Properties Magazine March 2017 : Page 79

is integral to maintaining the ambiance of a community. In fact, residents and prospective residents perceive cities and properties with well-maintained land-scapes as more desirable places to live. Additionally, landscaping can add up to 14% to the resale value of a building and speed its sale by as much as six weeks, according to the Associated Landscape Contractors of America. During the past three years in particu-lar, heavy investments have been made in landscape maintenance services by homeowners, homeowner associations, local businesses and local municipali-ties. In line with an estimated 5.4% annualized increase in private spending on home improvements, demand has been strengthening for landscape main-tenance among homeowners and other entities with a stake in maintaining a city’s attractiveness. Universities have also emerged as key buyers of landscape maintenance services as part of a push to improve the appearance of campuses to draw new students. Although tuition funds a portion of landscape mainte-nance work, universities often rely heavily on government funding to assist in financing these projects. Consequently, universities’ demand for landscape main-tenance services is dependent upon the amount of government funding allo-cated to universities. Due to growing tax revenue, government funding for univer-sities has increased, which has boosted demand for landscape maintenance. Rising demand from major markets (i.e. residential, commercial, education, gov-ernment operators and a wide range of hospitality establishments) has been causing landscape maintenance prices to rise at an estimated annualized rate of 1.2% during the past three years, a trend that is expected to persist through 2020, according to IBISWorld projections. Price Growth for Landscaping Services Service Type Landscaping Architecture & Design Services Landscape Maintenance Services Three-Year Price CAGR 2014-2017 (%) 2.0 1.2 Three-Year Price CAGR 2017-2020 (%) 2.0 1.4 Source: beautification efforts, demand for more distinctive landscape designs will spike, prompting price growth for landscape enhancement services. To mitigate the impact of rising prices, buyers should establish relationships and engage in long-term service agreements with ser-vice providers. Landscape design and maintenance firms that have experience with a specific buyer’s land will be in better position to suggest and effec-tively incorporate modifications related to living elements, bodies of water, land formation, terrain shape and elevation. These relationships will not only help buyers leverage their purchasing power to receive more favorable prices, but enhance buyer satisfaction due to the landscape firm’s greater familiarity with the buyer’s land and preferences. P Deonta Smith is lead procurement research ana-lyst with IBISWorld Inc. Recognized as the nation’s most trusted independent source of mar-ket research, IBISWorld offers a comprehensive database of unique information and analysis on hundreds of procurement categories. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business and purchasing decisions while saving time and money. Looking forward Landscape enhancement will con-tinue to be a preferred method of boosting property value, meaning that services will be in high demand during the next three years. However, as home prices rise and local govern-ment increases investment in city 79

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