The price of property management services is projected to continue to rise gradually as the economy continues to improve and suppliers face higher input costs.
Los Angeles, CA (PRWEB) September 10, 2014
Property management services have a buyer power score of 3.0 out of 5. A recovering economy and improving real estate market have prompted suppliers to continually raise prices in response to growing demand. “Rising levels of corporate profit, the rising number of businesses and a declining 30-year conventional mortgage rate have prompted more buyers to rent commercial properties,” says IBISWorld procurement analyst Andrew Krabeepetcharat. “Consequently, these buyers are required to purchase property management services.”
Despite rising prices, buyers face some favorable trends in the property management services market. Prices have experienced a low level of volatility during the past three years and have provided buyers with a more stable purchasing environment. Buyers are better able to predict future expenses and are unlikely to experience price hikes in the future. Also, buyers benefit from a low level of market share concentration. “There is a high number of vendors in the market, which encourages suppliers to compete on price,” adds Krabeepetcharat. “This competition has mitigated price growth during the past three years, benefiting buyers.”
However, some factors harm buyer power. Buyer negotiating power is reduced by a low number of available substitutes. Oftentimes, suppliers are also owners of the rental property and require renters to purchase the property management services from them. Additionally, switching costs are moderate and make it difficult for buyers to change suppliers either during or after a contract has ended. The lack of direct substitutes and moderate switching costs encourage buyers to carefully choose their supplier because it will be costly to terminate a contract before it finishes.
Depending on the type of property the buyer needs to manage, the purchasing process can vary widely. Long-term contracts for large commercial properties will require a longer buying lead time and selection process. However, buyers that seek property management for either residential properties or small businesses will find the purchasing process less complicated. As a result, certain types of buyers will experience more buyer power than others. For more information, visit IBISWorld’s Property Management Services procurement category market research report page.
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IBISWorld Procurement Report Key Topics
This report is intended to assist buyers of property management services. Providers manage residential and nonresidential real estate for others. Property management responsibilities relate to the overall operation of a property, which include maintenance, rent collection, trash removal, security and some renovation activities.
Recent Price Trend
Product Life Cycle
Total Cost of Ownership
Supply Chain & Vendors
Supply Chain Dynamics
Supply Chain Risk
Market Share Concentration
Buying Lead Time
Key RFP Elements
Buyer Power Factors
About IBISWorld Inc.
IBISWorld is one of the world's leading publishers of business intelligence, specializing in Industry research and Procurement research. Since 1971, IBISWorld has provided thoroughly researched, accurate and current business information. With an extensive online portfolio, valued for its depth and scope, IBISWorld’s procurement research reports equip clients with the insight necessary to make better purchasing decisions, faster. Headquartered in Los Angeles, IBISWorld Procurement serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.