Housing service by subscription with the opportunity to invest

The developer builds residential areas with developed infrastructure, business districts with office spaces, shopping and entertainment, and sports facilities, creates urban recreation areas.
30 yrs. on the market
Company is in the top 5
1 million sq.m. objects
The peculiarity of the industry is that the cycle of real estate sales is 3-4 years. During this time, the company designs houses conduct construction, ennobles the territory, and rents out housing. Until 2030, the company has 2 full cycles left, and now it is necessary to understand what to change in business processes and strategies to remain successful.

Today, the real estate industry is developing according to the classical business model. But people's habits have already changed significantly.

What can a developer offer in 10 years to remain successful on the market? One of the largest development company of the country turned to us with such a task.

Hypotheses

Our team had formulated hypotheses before the study began.
1
Sharing economy
The value of housing as the property will fall significantly, soon people will prefer the economy of use instead of ownership.
2
Mobility
Growing migration and the growing trend of mobility is changing the usual way of life – people want to move freely between cities and countries, not to be tied to one location.
3
Generation Z and Alfa
Pioneers in the use of housing with a new concept and business model should be young people with modern views on life, working in areas such as IT.

Tasks

Customer behaviour
To study the real estate market, buyers' behavioral scenarios, and their requests in the field of buying and using real estate.
Hypothesis testing
Test hypotheses of solutions to understand which of them will be in demand on the market in the future.
Using trend analytics
Determine what a housing developer can offer in 10 years to remain successful.

Mike, 17 years

not the owner
“My housing will look bad in 10 years, because you won't save up for a normal one. Mortgage is an evil! I will live where is Internet"
Mike, 17 years
not the owner
“My housing will look bad in 10 years, because you won't save up for a normal one. Mortgage is an evil! I will live where is Internet"

Process

The team has chosen the design thinking methodology to work on the project.

1
Research stage
We identified and studied our potential buyers, conducted in-depth interviews with 4 segments of our target audience: those who have their own housing, those who rent an apartment, and those who live with their parents. We also talked to experts.

It turned out that young people with an active lifestyle share the conservative views of the older generation. It is important for respondents to own a home, as this is a guarantee of stability and confidence in the future.
2
Analysis stage
In the process of analyzing customer data, we received two main insights:
➝ Insight: Don't leave me after the purchase!
➝ Insight: I want to own a property anyway!

We have analyzed 11 trends and determined what will significantly affect the real estate sector soon. These are sharing economy, mobility, and subscription-based business.
We have identified the key pains of potential customers:
• difficulties associated with buying or building their own home
• lack of affordable housing
3
Design stage
We settled on one main idea – a subscription housing service with the possibility of investing. Since it is important for buyers not just to rent a house, but to be its owner, invest in the future and feel stability.

We also included functionality for other insights in the final solution: consumers want to be mobile and not think about collecting and transporting things, live in an apartment with ready-made high-quality repairs and use a digital convenient service that takes into account all the needs of residents.
4
Testing stage
Our first version of the solution contained only the idea of renting apartment rooms by subscription. Using the trend of sharing the economy, we assumed that users would be happy to accept this option. When we came to the respondents and found out that 100% of the participants gave feedback that they were not ready to consider such a housing format, since they don't own a property. The habitual way of thinking turned out to be stronger than seemingly progressive solutions.

Then we adjusted the decision and added the possibility of investing with further obtaining ownership of housing. This option received confident approval from 50% of respondents.

Results

Proven solution for the new service and business model.
We need to change and innovate now!
We have developed a subscription housing service with the possibility of investing, which will meet all the needs of users and will not lose its relevance by 2030.

Benefits for potential buyers: participants are not tied to a specific apartment and can move (in the morning here, in the evening there), but they are confident in the future (they are accumulating or gaining meters and receiving income) while paying a comfortable monthly payment.

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