Spanish View catches up with Knight Frank’s Head of International Residential Paddy Dring, to discuss varying market locations and conditions, as well as buyer and vendor requirements
What motivates buyers? When purchasing a luxury property, what do they want to achieve with this “next” purchase?
Over the last 27 years covering the world’s super prime residential markets, the variety of property and clients I have had the pleasure of dealing with has been ever changing. However, if I think about the motivations for buyers, there are some central themes that have remained consistent throughout.
The property itself is of course critical – but the wider consideration of accessibility, climate, privacy and even security are key influences. I would say that for most markets the broader political and tax environment has also become steadily more important.
What swings a buyer from “just looking” to “I’m buying”?
The desire to share a new home with friends and family is strong, especially with buyers who have made their wealth relatively recently. Ensuring their loved ones can spend time with them in their new homes, and get there as easily and quickly as possible is a key priority and often dictates the locations our clients will look in. We spend a lot of time with potential buyers who undertake multiple viewings and look across several markets – our role in these cases is to try to guide them into narrowing down their focus. The final trigger that turns a buyer from “looking” to “buying” can vary: a tax change, price movement, a change in financial conditions or simply falling in love with a property.
A buyer and a vendor’s interests don’t always overlap, how do you align both parties?
Understanding and building relationships with both buyers and vendors is key, knowing the motivations (be it financial, influence from other family members or emotional attachment) and key factors affecting both parties ensures that you can align their interests for a smoother process for all involved. Mutual trust and respect is fundamental. The backdrop of both parties liking the same property or what has been created – garden, furnishing, layout – means they have much in common and a mutual respect to start with, so ensuring clients have those factors in mind throughout discussions forms an excellent basis to work from.
While price is frequently considered to be the most important issue, I believe it is in fact a combination of things including the terms of the deal, planning, timing and the strength of professional advisers that drives any deal. Above all, maintaining open and consistent dialogue between the parties throughout the process and managing expectations is crucial – preservation of the “goodwill” factor is essential.
What are the biggest mistakes vendors make when trying to sell in this rarefied market?
Overly ambitious pricing can of course impact a sale – todays buyers are very knowledgeable and carry out their research carefully before buying. Assessment of comparable evidence is a critical step to take with clients. Likewise, an honest assessment of the property’s condition is paramount.
How does Knight Frank’s global network help a vendor?
Over a third of the properties we sell are to buyers coming through our global network and existing client database. Our team of interconnected negotiators and consultants around the world, all highly experienced in this sector and their individual markets, support each other to match people and properties perfectly.
Which locations and property types, are in demand?
Thinking about the future trends, established second home markets will remain popular, but the world’s key urban hubs are definitely on the rise.
A combination of international demand underpinned by strong local demand – particularly relevant to those looking for a safe-haven investment that will ideally generate reliable income and capital growth – drives these markets. Currency, tax, availability of finance and education all add to the desirability of cities like London, New York, Dubai as well as a number of growth markets – for example Berlin, Madrid and Geneva.
There has been a discernible shift in favour of “turnkey” properties – those not requiring huge restoration. Buyers are generally time poor and wary of local bureaucracy. Safe-haven investors tend to prefer new or recent developments or fully restored properties with additional facilities and services that are usually managed and can be rented if required. A low maintenance “lock up and leave” has equal appeal.
How do trends vary with different age groups?
There is certainly evidence linking the younger generation with city centre investment in new developments that feature the latest technology and environmental credentials. Such locations also have all the facilities that buyers require in close proximity – critically, in many cases, education for their children.
My key advice for buyers and sellers alike is to keep focussed on their main goal, whether to sell at a certain price or acquire in a fixed time-frame – keep the process as simple as possible and choose an agent who you believe you can communicate with clearly and openly through the process.