By Daniel KONTIE
Last week I had a telephone call from a potential investor from the United States of America and this was what ensued. “Daniel, I want you to get a land that can build at least 100 luxury homes in a gated community at a prime area in Accra.
I have a 3million dollar investment to cash out to start with, and will top up to complete the construction of all the hundred (100) units before we start selling” he said.
I laughed in my mind and was wondering if this man is really serious. He was so enthused with the real estate investment opportunities he discovered after reading my article titled “Breaking the 90/10 Syndrome in Residential Real Estate Development in Ghana”. He was so excited to the extent that he could not even introduce himself before going into the business of day.
I could feel how passionate he was and his readiness to seize this investment opportunity. But honestly, I became worried for him because I noticed two fundamental errors in his statement about luxury residential property investment which actually informed today’s article on this subject.
First and foremost, to build a one hundred (100) luxury homes in a gated community is a fundamental error, it won’t sell. Second, to build luxury homes to 100% completion before you begin to sell is another fundamental error, that won’t sell either.
So, the question now is, why are these considered fundamental errors?. Do not go away; stay tuned as we demystify the dynamics or behavioral characteristics of the class of persons who patronize luxury residential properties in Ghana.
The purpose is to help prospective investors or developers who are nurturing interest in venturing into this particular niche in the real estate market to enable them make informed investment decisions.
But before we go into the substantive dynamics, let me first deal with the aforementioned fundamental errors raised in connection with my engagement with this prospective investor.
The number one reason why it is not ideal to build luxury homes to a 100% completion before you begin to sell is this; people who buy these properties are high net worth individuals.
This class of buyers has special tastes and preferences which may not have been contemplated or captured by the designer at the conceptualization or design stage of the property.
These luxury property buyers are particular about their taste and preferences and will always dictate what they want in the property and what they don’t. So building your custom design that may not factor in the exact features that aligns with their tastes and preferences makes it extremely difficult for them to patronize the properties.
High net worth individuals are people who have made their money and will go in for a property that has their preferred features and they don’t mind paying any price for it.
Second, these are buyers who are exclusivity conscious. They do not want to live in mass gated communities. They believe that the wealthy are few in society and they will want to associate with their fellow few wealthy compatriots.
Apart from the essentials of life, they believe that anything in mass supply is not for the wealthy. This is the reason why in affluent communities such as Cantonment, East Legon, Labone, Roman Ridge etc, you hardly find gated communities and even the few one may find, do not contain up to ten (10) properties.
Isn’t this weird and interesting about this class of buyers, but anyway that is the reality any prospective developer or investor has to come to terms with if only they want to maximize returns on their investment playing in this segment of the real estate market in Ghana.
Having said this, let us now go into the details, mind you, the religious implementation of these dynamics will make your luxury properties sell even before the construction process begin, all things being equal.
We shall be examining seven (7) behavioral characteristics among which are these; class consciousness, location consciousness, space lovers, pleasure consciousness, privacy, safety and security consciousness, exclusivity consciousness and above all, environmental and sustainability consciousness. We shall be taking these one after the other.
Class Consciousness
It is important to let you understand that buyers of luxury properties are high net worth individuals and money is not really their problem. They are not just looking for a place to lay their head; rather their focus is on prestige.
They will always like to acquire properties that stand out reflecting their perceived success and wealth for as long as it outstanding and located in an area known to be elite vicinity. So majority of these wealthy people seek homes in affluent, well-known neighbourhoods just for them to feel belonged.
This is the reason why properties built in areas such as Cantonment, Labone, East Legon, Roman Ridge; North Ridge etc will sell at any price yet will still get buyers within the shortest possible time.
Location Consciousness
Again these high net worth individuals are very conscious about the location of the property. They will always prefer properties that are in proximity to major and top-notch amenities and facilities.
For instance, these are frequent travellers and will always ask, how many kilometres is the location of the property in question to the airport, or to other amenities such as top medical facilities, schools, police stations, fire stations, the courts of law, state-of-the-art shopping malls, universal banks, forex bureaus, cimas, passport office just to mention a few.
That is why one can easily find all these facilities and even more around vicinities where these people live for instance East Legon, Cantonment, Labone, Roman Ridge, North Ridge etc.
Space Lovers
This class of buyers like to have big houses. They like townhouses or mansions with spacious compounds to park at least between 4 to 5 cars or more. The reason is many are car lovers and would like to have the newest model of any luxury car that comes, therefore the tendency to buy plenty fleet of cars is imminent.
Even the non-car lovers may still like to have 3cars at least, one for work, one for ceremonies, and one for special business meetings or occasions.
Their spouse may have at least 2 cars, one for normal business and the other for special occasions and finally, one probably for the children and the last one for running family errands. Therefore to build a luxury property targeting this class of buyers at East Legon for instance with a parking space for only 2 cars will make it difficult for this class of buyers to patronize the property.
So if you are a developer of luxury properties, you should be mindful of this, getting an affluent community or location to develop is not just enough, one must make room for a very spacious compound in order to make the property more appealing to these buyers.
Apart from making provision for a spacious car park, it is important that all other spaces such as room sizes, kitchen, storerooms, bathrooms, balconies, wardrobes, living areas, dining areas, lawn areas, window sizes etc are also as big and spacious as possible; anything short of this may lead to little or no patronage at all.
