International luxury home buyers prefer traditional real estate firms

By NST Property - June 23, 2021 

International luxury home buyers are planning to work with a traditional real estate company such as a broker or an agent to buy their next property especially with the rise of online competition in recent years. This is based on a new study of over 3,000 of the world's most affluent households by Luxury Portfolio International® (LPI), the luxury arm of Leading Real Estate Companies of the World®.

Traditional companies are the dominant choice globally, but considering the newness of disruptors (online agencies) in the market, consumer adoption levels are high at about one-in-five, said LPI president Mickey Alam Khan.

Khan said the study shows buyers prefer to work with a traditional real estate company when making a luxury home purchase.

He said traditional firms remain in the driver's seat, with the bulk of consumers opting for familiar and trustworthy sources when buying high-end real estate.

"Disruptors are relatively new and are still establishing themselves as a credible option to most luxury purchasers today. To maintain this lead, traditional brokerage firms must maintain personal connections with networking and affinity marketing, as well as being a trusted source, all while keeping current with technology," he said in a statement.

The study shows a summary of levels of loyalty to the traditional agent from the total surveyed.

Global affluents are 68 per cent more likely to use a traditional agent, with only 17 per cent saying they would opt for a disruptor.

Luxury buyers or those looking to buy a property worth over US$1 million are 70 per cent more likely to use a traditional agent, with only 19 per cent saying they would opt for a Disruptor

Those living in Asia Pacific are 74 per cent more likely to use a traditional agent, with only 18 per cent saying they would opt for a Disruptor

Those living in North America are 65 per cent more likely to use a traditional agent, with only 21 per cent saying they would opt for a Disruptor

Those living in Europe are 63 per cent more likely to use a traditional agent, with only 18 per cent saying they would opt for a Disruptor

The top 10 list of what is most valued in the traditional estate agent model comprise:

Highest quality offering

Customer service: speed of response, personal touch

Reputation: recognised leaders in the industry

Adapting to new technology

Employee embody similar values to my own

Corporate citizenship: social responsibility and sustainability central to the brand

Loyal to the brand or employee who works for the brand

Loyalty programme: earn rewards for continued business

Lowest cost

Provenance: story of the brand's founding