The rise and rise of the luxury property market
In the competitive world of real estate, marketing plays a crucial role in attracting buyers and selling properties. However, when it comes to high-end luxury properties, the dynamics of marketing change significantly.
This is especially the case as the demand for global luxury real estate is on the rise in 2023, despite economic and geopolitical restlessness worldwide. Simply put, luxury and uber-luxury properties are heavy-duty investments that speak volumes about social status, arguably more so now, than ever before.
What Luxury Homebuyers are looking for, has changed
The 2023 State of Luxury Real Estate report, which encompasses the opinions of an aggregate 90% of the world’s affluent class, found some key trends:
- For the third consecutive year, the number of buyers is greater than the number of real estate sellers, as inventories continue to dwindle in the much sought-after luxury property market.
- Nevertheless, research reveals that 2023-25 will be likely stronger than pre-COVID times.
- Luxury homebuyers are aware of and are adapting to the changing times, becoming more effective homebuyers as they prioritize key facts and figures about the quality of the investment.
- When asked to rank their needs and wants in a purchase, luxury homebuyers responded in the following hierarchy:
- Quality of investment
- “Good for the world”
- “Good for me”
A different ballgame
Because of these shifting trends in the last few years, luxury real estate marketing has become more complex, with agents having to master and elevate their marketing game far more than in the past.
What’s key about luxury real estate marketing is its specialized approach to promoting high-end properties to a select audience. It differs from traditional marketing in several ways.
For starters, luxury properties focus on exclusivity and sophistication. The target audience is a niche market of high-net-worth individuals, who have specific tastes and preferences.
Another important difference is the emphasis on providing a unique experience. Luxury real estate marketers understand that potential buyers of high-end properties are not just looking for a place to live, but rather a lifestyle.
A luxury property should be positioned as more than just a physical space - it should offer a desirable lifestyle that caters to the needs and aspirations of affluent buyers. Stories speak and strategy matters even more here.
How the experts take on luxury property marketing
The 4 P’s of luxury real estate marketing are Product, Place, Price and Promotion.
However, successfully marketing high-end properties today requires an additional set of strategies and tactics to really bring those 4 P’s home. Here are some actionable tips regularly exercised by some of the best luxury property agents.
- Create a strong brand identity:
Most brokerages and agents know that this is a key ingredient, but it matters that much more when it comes to marketing luxury properties. These LP agents build a brand that evokes luxury, exclusivity, and sophistication. A strong brand identity that emphasizes these factors will help differentiate their business and properties from competitors and attract the right audience.
- Leverage high-quality visuals:
LP agents invest in professional photography, videography, and virtual tours to showcase the unique features and aesthetics of luxury properties. High-quality visuals are essential for capturing the attention and imagination of potential buyers, who want to see projects that exemplify the epitome of luxury living.
- Target the right audience via hyper-personalization:
These agents have a firm understanding of their target audience's lifestyle, preferences, and specific needs, and utilize data-driven marketing strategies to identify and target potential buyers who are most likely to be interested in luxury properties.
This category of specific buyers are interested in ultra-special features, from personal recording studios, to state-of-the-art gyms, to in-house art galleries.
Not only that, demographics matter too:
- Younger affluent buyers have different needs and expectations than other generations
- International buyers may have cultural and language barriers that need to be catered to
- First-time buyers may need additional assistance, (a whitepaper guide for first-timer luxury property buyers, for example)
- Create a dedicated website:
LP agents are pros at–and continuously work on–leveraging social media platforms and online advertising to reach a wider audience and generate leads. They also focus on crafting a visually appealing and user-friendly website that showcases their luxury properties effectively.
This is especially important because while general real estate websites usually include a wide range of listings, luxury property websites typically highlight a single home. The landing page is clutter-free and exclusive in tone, highlighting the property’s secluded location or upscale amenities.
Because there are usually no links to other properties, it also means visitors are less tempted to move on to another page.
- Zero in on targeted social media campaigns
While normal real estate marketing can experiment more in the scope and scale of their campaigns, luxury property marketers have to be even more targeted with their campaigns if they hope to reach their demographic.
- For Facebook, the prime focus should be to reach luxury homebuyers according to area or location. For example, almost half of all US millionaires live in just 5 zip codes.
- For LinkedIn, the focus should be on the agent and their experience and expertise in the luxury property market.
- For all social media, sharing blog posts and other content is a crucial way to get the agent or brokerage brand name top of mind for viewers.
- Some of the best LP agents keep up their own luxury blog that establishes their expertise and personal thoughts on current markets, while leading more visitors to their property website(s) and promoting high visibility for their brand.
- Master the storytelling aspect, aka the “Digital Storybook”
This isn’t new to brands like Gucci, Balenciaga or Chanel, but luxury property agents have adopted this format as an effective way to increase engagement and enable viewers to have an immersive experience around a property. Some digital storybooks boast superb production quality and are highly visible to a global audience because of their digital format.
- Establish strong relationships
Luxury real estate marketing is heavily reliant on personal connections and referrals, so agents operating in this niche area work hard in building relationships with high-net-worth individuals, influencers, and industry professionals to expand their network and increase their chances of selling luxury properties.
Because buyers in this field are in search of a certain lifestyle, agents make sure to attend galas, openings and other events where they’re more likely to meet target audience buyers.
They also organize exclusive events such as property showcases, networking events, and private viewings to create a sense of exclusivity and generate buzz around their luxury properties. This will help attract serious buyers and create a memorable experience, while also striking up conversations with movers and shakers who can help keep the agent or brokerage’s name top of mind.
- Have in-depth knowledge of the luxury home market and highlight a property’s value
Successful agents know the property inside and out, including details about the neighborhood that would appeal to those in search of a high-end property.
Additionally, agents should be able to advise buyers on the best way to present an attractive offer, especially if the neighborhood is known for certain types of purchases. Ultra-high net worth individuals (UHNWIs) often decide based on value even in the midst of a market downturn; they still show interest in an offering that an agent has demonstrated as truly unique, personalized and highly valuable.
- Assemble a network of financial players
In connection to the last point, LP agents often also have a network of private lenders and bankers available, for example, to help counsel and advise buyers about the types of financing available. Agents who also have strong connections with financial institutions and experts are also more often recommended to customers who mention buying.
- Be adept in emerging technologies
In the past, real estate agents would respond to high-end buyers’ requests for visuals with virtual tours and high-quality videos taking them through the property. But with tech advancements and customers becoming more tech-savvy, the demands for creativity and exclusive access have risen.
It’s why, for example, 3D tours have become a staple in luxury property marketing and why more LP leaders are adopting tools like digital twins as a way to let buyers explore a property anytime, from anywhere.
This is fast becoming standard procedure for international buyers with deep pockets but little time and who make up such a large percentage of today’s luxury home-buying market. It allows this target audience to start the entire sale or leasing process without being physically on site, or even in the same country.
- Be ever-ready with the smallest of details
What tools like digital twins and other proptech software are doing, is equipping agents with the ability to help buyers visualize entire rooms and floors with 100% accurate dimensions, and tagging capabilities to highlight features like “indoor pool” or “recycled steel accents”.
These tools help buyers really envision themselves in a property in ways that were never deemed possible before, even letting them see if certain already-owned furniture pieces will fit in a specific room etc.
Another issue, highly relevant to the luxury property market, is security. This previous blog addresses ways for agents to safeguard property and customer data online.