How Does The Foreigner Investment Affects Real Estate Demand

How Does The Foreign Investments Affect Real Estate Demand?
Student’s Name
Institutional Affiliation
A planned unit development is a means in which land can be regulated for promoting large scale, unified land development by mid-range, realistic programs in pursuit of physically curable, social and economic deficiencies and cityscapes (Burchell, 1972). This type of development has a blend of marketable, suburban, open space or other different structure types that allows it to be strategic for authorities to license the development to advance from regular zoning standards. An example of a planned unit development project is the Elysian forest where a couple of units to be precise nine hundred, were planned for development. The units were several times the estimated size of a typical development. Though this was a great project, it failed in meeting the demands of the customers in the different subsets of the target market.
Foreigners demand of a real estate is likely to negatively or positively affect real estate demands. This however is possible if the existing real estate properties and their developers have failed to capture the different requirements that foreign investors might demand in order to accept a real estate property. Market segmentation for foreign investors is very necessary to single out common needs and unmet desires of investors in different areas.
Factors That Affect Real Estate Demand
People acquire their own homes for psychological as well as financial purposes and are a sign of financial stability. It’s an expenditure that is appreciated in value and provides state income tax reductions. Home ownership also offers benefits that may be less noticeable like self-importance, safety and a sense of belonging in a community. Summerlin development is a scheduled community located in Las Vegas, Nevada and is partly within sanctioned city parameters. The community has been divided into three links which include; North, South and western communities which includes two dozen marketable and domestic villages.
The determination of a buyer to acquire the type of a house that matches his or her desires includes; physical appearance and the house location is a crucial aspect that him or her has to consider. The issues surrounding the choice of location include; employment opportunity, cultural advantages governmental structures and social services (De Leeuw, 1971). Cultural advantages that a foreigner investor may look for or demand for while looking for a real estate include; availability of educational facilities, presence of recreational places such as zoos, museums and sports attraction. Religious foreign investors tend to settle in an estate where places of worship are quick to access and match their faith.
Social services that an investor from a foreign nation may look for entail aspects such as community centers, clinics and hospitals. When such aspects of ease availability and quality services are provided is gives a good impression to a real estate minded people. The presences of a governmental structure and the services to offers to a foreigner highly attracts foreign investors to acquire real estate, many tend to look for public utilities services such as power, gas, water and anti-pollution practices. Police and fire protection give people an assurance of safety of the neighborhood that they are to be part of. The ease to acquire goods or services and the community’s accessibility to people relies on availability of rail, highway system and air transport.
Housing as a non-locational factor comprises of size, design, style and financing availability. Some foreign investors might consider acquiring a real estate based on their preferences whether the house has old school style or new o its exterior. Some of the styles for the exterior of a house include; Victorian, shingle, cape cod, colonial revival and American colonial. The size of house is also an issue considered while a foreigner is demanding for a house. This is important as he or she may be looking for a house size where the whole family can settle in and may be even have spaces for an office, gym or kids play ground. Design of a house refers to the interior decoration of the house. This is also in reference to what the foreigner wants. This could be in terms of the wall color, design and color of the tiles, bathroom color, the lighting system and its pattern.
Another factor that affects a foreigners’ demand and choice while choosing a real estate includes the office. The style of an offices makes it an important aspect as this suggests on how the complete layout may affect the operations of the offices. The style of how certain rooms gives an impression of how different rooms can be used to give certain services like reception, security room, cafeteria and lavatory. The design brings out the final look of a place, an office layout would like to have sufficient lightning system, how different structure may be placed according to the office plan (Bourne & Hitchcock, 1978). Different foreign investors have different taste of colors, so this influences much on the office plan he or she has the desire for. Some clients like to acquire offices that have a glass window display so to maximize on the natural lightning them.
Floorplate is the amount of rentable area on one floor (Duffy, Cave & Worthington, 1976). Foreign investors have different amount of works and their this affects their demand in real estate checking. In multi-story constructions the floorplate on lower levels is likely to be bigger than those on higher floors. This applies when and if the foreign investor demands a large place or the work he or she is handling is small therefore opt for floorplates on the higher decks of the Summerlin development area.
The amenities and services that the office offers to a foreigner is another factor that affects a foreigners’ choice or demand while choosing an office in the Summerlin development. This therefore is terms of electrical and communication services. Electrical service is the supply of electricity and sufficient backup power in case of power failure or shortage in each and every room of the offices that the investor requires or demands. Communication services refers to how well the selected offices by the foreigner are linked and how the staff will be able to communicate with each other. Water availability in the offices for the staff either for drinking or handling office business is another factor that a foreigner demands in real estate.
Market Segmentation
Market segmentation can be applied by a foreign investor in the planned unit development. It refers to the isolation of a market into different separate subcategories (Fallis, 1985). It is also referred as an approach that real estate developers can use to meet needs that have been identified but not met. The importance of market segmentation is to identify profitable yield segments by combining features shared, common interests, similar lifestyles or demographic profiles. So that these can be designated for exceptional consideration hence becoming a target market. This system has been used in the Elysian proposed planned unit development as the benefits yielded grew every year A real estate developer can use this structure to develop estates for foreigners and their investments.
Segmentation is not only provided to establish the most economic subgroups of customers but also to improve profiles of key segments in order to better comprehend the desires of the selected and categorized subsets and cultivate motivation. Real estate developers can reduce the vast demands of foreigners by applying the market segmentation into the planned unit development and Summerlin being a planned development project can really boost real estate developers in acquiring customers.
Implications of Market Segmentation
Market segmentation has various implications on the customer and the product. Customer implication is the placement aimed at meeting their needs that result in increased customer gratification. Identifying a target market and the qualities of the target customer through measuring and market studies helps one serve their consumers more effectively. The implication of product segmentation is on its scheme and upgrade. Knowing customers’ needs and in this case a foreign investor one must ensure that the product features meet his or her needs. Target market promotes innovation and improves product quality by focusing on offering services that suit customer desires. Poor segmentation can lead to ruling out a huge number of subgroups hence not venturing much into the targeted market, its desires, ignores the possible potential due to poor segmentation.
The other effect of market segmentation is performance quality of the services that the foreign investment will have on real estate services and products. It aims at the amount that members of the targeted market are ready to pay for freshly revised products. Marketing strategy projects increases demand based on market study and allows to strategies for efficient and effective products.
Challenges of Market Segmentation
One of the cha...