Get a Plan to Sell: Rising Home Prices & Plummeting Sales
September 27, 2019
Major Canadian cities like Toronto, Vancouver and Calgary have experienced exponential growth in the housing market over the last decade. The average price of a home in Canada rose from 377,000 in 2010 to 627,400 in 2019. In Toronto, average home values are close to 800,000, and in Vancouver? Nearly 1.1 million.
Those keeping a close eye on Canada’s real estate market can see the small fluctuations up and down (like those felt in Calgary since 2016), with an overall trend upward into 2020 and beyond. But when the average Canadian income doesn’t rise to match the expanding cost of housing, the market faces a problem: Fewer people can actually afford to buy.
This large influx of expensive products (development isn’t slowing down) with a limited number of buyers makes moving your inventory extremely challenging, especially considering many homebuilder brands look and sound similar. You don’t want to compete on price because it’s a race to the bottom, everyone loses. The only way to win and get ahead in a market where many communities and homes blend together is to create differentiation between your brand and your competitors’ products. Give buyers a reason to remember you, then choose you.
Skyrocketing Toronto and Vancouver
There are no signs indicating the rate of new developments popping up in either Toronto or Vancouver will slow down, even though the average price of those homes is rising, too. There are more than 65,910 new units in development in the Greater Toronto Area (3/4 are condos), over 36,000 new homes under construction in Vancouver, and more than 8,500 being built in Calgary right now.
Now there are dozens of developers in those cities scrambling to line up buyers as soon as possible to avoid having to sit on unsold product for months or years. However, those buyers they want to line up are not only smaller in number because fewer people can afford mortgages thanks to stagnant salaries and stricter lending rules, they’re also more skeptical of housing as an investment. Canadian buyers watched the housing market collapse in parts of the United States in the last decade, and see vulnerability in terms of their investment in Canadian cities.
Branded for Confidence, Value and Excitement
The challenge placed in front of home developers is how to sell a large purchase decision in an overly saturated market to a dwindling and highly skeptical audience. The answer is trust. A trustworthy brand that cuts through the clutter will ensure your target audience not only takes note of your product and remembers it, they’re also more open to consider dropping their life’s savings on it.
The way to build trust is more complicated than just picking the right colours for your brand and creating authority using the right logo and messaging. A highly targeted and consistent advertising media selection is the only way to get your message through, and it also creates familiarity and a level of confidence in your brand. Strategic signage and greater visibility are still the greatest drivers of sales in real estate and will keep your brand top-of-mind for longer.
Because every housing market in Canada presents its own unique challenges and opportunities, a robust research program and lead-generation strategy must be developed before any marketing for a new home development begins to ensure the right insights are uncovered, and risks avoided.
Finally, once clients are in the sales centre or another point-of-sale, their experience with your brand must be engaging and memorable. From a welcoming and interactive community discovery centre to guided tours of neighbourhood amenities and showhome walkthroughs –give people a lasting and positive memory of your brand.
To establish the long-term success of your build, robust brand development must begin years before the first homes are move-in ready. Check out some of Chatterson’s past work in the area of brand building and marketing that positioned our clients for immediate sales and lasting growth.