A new business season has started in the Ukrainian real estate market. The post-quarantine autumn of 2020 is showing positive dynamics – the demand for the purchase and rental of residential real estate.
has grown, and the commercial segment is successfully adapting to new realities. Vadim Tarasenko, Head of Digital Marketing KN ” RIEL » .
Real estate market before and after quarantine
The post-quarantine real estate market is a new term that can often be found in the media. What is it like for you personally and how is it different from the usual? Is it worth attaching such importance to quarantine in the context of a niche?
It seems to me that this term is used more for the sharpness of articles in the media than for reflecting the real state of affairs. Especially when it comes to real estate. Our construction sites, for example, did not stop for a day throughout the entire quarantine. Of course, taking into account all quarantine measures (transport for builders, mask mode, etc.).
Yes, indeed, at the very beginning, when there was a complete lockdown and people were sitting at home, there was a drawdown in sales. But this is more likely due to momentary panic, which was dispersed by the same media since we have been seeing stable growth since March and already in September we entered a full-fledged pre-quarantine business season.
Quarantine is important, but life goes on , and already now we see that people who planned to buy real estate in 2020 are returning to their plans.
What was your first thought as a marketer when the lockdown was announced? Was there any fear or any concerns regarding the funds already invested by the company?
The quarantine was not a surprise for us, and Ukraine is not the first country to enter it. Therefore, we were ready for such a scenario and our first thought was: ” Well, it touched us, let’s go.” Most of the processes in the company are digitized, so at the time of the announcement of quarantine, we simply switched to manual control – we reduced budgets for something, on the contrary, we strengthened ourselves to maintain our positions and continued to monitor changes in the market.
Did you have your own forecasts on how the market will develop under quarantine and after? What is justified and what is not? Have all the objects in which you invest continued to be built or have some been frozen? If the latter, what factors influenced this and how is it planned to resume construction?
We live in a country where “it’s absolutely impossible” does not exist, and if you “really want” – then you can. So it happened with quarantine: people stopped, looked around, assessed the situation, took out masks, and ran on about their business. Therefore, we had complete confidence that, albeit not immediately, the real estate market would soon return to its pre-quarantine indicators.
As for construction projects, as I have already said, our developers have not stopped for a single day and are actively continuing the construction of all their facilities. Moreover, in the near future, we plan to bring a new residential complex to the Kyiv real estate market.
What development strategy in post-quarantine conditions did KN RIEL choose as a result? What decisions in it can you call truly anti-crisis, which have become a necessary measure? Is the Remont Buro project one of those? Tell us about it, how it appeared, what is its marketing success, how do you promote it and how do you plan to develop it?
Globally, we did not change our strategy and moved within the framework of monthly plans. They simply redistributed budgets towards digital and abandoned those tools that were ineffective (especially during the quarantine period).
The Remont Buro project is our independent and exclusive partner who provide a full range of services, from the preparation of an apartment project to the final renovation and furnishing of the apartment. Its most important advantage is the ability to enter the site even before the house is put into operation and complete the repair even when the rest are just starting this saga.
Does the instability of the situation prevent now from making far-sighted plans? Or, perhaps, on the contrary, there was a need for short-term planning? How does this manifest itself in practice, in specific decisions and actions of the company?
As a standard, we review plans and budgets every month based on past performance. During the review, we determine which channels show the greatest growth and focus on them while monitoring new marketing tools.
So we are not implementing any radical restructuring or anti-crisis plans. Confidently we move according to the planned plan
Demand and customer profile
How has the demand for residential real estate from the end consumer changed? Are people buying less real estate or, on the contrary, are they striving to acquire property?
Despite the global trend of abandoning real estate ownership, people in Ukraine still strive to acquire their own housing. Moreover, quarantine has created a new wave of demand, let’s call it “post-quarantine workers”.
During the quarantine, people had the opportunity to stay at home, do general cleaning and find that it might be time to update the apartment.
A good example of remote work is that after working from home for a couple of months, many no longer want to get from home to the office and back for two hours a day.
Another example is people who rented an apartment and lost the ability to pay for it during quarantine, will be more eager to postpone or reduce the time they take to make a decision to buy their home so that they never face such a problem in the future.
So the demand for real estate is growing now and will continue to grow in the future.
Are there any cardinal differences between the indicators by regions, in your case between Lviv and Kyiv?
There are no cardinal differences, but I would like to note that during the peak months, Lviv was much less panicked and was more stable in terms of demand than Kyiv.
How has the portrait of a homebuyer changed since the first wave of the pandemic?
Hasn’t changed at all. Perhaps the only thing is that buyers have become even more demanding in terms of the internal and external infrastructure of residential complexes. Quarantine has left its mark and people want to be able to cover all basic needs in their “patch”.
Among your objects, you can also find commercial ones. In my opinion, this market has suffered much more. How has the demand and customer profile changed here?
Yes, indeed the commercial real estate market suffered a little more. But again, it’s like a “storm in a teacup” – the demand receded from the offices and overflowed, say, to convenience stores, or takeaway cafes. Now everything is being quickly reformatted to meet the new demands of society, and other businesses will open on the same premises, which will be in demand both during quarantine and after it.
And how did the offer adapt to the new consumer?
As taught in all investing textbooks, buy low, sell high. Many perceived quarantine as a conditional bottom, but in fact, the demand for commerce has been and remains stable, even increased to some extent.
Our goal is to offer the market the most diverse premises that are interesting for both big business, which is now ready to actively expand, and small business, which will move the entire post-quarantine economy in the coming years.
Does the market need new commercial facilities? Which ones exactly?
Last year was a record year in terms of the number of commissioned square meters. m. commercial real estate, so it seems to me that the market is still in a bit of a limbo. Requests for large commercial real estate (SEC, shopping center) will be minimal. At the same time, internal infrastructure facilities (commerce on the first floors of the residential complex) will be in stable demand.
Online promotion trends and anti-trends
What online marketing tools for selling residential real estate have become especially relevant after quarantine? Which of them from your experience is the most lead-generating?
Buying a property is a multi-channel, long and complex process in terms of selection, comparison, and personal priorities. Therefore, it is difficult for me to single out a separate channel. Probably the greatest growth is now showing social. networks, they are several % ahead of Google and aggregator sites.
What is mercilessly outdated in online real estate promotion?
The main idea is that marketing today should not be intrusive. Such advertising is no longer responded to as a call to action. It is perceived only as a mention of the brand among many others.
The potential client must encounter the brand in a context that is emotionally close to him. For example, in a blog to which he is subscribed, in an article that he himself decided to read on a resource familiar to him, in the communities where he is a member.
Does this work for commercial real estate as well? Or is a radically different approach needed here?
Commerce is on the other side of requests. For example, if a quiet and comfortable place, walking distance to infrastructure facilities is important for residential real estate, then for commerce, on the contrary, it is important to be near a large crowd of people, in a passable place, away from potential competitors. But it’s a form. With us, real estate promotion tools, in general, do not differ for residential and commercial.
During the quarantine period, did you reduce or optimize the costs of online promotion? Why? How much of your budget is spent on digital advertising now?
In quarantine, people were sitting at home on the Internet, so spending money offline was inefficient. We focused on online promotion and strengthened our position across all channels. At present, the share of the budget for online promotion is 70-75% of the total budget for promotion.
Online promotion blitz:
Influencer, YouTube, or context?
Context.
Static or dynamic creative?
Dynamic creative.
Impressions or clicks?
Depending on the tasks, but within the framework of the blitz – clicks