Property developers have taken some time to adapt to newer technology trends, but they have finally caught on. Real estate’s adoption of new technology has progressed seemingly more slowly than some of its counterparts. However, with the advent of big data and machine learning, the viability of different and new kinds of data (data that wasn’t as readily available in an accessible format before) has given a massive incentive to property developers. Property developers use demographic and psychographic data to better their business’s reach.
What is Demographic Data
Demographic data is a structured data set that gives you insight into a specific demographic in an area, precisely their age, ethnicity, income, tax bracket, socioeconomic status, gender, religion, etc. Then there’s more specialized demographic data such as median income, average home value, the average age of the population, distance to downtown, school district, school ratings, tax rates, and spending power. With big data coming up fast on the horizon, this form of data is more accessible than ever. When discovering trends in this form of data, you can predict future markets for your investment.
What is Psychographic Data
If demographic data is painted in black and white, psychographic data is the same picture in color and anamorphic 3D. Psychographic data is about a person’s values, interests, personality traits, what defines them, attitudes, and how they view the world.
Most importantly, from the perspective of investors and marketers, psychographic data is about what triggers motivation in a person to act in a certain way. What would make person X buy property Y in area Z?
You don’t have to look far and long to understand the implications of psychographic data. Just take a look at Florida. Areas like Tampa Bay, Tallahassee, and Palm Beach are marketed towards the affluent elderly population, with hundreds of resources, amenities, and services. Retirement homes, golf courses, the best hospitals, accessible shopping areas, and recreational zones like parks in those cities are built by developers who are well aware of their demographic and understand the psychographic data presented to them by that population.
Demographic Vs. Psychographic Data
Demographic data is very socioeconomic. This data deals with race, income, education, employment, population statistics, and geographic location and time. When demographic data is tailored around a population, characteristics like area, population growth, birth rate, density, distribution, and ethnicity are considered.
Now, psychographic data is concerned with the finer details of that population, such as the activity trend of the people in the area and what their interests and opinions are. While demographic data can be more or less harmonious in different groups, every demographic group has different psychographic data.
Two people of the same age and same marital status with matching incomes and number of kids living in two different neighborhoods might be a very strikingly similar data set in demographic data. Still, they’ll be two different people entirely in terms of psychographic data. Person A might like fishing, mountaineering, and boating in lakes. Person B might be a fan of classical cinema, vintage bicycles, books, and antiques.
In terms of marketing, this varying information will result in two different campaigns for these people.
Why They Are Important to Property Developers
Property development is not an isolated business. It’s a community-centric business. You don’t just sprout a neighborhood in the wild and expect people to appear and live there. Properties are planned with amenities, resources, key locations, and facilities.
Property developers can use both kinds of data to ascertain what sort of demographic trends the population follows to invest in properties that cater to the population’s needs.
These different types of data come together and are helpful to property developers by helping them invest time in attracting tenants that will add value to their properties.
Using these data sets, property developers can:
- Analyze current tenants
- Scout great locations for their project
- Invest in adjacent properties that will complement and increase the value of their properties
- Understand what the tenants need in terms of amenities and facilities
- Invest their money in specialized campaigns to reach a particular demographic
- Use the data to predict the future trends of a specific market
While demographic and psychographic data provide entirely different kinds of information to property developers, they are equally helpful when making business decisions involving the investment of money, time, and resources.