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housing project

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.

  • 30years 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

We had formulated hypotheses before the study began

  • 1
    Sharing economy trend
    People prefer to use sharing model instead of ownership (economy segment, young people).
  • 2
    Mobility trend
    Growing migration, remote work, and the growing trend of mobility are 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 probably will be young people with modern views on life, working in areas such as IT.

tasks

  • Customer behavior
    To study the developer market, buyers' behavioral scenarios, and their requests in the field of buying and using real estate.
  • Hypothesis testing
    To test solutions' hypotheses to understand which will be in demand on the market in the future.
  • Using trend analytics
    To 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, and 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: I want to own property anyway!
    ➝ Insight: I don't want to live in coliving!

    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 essential 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
    The 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. But we found out that 100% of the respondents were not ready to consider such a housing format. 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

A proven solution for the new service and business model

  • A proven solution for the new service and business model
    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.

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

    This service also includes a solution with a digital twin of the house, concierge service, community. This means that the house system itself monitors the maintenance of the house, home maintenance staff help with any daily routines, and the neighbours have the opportunity to communicate with each other and organize their own local events.
11

next steps

  • 1
    Benchmarking of market
  • 2
    Local trend analysis
  • 3
    Hypotheses testing
  • 4
    Deep consumer research
  • 5
    Unit economics calculation and financial model construction
  • 6
    Adaptation of new physical/digital/phygital model to market
  • 7
    Implementation support
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