AIPP Consumer Survey 07 Results
The Association of International Property Professionals (AIPP) has conducted a consumer survey on behalf of its Members. The survey asked buyers in the UK and Ireland what they are looking for, what their fears are, and how they would like to buy overseas property in an ideal world.
The survey found that 94% of buyers would feel more secure if overseas property companies had to follow professional guidelines and face disciplinary action if they did not. The survey also shows that 69% of consumers are most worried about being misled with unreliable information, while 78% believe that legal advice taken before signing a binding contract would make them feel more secure in their overseas property purchase.
The results of the survey have been broken down into three sections for this report:
1. What are buyers looking for?
2. What worries them when buying overseas?
3. How can they be made to feel more secure?
Full results of the survey are available at the end of this report.
Section 1 - What are buyers looking for?
Political stability 71%
Good capital growth 59%
Better climate 50%
Political stability is the most important factor for buyers when deciding where to buy property overseas; 71% of respondents cited this as one of the most important aspects for them (respondents were able to give up to 5 answers). Good capital growth was the second most popular aspect with 59%. The traditional idea of buying in a country because of a better climate is still popular, coming in third at 50%.
It is nothing new to the international property market to find out that buyers are looking for capital growth. The market has long since evolved from the pure ‘place in the sun’ buyer (though this category is still significant as the popularity of ‘better climate’ shows). The focus on political stability reflects, perhaps, that buyers are not just looking to make a ‘quick buck’, rather they are looking at a long-term plan on their investment in overseas property.
The word ‘investment’ is, arguably, the biggest single change in the overseas property market in the past 5 years. Even holiday home buyers talk about the rental potential and take account of capital gains tax implications before buying. The buyer has moved on with their investment head and the market is still, to a large extent, playing catch up. The extent of the industry’s success in the next few years may well be defined by how quickly it catches up.
Section 2 - What worries them when buying overseas?
Unreliable or misleading information 69%
Unfamiliar legal process 59%
Inability to independently check information 44%
Buyers are most worried about being misled in the buying process. The concerns here could be many and varied but the fact that it’s the number one concern shows that the industry needs to address this by, firstly, giving correct information and then by making sure they illustrate why a buyer can and should trust the information provided.
The overseas property market has been, unfortunately, littered with marketing messages and sales pitches that ‘guarantee’ this, that and the other. Some would argue that the very essence of the future is that nothing is guaranteed and it seems the buyer is becoming increasingly aware of that fact.
With 69% concerned about being misled and 44% concerned at their inability to check information independently, it is clear that the overseas property industry still has plenty of work to do to convince the public of its credibility. Convincing the public that the word of international agents and developers can be trusted will not happen overnight but commitment to a professional code (such as AIPP’s Code of Conduct) is already proving popular with the buying public (see section 4).
Ultimately, the buyer’s insistence on such professional conduct and accountability will dictate to what extent the market will have to change.
Section 3 - How can they be made to feel more secure?
Independent legal advice before signing contract 78%
Legal ownership of land / property confirmed in advance 76%
Payments held in safe accounts 69%
94% of buyers want a world where overseas property companies have to follow professional guidelines and face disciplinary action if they do not.
The biggest message from this survey is that the overwhelming majority of British and Irish buyers (94%) would like an international property market with professional standards imposed. It was, partly, this consumer demand that led to the formation of the AIPP in 2006 when the industry recognised the need to separate good from bad in the market. Professional companies saw that to preserve long term prosperity, buyers need reassurance in this fast-growing sector.
This need for reassurance is further seen with independent legal advice being the most important factor for buyers (78% would like the market to offer this before a binding contract can be signed). Legal ownership confirmed in advance of buying (in second place with 76%) is just one of the jobs that an independent lawyer would do for their clients.
When agents and developers in the international property market realise how many buyers want the level of assurance that adherence to a professional code can bring, they will raise their view from an internal ‘how do we get more sales’ mindset and look out to the wider market for the answers. The results of this survey give a good starting point: buyers want adherence to a professional Code and the ability to seek recourse if things go wrong.