.”
And this, he says, may not be as simple as conventional wisdom would suggest. “It might be expected, for example, that people in the ‘prime’ of life and at the peak of their careers in their forties and fifties would be the buyers of the most expensive homes.
“Similarly, one might think that people of traditional retirement age (60 and over) would be more likely to buy less expensive homes as they scale down to a simpler lifestyle. But in fact, as the accompanying graph shows, the average purchase price of homes bought by people between the ages of 40 and 60 has been below R1m for the past year, while the average purchase price for buyers over 60 has stayed well-above R1m.”
This says a lot, Botha notes, about how property helps to build wealth, because those purchasing higher priced properties don’t only need a bigger income but a bigger deposit too. “The average percentage of purchase price required as a deposit on a property priced at R1,5m or more now is at least 23% – compared with just over 12% for properties priced at R500 000 to R1m.
“And in most cases, these large deposits can only be afforded by older buyers who have had time to build up substantial equity in their existing homes.”
Meanwhile, he says, these findings also have major implications for the way that homes should be presented for sale – because different generations of buyers have different needs and expectations and will thus be focused on different features. “For example, empty-nesters who are over 60 might be buying more expensive properties, but they will most likely be looking for quality rather than quantity – top-class fitting and finishes, for example, rather than a very large home.
“The priority for family buyers in their late thirties and forties, on the other hand, is likely to be lots of space and good value for money, while those in their twenties and early-thirties will probably be focused more on low maintenance small homes that are well designed, wired for technology and close to work, shops and entertainment venues.”
ISSUED BY BETTERBOND HOMELOANS