So, what happens in a property market where an increasing number of its buyers are unable to afford the property available? You then have developers competing with another with various tools in their belts, branding and advertising being one as such.
Most of us are aware of branding that is done for the products and services that we consume and its subtle powers in affecting us when making decisions. For businesses, branding’s effects are measurable qualitatively and quantitatively. Brand awareness and brand association are how customers relate to the branding of a company.
There are many examples of companies that do branding really effectively to the extent that many consumers can associate certain traits with certain brands. When you think of Apple what comes to your mind? Like most, you’d think of their Macs and iPhones and how innovative they are. When you think of Perodua, you think, economical, reliability and low maintenance cars.
If branding could affect most aspects of our life, it could well-certainly impact one of our most basic needs ever – shelter. Property developer EcoWorld is one example. With its core centred on sustainability, the developer is seen to have a leg up compared to its competitors in incorporating sustainable development into its projects, which does its brand a great boost, being viewed as a pioneer in creating smart, green cities and communities for the future.
However, the other quantitative purpose of branding is to be used as a means of increasing sale, both in short and long term. But, the most challenging aspect of the Malaysian property market today is that the growth of property prices has far exceeded the growth of salary increments of wage earners, thus making them less affordable. The STAR (2019) reports that property market is slowing for the year, and while prices are decreasing, they remain expensive and exclusively available for the ultra-wealthy.
So, what happens in a property market where an increasing number of its buyers are unable to afford the property available? You then have developers competing with another with various tools in their belts, branding and advertising being one as such, to attract sales. Should you flip through a newspaper or a magazine or scroll through your Facebook feed right now, you will most likely be bombarded by glossy advertisements of the latest attractive residential projects, with catchy and too-good-to-be true (sometimes) offers.
What developers should realise is that we (buyers) cycle through a series of considerations (P.D.F Framework) before even deciding to purchase a property, and branding has a role to play at each consideration.
Despite there being new project launches by many property developers priced at the mid-range, the amount of unsold residential properties in Malaysia is on the rise. In fact, the Edge (2018) reports that the sharpest increase of unsold properties are those less than RM300,000, from 12,000 units in 2015 to 32,000 in 2018.
Thus, the deciding factor for many buyers would be the price of the property itself. Branding arguably has the least amount of influence here, and is only effective when coupled with an attractive offer (special price package, etc.) or if pricing is always a selling point for the developer, and is part of their personality trait and their projects (think AirAsia, Giant, Walmart etc.).
Here is where branding starts playing a more important role. Good branding for property developers must display its success track records and their deliverability as buyers will be assured that the developer that they are buying from will be completing the projects in time and follow-up with post-sales services. Developers must be aware of competition and that buyers have a multitude of good developers and projects to choose from in Malaysia and thus, not unjustly price their offerings.
A study done among Malaysians by Cheok and Cheng (2008) reveals that while 90% of consumers preferred buying properties from well-known developers, 80% do not equate price with quality. In fact, 76.5% of Malaysians from the study disagree purchasing expensive property when similar ones are available at a cheaper price, a sentiment that is reflected in the chart above.
Many customers buy into the atmosphere of a housing estate or the portrayed overall living concept of the property. Here, branding arguably has the greatest role to play. Cheok and Cheng reveal (2008) that we assign traits like sophistication, class, professionalism, trendiness, secureness to property developers and the projects that they have. These traits are seen as more distinguishable as part of the developers’ marketing mix, rather than by price, which is harder to compete with amongst themselves.
Often enough, if price is deemed fair and developer is seen as trusted, framing and focusing on certain external features will often turn the tide for developers in attracting sales. Young couples, for example, are often persuaded by playgrounds, gyms, gardens and generous open spaces, writes iProperty (2018), even turning a blind-eye on graveyards or oxidation ponds nearby.
In conclusion, branding does help sell houses (or anything, in fact). In fact, property developers should focus on developing their brand and tailoring their message to their intended audience. But, at the same time, developers should show an understanding for the demographic they are serving by reflecting on how they price their projects if they don’t want their unsold units to be part of the statistics shown above.
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