The property industry is changing again before our eyes and developers are starting to take notice. I’ve been working in the property industry for over 20 years in various countries and I have experienced a few down periods in my professional life. I was on the front line when the GFC hit the property industry in both Australia and the United States back in 2007 and in 2011, I experienced first-hand the bursting of the Chinese property market.
When I started my professional life as an interior designer in California during the mid 1990s, the market experienced a great boom and as a result companies started to grow very rapidly. Companies that formerly comprised 5-10 people all of the sudden were employing over 100 people. There was an enormous amount of work and everyone was moving fast. I was a young designer back then and I remember asking my old boss if we could do something more original and she said, ‘no Lorena we have to move quickly so adjust the design from this client to the other by changing one quick colour’. This tends to be a very typical trend during a booming real-estate period because things just sell, and little effort is necessary to attract buyers.
During this booming period, I established my own design practice back in 2000. At 24 years of age I was turning over millions of dollars a year working for developers in various states such as, California, Arizona, New Mexico, Oregon, Washington and Nevada. The ride was a bit short because in just 6 years my company went from rapid growth to rapid decline. The projects on the calendar started disappearing, developers started closing down, and others were reduced to bankruptcy. Because of this decline, I immediately restructured my business and remodelled my strategy to expand internationally into markets like China and Australia. In Australia, I started my business fitting out apartments for sale because I was importing furniture at a great value and developers could no longer afford local retailers’ long-lead times and high prices. Yet, eventually the GFC hit Australia hard and shortly after the decline was inevitable.
During the American and Australian property decline, China was experiencing a great boom and so I shifted my gears and focused on the Chinese market. This move allowed me to continue with my satellite offices in Sydney to facilitate the business with China whilst retaining operations in the USA.
I am sharing this story to give readers an insight into the typical rise and decline cycles in real-estate. This cycle has a 7-10 year period and whilst it is inevitable, the key to ride the wave is to adjust, re-think, re-invent, innovate and be prepared. It is based on the rule of all evils when supply increases inevitably the demand will decrease and we must be prepared.
Technology plays a major role amidst the ever-changing trends of the property/real-estate industry. In the 1990s when satellite cable became a household staple, we saw the rise of design influencers such as Martha Stewart, Ralph Lauren, Tommy Bahama, Tommy Hilfiger and this in turn spurred businesses to develop products to suit an aspirational niche. In the 2000s during the dot com boom, product-based websites played a major role because people started to see other options in the local market and homebuyers started demanding better product at a better value.
The early 2010s saw a dramatic rise in online businesses which led consumers to became very knowledgeable about cost of product, manufacturing, and the international market reach. As a result developers started to look outside of the local market and international products became more accessible in real-estate. It is at this point when people started to discover European brands like Miele, Boffi, Poliform, among many others and so international brands became the new it thing.
Today, we would all agree that everything is starting to look the same once again. We see the same materials utilised, the same vendors and the same colour schemes. But guess what? Buyers are starting to take notice and competition has become more intense. This tells us that consumers want more than European brand names, more than just a fancy building name that sounds like a perfume fragrance, and more than just out designing the next-door neighbour. It is a snoozefest out there and it is time to re-ignite the market.
We have reached a point where brands are not just the thing to go after, aspirational influencers are not the only ones with a voice and global online sales have reached an all-time high. Therefore, just as retailers have evolved and embraced new ways to attract and retain consumers, the real-estate industry will start to follow consumer fashion and beauty trends. In this climate, social media plays a major role and omni channels are implemented in order to promote and connect with potential home buyers.
Just like the fashion industry, people are connecting with product digitally, via social media, image based and non-celebrity influences. I don’t foresee people buying homes online any time soon, although It could be a possibility in the near future. The common trend is a ‘story based’ sales approach, where people gain knowledge of the products they are purchasing, and the role it plays socially in both the environment and the community. Consumers are doing their research and dangling a small bait in front of them is not going to cut it. It is not just about a brand, it is not just about a name, it is not just about the aspiration. It is about creating something authentic with value.
Authenticity is what will mark this new cycle in the property industry – it is about the wellbeing of the people and the social impact consumers have in this new era. You will see that true innovation will be successful through responsible marketing. This means that people will start demanding community-based environments, products and materials that can improve their health, great design at a good value, and technology features as a standard package. Ultimately this is because nowadays materials like tiles, carpets, cabinets, appliances, furniture and electronics can be bought online and thus developers have to add value to people’s lifestyles through other means. Real-estate agents have to sell more than just a home. They have to connect with buyers by explaining how a property can improve their lives whilst educating consumers about new technologies utilised during construction in order to close a sale.
How we will come out of this transitional period is by starting to design from the inside-out and not the other way around as has been done for decades. Interior designers are playing a major role nowadays in improving people’s lives in health, education, business and the housing industries and the collaborative efforts between design and architecture is what is helping progressive developers shape the cities of the future.