When it comes to off the plan property sales in Sydney, some opinions matter more than others. Boutique Developer was fortunate to get some Q&A time with David Milton, Managing Director, CBRE Residential Projects
BD: Are there any specific adjustments to sales strategies that you guys are implementing or recommending?
DM: Not so much adjustments to sales strategies but definitely a sharper focus than ever on product and audiences. Thanks to APRA’s recent tightening measures, it’s become more important than ever to achieve quality pre-sales results in order to secure finance – and there are a number of pillars that form the basis of any successful project in this market:
1. Quality product is essential.
We’re working tirelessly with our clients to ensure product is on point before taking anything to market. With owner-occupiers eclipsing investors at the moment, developers must be offering well-designed, liveable floor plans, along with high quality finishes. It’s not a great time for cookie cutter product.
Built design and liveability is critical. Buyers have more choice and are taking time to explore the market, in search of those developments that stand out as well-considered and beautifully designed, with large living areas and sufficient parking.
2. Polished marketing material matters in standing out and above.
Not only is there a lot of similar style stock on the market, there is a lot of standard language and imagery running through marketing campaigns.
Developing a strong brand and ommunicating a project’s points of difference in the most appealing fashion is fundamental to the quantity and quality of leads and ultimately sales.
The quality of renderings along with styling that catches the eye and imagination of the right buyers can’t be underestimated – particularly with the rise of highly targeted campaigns through social media.
Domain’s social Boost product, for example, has become a popular tool and buyers are flooded with imagery of aspirational buildings and apartments on a daily basis – so doing something different and appealling at the communications level goes a long way to attracting the right type of buyer interest.
3. Developers must factor in pricing that meets the market.
While we’re still likely to see strong prices achieved across quality developments in premium locations, there is, as ever, no point going to market with unrealistic expectations – particularly where presales are concerned.
Developers who are working alongside quality architects, designers and builders should expect to achieve a premium, but the heady sellout launches of early 2016/17 are likely to be a less common phenomenon for the next few months.
BD: What is the implication for campaign rollouts, given potentially longer times on market?
DM: Marketing budgets should factor in an adjusted market in the short term. Buyers are still looking for opportunities. They are simply taking a little more time to evaluate their options. We’re seeing strong registration of interest numbers through early stages of campaigns.
Where we do see a difference is in the time it takes to go from registration to sale. With this in mind, marketing budgets should factor in extended on-market periods.
Phased launches present a good opportunity to test audiences and receive feedback in order to optimise product for following rollout phases. This is a smart strategy in that stock doesn’t languish on market, offering developers a clear and reasonable opportunity to bring a second tranche to market without the stigma of unsold units.
Make sure you have a strong database to tap into. Particularly in the case of completing presales requirements, this element proves to be our strongest asset. In many cases, the quality of an agency’s database can determine the efficiency of a pre-sales campaign.
BD: Which buyer audiences are likely to yield the greatest value?
DM: Cashed up owner-occupiers in prime locations – particularly downsizers, looking for luxury, spacious and low maintenance living are a dependable audience, actively seeking out high quality apartment living – and are less susceptible to the highs and lows of the mortgage finance market.
BD: What interesting feedback are you receiving form buyers in respect to product or pricing?
DM: As pricing goes, the expectation is generally to pay a fair price based on comparable sales, rather than to be forced into rushed purchases at above-market prices to avoid missing out.
The exasperated buyer of recent history has taken a breather for a little while, which is seeing some normality return to the way property is bought and sold off the plan, with buyers taking their time to ensure that smart design, finishes and quality build are assured. Buyers are looking for those extra amenities, such as sufficient storage space and double parking.
BD: What are the key geographical considerations for developers moving into the current market?
DM: Developers should be looking for amenity – new and existing. The 15km radius around the city will always be in demand, given the world-class lifestyle that comes with a wealth of recreation, work and lifestyle amenity. Of course, sites in this area command a premium, so developers must be have a strong vision for the product to maximise what is often a costly opportunity.
With recent major infrastructure investments such as light rail and the charge towards the Western Sydney’s new Aerotropolis, increased transport and job prospects will see enormous opportunities opening up further afield, where demand will be underpinned by public infrastructure spending and land values are still attractive relative to growth potential.
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