In yet another sign that Vancouver's housing market has gone soft, desperate developers are resorting to all sorts of gimmicks to encourage young buyers to spring for a new place - such as a year's supply of avocado toast, or a free glass of wine every day for a year.
"It’s a slower, more competitive market," according to Vancounver-based Wesgroup Properties VP Brad Jones, adding "The onus is on us to show we have the most attractive offering."
As we noted in April, the decline of Vancouver's housing market has become worldwide news - with sales plummeting 46% over the past year to levels not seen since 1986.
Buyers continue to have the strong upper hand after years of manipulated price appreciation due to Chinese tycoon "hot money" flooding the market. That panic buying is now quickly turning to panic selling.
Prior to the August 2016 implementation of the foreign buyers’ tax in Vancouver, condominiums in Metro Vancouver were firmly in seller’s market territory, defined by a sales-to-active-listings ratio of more than 20 per cent for several months in a row, according to data from the Real Estate Board of Greater Vancouver.
But even condos proved unable to remain impervious to multiple government intervention measures. The ratio dropped from peaks of over 80 per cent to below 22 per cent in September 2018, where it’s stayed since. If it dips below 12 per cent for several months, it becomes a buyer’s market and prices tend to come down. -The Globe and Mail
And as condos sat on the market longer and longer - some hitting 40 days or more on average between December 2018 and February 2019 - developers have had to get creative.
Condos at one Wesgroup’s newest developments, Mode in Vancouver’s southern Killarney neighbourhood, come with a promise of a free glass of wine a day for a year. That incentive comes as a $1,500 gift card to a neighbourhood wine and alcohol store, which equates to about $29 a week to spend on a bottle of wine. -The Globe and Mail
"Now is the time to be creative," said Jones, who noted that the wine incentive generated a "massive amount of interest."
The wine promotion was launched after Woodbridge Homes Ltc. announced that anyone who bought one of their Kira condos in the West Coquitlam development would receive a year's supply of avocado toast - in the form of a $500 gift card to a local eatery.
After the announcement viral, the developer sold 60% of their initial offering according to MLA Canada president Ryan Lalonde. MLA provides real estate sales and project marketing services to developers, including Woodbridge.
In the first three weeks of sales, Lalonde said nearly 85 per cent of purchasers referenced the sandwich campaign and four buyers became aware of the building solely because of the media coverage of the toast offering.
"We wanted to find a way to cut through that noise (in the marketplace),," said Lalonde, who added that the flood of media attention they received was unexpected.
What will they think of next? Lowering prices?