This week I’m turning my comments away from all of the endless market commentary focused on prices, values, supply and interest rates, leaving behind almost everything financial to concentrate on buyer motivation.
I’ve previously quoted the three ‘Ds’ of death, divorce and debit as the big drivers of why people buy and sell homes. None of these three ideas are that inspiring and so I’m going to suggest a fourth ‘D’ and that’s desire. Desire after all is a very strong emotion.
Let’s start with an example of desire that’s outside of the housing market but, it’s a great example of how desire drives demand. There’s also a neat fix when we’re talking about d-words as here, I’m talking about diamonds. Right now, in the heart of Sydney in the new flagship store just opened for Tiffany, the Tiffany diamond is on display.
The Tiffany diamond is a sparkling example of how desire absolutely drives demand. The diamond was acquired by Charles Tiffany for US$18,000 in 1877 and today its valued at somewhere around US$30/35 million.
The desire to own a diamond as intensely beautiful is perhaps understandable, when you see it however, no less powerful is the desire that in part also drives the motivation for owning your own home. And that’s usually well-below $30m.
This is a fascinating topic and one of the basic ideas that helps understand buyer motivation comes I’m suggesting, from considering the wider meaning of the word ‘tenure’ and tenure is accepted as the essential foundation of property ownership.
The word tenure tells us a lot about how anyone seeking to own their own home might feel, might be motivated and that’s even though the word may not be used in everyday casual conversation. However, tenure is very much related to security, and security and home ownership are almost inseparable ideas.
Tenure is derived from a medieval French word meaning “to hold.” Reference from 1414, as “holding of a tenement,” from Anglo-French tenure “a tenure, estate in land”. The word also links with the Latin ‘tenere” which has a number of definitions that we can relate to owning a home: to hold, keep, possess and preserve (secure) it.
These same ideas suggest security, and security of tenure is I would suggest perhaps the most basic and important motivation for a majority of people buying a home. Security is one of those words that in 2019 has taken on much greater meaning and weight across society, it’s a key motivation.
Defining Housing Security
Away from the three ‘Ds’ I’m always keenly interested in what motivates the majority of homebuyers. Consider why do people want to buy and ultimately own a home once any mortgage is paid-off?
What’s in their hearts and minds? Why do so many of us work, sacrifice and save, for years, in order to pull together a home-loan deposit?
It’s a mind-set that also extends to governments and policy makers and it’s perhaps demonstrated by the policy settings being proposed in the race for the current Federal election. Where we see housing and property becoming a central policy debate.
In short why do so many people still see home ownership a key life and personal goal. And for much the same reasons do we see people renting now looking for much greater long-term tenure and security.
It appears that from various research projects and surveys that the main motivation for buying is simply the desire to own a home of your own, to have a place that is yours, to make your own.
A secure space, secure tenure, a home that’s a buffer against the outside world that is often seen as harsh and brutal. A goal that’s so topical and so important that housing affordability (both buying and renting) is always a concern of governments and the whole of society.
Thinking about buyer motivation and with a focus on how important security is, I’m reminded of ‘Cocooning’ a term first coined by Faith Popcorn in 1981, cocooning is sometimes described as “the stay-at-home syndrome.” However, it’s an idea that does help pin-point in everyday terms, some of the ideas that I’ve just touched upon earlier.
Faith Popcorn’s idea was a trend setting one in 1981, and soon because a part of popular culture. Cocooning is all about staying at one’s own home, insulated from potential ‘danger’, or simply the distractions and hurdles of everyday life.
The term took on greater relevance as evidence from Popcorn’s work revealed an intensifying home focused behaviour. She forecast it would be a trend, not a fad and in 1986 said that the concept involved building a “shell of safety” around oneself, around your home and family.
Commentators have described the trend as a shield against the harassments of daily life, and big issues like a nuclear war and terrorism that have driven people to ”cocooning”.
As home becomes the centre of our security, cocooning is made easier by somewhat related trends that include UBER eats. Although not directly referring to UBER eats, Popcorn has cited the increased use of gourmet frozen foods as examples of cocooning behaviour however, now with UBER eats and Google drone deliveries, you don’t even need to visit the supermarket as food and other items of every kind are just a few clicks away on your smartphone App.
Social media has also emerged as a counter trend allowing people to be cocooned but still digitally connected, even with social media facing its own problems.
Well before 9/11 and the GFC, Popcorn saw a need for people to seek a safe place. Today with technology like self-driving cars, intrusive identity theft tactics and the suggestion of foreign powers infiltrating our internet space, people are more than ever looking for places that feel safe, and often that space is at home.
It’s a key trend and a big reason for the central role of housing and home ownership in modern Australia, it gives us stability and reassurance.
As people look to their safe spaces in their homes, Popcorn however, now sees that we need to reach inside the cocoon and pull people back out without scaring them. This is one reason why we may have seen new apartment projects and housing estates offering more and better facilities, like shared dining rooms, community cinema rooms and even private clubs.
The idea of home as a ‘cocoon’ will soon be 40-years old, however, it would still appear to be a core idea and motivation for owning a home or renting with long-term security, where tenure is a cocoon, even if it’s achieved at a high cost and a big mortgage.