Pleasure Consciousness
Another important characteristic of this class of people is their love for pleasure, celebrations, partying etc. They celebrate everything in a grand style, from birthdays, anniversaries etc.
So they are more inclined to properties with large entertaining spaces, kitchens designed for gourmet cooking, and features that allow for hosting large gatherings or events and most times, they prefer an open home garden or roof top terrace for these parties and ceremonies.
They prioritize properties that align with their lifestyle that makes them happy and fulfilled, such as homes with private pools, gymnasiums, physiotherapy equipment, wine cellars, sports facilities, home office, libraries, sound systems and smart systems such as automated gates, remote access control systems, remote controlled window curtains, water taps, air conditioners, fridges etc. This gives them pleasure as they will need little mechanical movements to control or operate almost everything in and around the home.
Quality and Aesthetics Consciousness
Also, buyers of luxury homes tend to prioritize high-end finishes, custom designs and prefer the best building materials to be used in building their properties. They seek properties that provide comfort, sophistication, and uniqueness.
Apart from their interest in outstanding design that will make their house stand out among the lots, they also look for homes that offer a high degree of customization, whether it’s the layout, interior design, or specific features such as smart home technologies.
They are very meticulous and will scrutinize everything about the building from structural integrity to finishing (aesthetics). They are particular about uniformity, for instance two opposite or adjacent columns should have exact same dimensions, plastered surfaces should be of perfect levels, edges of dressed columns and beams etc must be straight, sharp, perfect and uniform.
Lines separating two paint colours in painting design must be sharp and straight without bent, paint colour combination very key to their interest, no paint drops or spill overs around, tiling works must not be tainted with tile grout, tiles laid in rows must be in perfect lines, spaces in-between tiles must be closed and consistent throughout the tilling works etc. The list continuous on and on.
Remember, they don’t mind rejecting the property on the grounds of just a little paint drop or stain somewhere or one little dent on the wall. This is who they are and knowing and understanding them makes your luxury property business the most lucrative.
Privacy, Safety and Security Consciousness
Moreover, many luxury homebuyers are privacy conscious even though they will not like to go in for gated communities. They will prefer a sophisticated fence with a security station. Apart from this install CCTV surveillance systems. This helps them monitor everything inside and around the property.
Beside this, they have biometric access control systems installed; you don’t just knock their door and enter. Also, burglary alarm systems, electronic prompt systems et cetera that give them alerts about any act of intrusion around the property etc. So, building a luxury property without these sophisticated features makes it quite difficult to sell.
Environmental and Sustainability Consciousness
The developer should bear in mind that these are people who have money; they don’t want to die early so they can enjoy the fruits of their labour. So they are very conscious about the environment, for instance the air they breadth.
For this reason, they will like to have spacious areas for laws, ornamental plants, mini gardens to ensure fresh and naturally air circulation around the home.
Some would even prefer a provision for flower pots on corridors, balconies, rooftop terrace and even lawns behind and in front of their fence walls. They will prefer an environmentally friendly alternative energy supply such as solar in place of the national grid and generators, biogas in place of liquefied petroleum gas as well as the use of eco-friendly building materials etc.
On the other hand, they look for properties that contribute to personal well-being, such as properties with dedicated spaces for yoga, meditation, or wellness-focused amenities such as gymnasiums and physiotherapy equipment.
Exclusivity Consciousness
In as much as they love their privacy and security, they do not like to live in mass gated communities as stated earlier, one of the reasons why it is uncommon to find gated communities of luxury properties with more ten (10) units.
In most cases, they are a few like 5 units. They will like everything they do to be unique, from the design of their homes, the clothes they wear, the cars they drive and even the casket they are buried with when they die.
They don’t mind breaking a newly built house to rebuild a more modern and sophisticated design, they don’t mind selling a car or their property or abandoning its use because it has become a common car or housing design in town.
A year ago I used to work with one millionaire who bought the latest range rover model only to park it just on the grounds that the model has become common in town. Can you imagine that? They will either sell or dash it out as gift to someone else. They will do anything to always look outstanding among the lots no matter much it may cost them.
So, as a developer targeting this class, your designs must be extra modern and must stand the test of time.
Conclusion
In conclusion, the above dynamics show that this class of buyers are very sophisticated. This is why it is important to have them involved in the process from the designing stage, the construction to finishing, making provision for individuals to propose features according to their unique tastes and preferences.
I am pretty sure by now you would have understood too well why we mentioned earlier that it was not ideal to do straight jacket design for luxury properties and building same to completion before looking for buyers. This is also one of the reasons why luxury properties are most often done off-plan, allowing the prospective buyer propose their preferences that can easily be adapted at the design stage.
Therefore, at the end of the day, the properties are easy to sell by this model and clients are satisfied because they have their property been customized to their taste and preference.
Now here is where the jackpot is, once they are satisfied, they will always recommend their fellow wealthy friends, family and associates to the developer and this is where one gets the opportunity to make it big!
However, it is important to note that, dealing with luxury clients has its own challenges, many are litigant and can crash your real estate business within 24hrs, but despite all the challenges, if an investor or developer understands these dynamics, chances are that, he is highly likely to make a fortune that will last generations.
