Transcript 04. Evolving Property Buying Behaviours – Dr Gerard Kho

Evolving Property
Buying Behaviors
Dr Gerard Kho, Futurist, DehincAsia
National Real Estate Convention
Company Proprietary and Confidential
Food for Thought…

What are the purchasing behaviors today?

What drives buyer behaviors?

What to watch out for in anticipating the changes in
changing consumer patterns?

How do we more effectively reach & influence these
buyers?
Where Data Comes From
Central Agencies
UNITED NATIONS
7-step Purchasing Process in MY
Source: PropertyGuru, Research data of Google research 2013.
63% are Investors & 1st Time Buyers
Source: IPSOS 2013 & 2014
Base: 630 Malaysian property seekers
Understanding the Drivers that Could Impact
Buying Process
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Population growth
Migration patterns
Urbanization
Labour workforce participation
Personal income
Fertility rates
Household sizes
Life expectancy
Literacy
Communications
Investment into Communications
Productivity
Energy
Transport
Infrastructure
R&D Investments
Today’s Buyer Behavior: Price & Location Key Concern
NOT Size or Type of Property
Source: PropertyGuru & Research data of Google research 2013.
Price: Decreasing Savings Level Since 2008…..
Savings is now less than 30% of GDP dropping after 2008 and has not recovered since then
Savings as a percentage of GDP (%)
Source: World Bank
Household Consumption Rising Since 2008…
Consumption has escalated steadily since 2008 primarily due to housing costs increased post 2008
Household Final Consumption Expenditure (% of GDP)
Source: World Bank
Consumption is Anticipated to Increase with GST?
GST will lead on to increased costs of properties and general consumption
Source: International Futures
Good News: Everyone’s Income Is Set to Rise
Good news is that income is anticipated to increase in an accelerated manner
Source: International Futures
Excess Savings Should Still Be Increasing?
Does this mean that savings could be negatively impacted because of increased burden from
GST?
Source: International Futures
Location: Population + Urbanisation Growth
+160m SEA people in 40 years…
+22m SEA urbanites in 40 years…
Population
(millions)
1980
2010
2050
Urbanisation (%)
1975
2000
2050
SE Asia
359
593
759
SE Asia
23.3
38.2
65.4
Cambodia
6.5
14.1
19
Cambodia
4.4
16.9
43.8
Indonesia
150.8
239.9
293.5
Indonesia
19.3
42
65.9
Malaysia
13.8
28.4
43.5
Malaysia
37.7
62
87.9
Myanmar
32.9
48
55.3
Myanmar
23.9
27.8
62.9
Philippines
47.1
93.3
154.9
Philippines
35.6
48
69.4
Singapore
2.4
5.1
6.1
Singapore
100
100
100
Thailand
47.5
69.1
71
Thailand
23.8
31.1
60
Vietnam
54
87.8
104
VietNam
14.6
24.3
54.9
Source: United Nations, World Population Prospects
2015 – 2020: 3m Moving to Urban Areas
Good news is 3m people anticipated to move to urban centres
(same as what’s happened in the previous 5 years)
Source: International Futures
But Urbanization to Reach Saturation Point in 15yrs
However, the urbanization would start to slow down in about a decade, could this impact
demand?
Source: International Futures
Moving is No Big Drama, so could Open Up
New Urban Centres
Mobility Could Fuel Migration and Extension of
Boundaries of Cities……….
Source: International Futures
Today’s Buyer Behavior: Size or Type of Property NOT a
Major Concern
Source: PropertyGuru & Research data of Google research 2013.
Property Size: Population Will Increase But at Slower Pace
However, because of the slower rate of population increase compared to previous decade
could mean demand for properties could be impacted
Source: International Futures
And Population Growth will Hit a Plateau by 2050
Impact of slowing population will be felt even earlier – in next 20 years time
Source: International Futures
Birth Rates Drops but Stabilises fr 2040 onwards
More people choose to have less children
Source: International Futures
Less Infants in Absolute Numbers
Source: International Futures
Does the Future Buyers Really Want/Afford More
Space/ What Would this Mean for Future Demand?
Good news: Labour Force Continue Growing so
Purchasing Capacity Could Still Grow
Size of work force increase until 2045 and then starts to dwindle
Source: International Futures
Good News: 1.2m Joining Workforce in Next 5 years
Last 5 years, 1.2m joined the workforce (the same growth as last 5yrs). Demand thus
should remain strong. Females contribute 3% every decade last 2 decades.
Source: International Futures
Female Participation in Workforce Biggest Growth, so Would
Women Affect the Types of Properties Demanded
Source: International Futures
Reaching/Influencing the Buyers: Malaysians Allocate 23 months to Search & View
Source: PropertyGuru & Research data of Google research 2013.
Online Is Primary Source For Property
97%
www.
of property
seekers search
for property
online
78%
uses Property
Portal as key
source of
information
In Singapore:
In Thailand:
In Indonesia:
95% of property seekers search
97% of property seekers
95% of property seekers search
for property online;
search for property online;
for property online;
72% uses Property Portal as
62% uses Property Portal as
74% uses Property Portal as key
key source of information
key source of information
source of information
Source: IPSOS
Global Online Landscape
Internet Penetration Growing Rapidly
80
70
Percentage (%)
60
Singapore
Malaysia
50
Thailand
40
Indonesia
30
20
10
0
2005
Source: World Bank
2006
2007
2008
2009
2010
2011
2012
2013
Literacy is no Longer an Issue….
Source: International Futures
Better addressing the needs of property seekers during
these info search and consideration stages, help drive
conversions
Source: IPSOS 2013 & 2014
Base: 630 Malaysian property seekers
Internet Speed in Asia
Huge room for improvement…. Imagine when our internet speed is like HK!
Investment into ICT Sector as % of GDP
MY is focused in this area……
Source: International Futures
Influence Buyers Where They can be Engaged….
Not Forgetting that the >65yrs Population Keeps Growing
Source: International Futures
Don’t Forget the Seniors……
Almost ¼ of Mobile Users Search For Property
Source: Google “Our Mobile Planet”
Which Part of the House Is Gaining Importance?
Infra Investment into Mobile Broadband in Malaysia
Highest investment is into Broadband Mobile for the next 15 yrs
Source: International Futures
Access to Mobile With Broadband
Importance of mobiles
Source: International Futures
Mobile Broadband per 100
Convergence of the new frontier….
Source: International Futures
Huge Potential for Growth to Connect with Buyers…
Online Consumption Leads Ad Spend
SINGAPORE
MALAYSIA
INDONESIA
THAILAND
AUSTRALIA
Internet as % of total media consumption time
45%
42%
22%
28%
60%
Internet ad spend as % of total media ad spend
18%
9%
Source: Nielsen, ADMA Digital Marketing Handbook(2014)
4%
7%
52%
Summary
Post-GST The Real Impact on Buyers: Tomorrow’s Trends Today
Company Proprietary and Confidential