12 Essential Steps To Working Out Your Target Market In Property Development
Your site has development potential, it looks relatively easy to build on and the zoning favours you. So what do you actually build? What do you need to know to ensure that it doesn’t go horribly wrong? We’ve got some of these things wrong in the past and it makes a big difference to do this research first or you’ll pay for it in the long run by either not getting the premium you deserve or things taking longer to sell than you’d like – which ultimately costs your project.
Getting your product right is one of most important aspects of being successful as a developer. It’s often overlooked and not very well considered. Though it is becoming harder and harder to hide behind shoddy developments as the levels of sophistication and expectations has risen substantially in the last decade.
Below is a checklist of things we research when studying any location and identifying exactly what to build.
First we need to understand the population make up and its trends where possible. Its important to look at the relativity of this in terms of growth, stability and some assessment of where we believe the trend will go in the coming years.
We normally compare the statistics of a particular area with the wider region a basis for comparison so we can establish whether there are any trends we can observe and cater for.
We dig further and look at the age make-up of the area and again how this compares to the city average.
What is the growth forecast for the area and does it look like its going to have demand and remain a desirable place to live? Some of the points below will have a bearing on how desirable the area is and will be in the future.
2. Household Size
This is an important factor because it determines what is happening in the area in terms of the size of the household in the area relative to the city average. Where we see a household size that differs from the city average, it provides us with an insight of potential housing sizes that suit this area.
3. Existing Housing Stock
This helps determine the level of demand and whether there is a lack (and therefore potential underlying demand) of housing and more so a particular typology or housing type.
As the demographic makeup changes over time, so too does the preference for housing types and therefore an opportunity (as a developer) to provide a housing type that may not be well catered for in this location.
4. Crime & Safety
According to a recent national study, crime and safety was ranked the number 1 priority when deciding on where to live and therefore the housing choice.
You can compare this against the city average and make your determination whether you feel this is a safe or not so safe area and therefore design your solution around that. It informs your development design.
5. Income & Occupations
Income is an important measure and is available through the census data. Along with this is occupations which also provides a detailed picture of the make-up of the community and housing needs for that particular group.
Also, with income comes affordability and it helps to give you some measure as to what can be afforded in the area. In areas with lower incomes, pricing is far more sensitive, so the housing choice becomes more basic and functional.
6. Owner Occupier vs Rented
Housing tenure tells us how many owner occupiers vs rented accommodation is in the area. And you should compare this to the city average.
7. Means of Transport
How people use modes of transport is useful as it helps build a picture of how people travel in the location.
Transport links are important. As mentioned, given the importance of mobility, getting to and from work, school and other functions of life, transport links are crucial. Look at your closest links to the motorways and main arterial routes. The easier it is to access these routes / links the more valuable and desirable the places become.
There comes a point of course, that being too close or right on the doorstep of such links has a reverse effect as pollution (noise and emissions to name just two) have an opposite effect on desirability.
Bus stops, train stops are also important to note as these are becoming increasingly popular for some as are walk and cycle ways for those who can access them.
Families hunt these areas out and so if this happens to be a particular market you are catering for, then the difference of being in or out of a school zone (and this could be the difference between one side of the street to the other) can have a huge impact on your end values.
10. Public Projects
Improvements and planned projects that will raise the attractiveness of an area are good to be aware about. Projects that improve the links and amenity to the area are going to help the desirability of the area and will gradually increase demand for housing in that area, as people become aware of them and are attracted to the improved conveniences provided.
11. Parks, Recreation & Waterways
Map the nearest locations for parks and recreation. These are less critical given many people have access to public or private transport but can command a premium nonetheless. Not least locations close to the sea.
12. Shopping & Restaurants
This is important particularly for the older demographic who prefer convenience greatly. And will pay a premium to be closely situated to modern conveniences.
So once you have built a picture of the residents and demand in the area, you can start to design your housing solutions for them. Are you building for empty nesters or first home buyers? Security is a hugely prized feature if you can offer it, particularly for the empty nester market. But it still remains valuable across the entire demographic spectrum.
Get your product right.