Luxury Portfolio International® (LPI), the luxury arm of Leading Real Estate Companies of the World®, recently released a study of over 3,000 of the world’s most affluent households.
The report reveals that most international luxury homebuyers are planning to work with a traditional company to buy their next property despite the rise of online competition in recent years.
This is namely the traditional broker or agent. Traditional companies are the dominant choice globally, but considering the newness of disruptors in the market, consumer adoption levels are high at about one-in-five.
A summary of levels of loyalty to the traditional agent:
– Global affluents (total surveyed) are 68% more likely to use a traditional agent, with only 17% saying they would opt for a disruptor
– Luxury buyers (buyers looking to buy property over $1M USD) are 70% more likely to use a traditional agent, with only 19% saying they would opt for a disruptor
– Those living in Asia Pacific are 74% more likely to use a traditional agent, with only 18% saying they would opt for a disruptor
– Those living in North America are 65% more likely to use a traditional agent, with only 21% saying they would opt for a disruptor
– Those living in Europe are 63% more likely to use a traditional agent, with only 18% saying they would opt for a disruptor
The new study shows buyers prefer to work with a traditional real estate company when making a luxury home purchase. There is little evidence of demographic or regional skews to these findings. Rather, it seems to come down to their expectations from service providers. The clients working with traditional brands are more likely to emphasize the benefits of personal relationships and basic needs that are important to cover. This includes speedy customer service, high-quality product offerings, a strong reputation and the use of new technologies.
The top 10 list of what is most valued in the traditional estate agent model:
1. Highest quality offering
2. Customer service: speed of response, personal touch
3. Reputation: recognized leaders in the industry
4. Adapting to new technology
5. Employees embody similar values to my own
6. Corporate citizenship: social responsibility and sustainability central to the brand
7. Loyal to the brand or employee who works for the brand
8. Loyalty program: earn rewards for continued business
9. Lowest cost
10. Provenance: story of the brand’s founding
As the market diverges based on price, higher-value buyers (USD $5 million and above) place greater emphasis on corporate citizenship (corporate social responsibility, or CSR, activities) and relationships with the brand and its employees.
“Traditional firms remain in the driver’s seat, with the bulk of consumers opting for familiar and trustworthy sources when buying high-end real estate. Disruptors (online agencies) are relatively new and are still establishing themselves as a credible option to most luxury purchasers today,” said Mickey Alam Khan, president of LPI. “To maintain this lead, traditional brokerage firms must maintain personal connections with networking and affinity marketing, as well as being a trusted source—all while keeping current with technology.”
For more information, please visit www.leadingre.com.
