Incentives and discounts in the crowded new construction market
Builders and real estate developers offer incentives to buyers in an attempt to stand out in the midst of the tough real estate market.
Advertising campaigns that offer prices as low as the 1990s and the chance to win a free car are just a few of the promotions available in early 2019.
Prospects for new residential buildings generally decline during periods of declining house prices, economists say.
âIt’s a more difficult environment for home builders right now,â said Master Builders Australia chief economist Share Garrett. âWe estimate that fewer houses will be built in the coming years, especially when prices drop in Sydney and Melbourne.
âIt’s harder to get people involved in building houses when the prices go down. “
Estate economist Trent Wiltshire said while approvals have yet to drop significantly, forward-thinking builders may already be looking to consolidate their businesses.
âWhen prices go down, sales and turnover go down, which could contribute to a slowdown in new buildings,â he said. âIt’s possible that manufacturers are looking ahead and seeing a slowdown over the next two years.
National builder Simonds Homes’ current ad campaign proclaims “90s house prices are back!âAlongside visuals of a group of boys from the 90s.
The campaign offers prices as low as $ 138,000 for a three-bedroom home, hitting just $ 235,000 for a five-bedroom option. Simonds has been approached for comment.
Meanwhile, Amity Property Group was offering up to half a million Qantas loyalty points with their new apartments in Highett, Victoria and apartment developer Meriton was offering 3% fixed rate financing in Queensland and New South Wales, as well as a 50 percent stamp duty refund for all buyers. Amity was approached for comment, while a spokesperson for Meriton directed Domain to its website.
Brisbane developer Privium Homes was also offering the first 20 buyers to post a bond on one of their Canvas homes in NSW, Queensland and Victoria by January 28 a free MG3 car.
National Sales Manager Aaron Jambrovic told the group âwanted to reward a number of buyers with a housewarming gift in the form of a great new car â.
Volume home builder Metricon Homes is running a promotion on select two-story, four-bedroom homes for $ 266,900, as well as another $ 50,000 supply of accessories and finishes for $ 10,000.
Metricon Victorian sales manager Drew Glascott said the size of the group allows it to pass on discounts and offer competitive pricing year-round. âWe have special offers, but we also continually challenge our operating model to ensure the lowest daily prices for our customers,â he said.
Such offers are common and require careful consideration by buyers. Websites like finder.com.au have pages dedicated to informing consumers about the pros and cons of frequent flyer points programs and others like them.
New home design specialist at national builder Stroud Homes Max Xia said that while many of these offers may be tempting, they might not be all they appear to be.
He said builders offering seemingly low prices for new construction was an area where buyers needed to be careful.
âIn today’s market, you have a lot of volume builders with a starting price and offers on TV that sound too good to be true,â Xia said. âA lot of them are just advertising and promotional tools, but at the end of the day everyone’s costs are similar.
âFor a complete house you may need to add a few items that are not included. “
Mr. Xia said the best way to get the best deal is to shop.
âIf you’re a new home buyer, look for inclusions up front. Nobody gives away stuff for free, âhe said. âYou have to do your own research and talk to a few builders. “
Promotional activity was an indicator that the residential construction market was still competitive, but fears of a downturn encouraged builders to try to stand out even more, Garrett said.
“My interpretation is that this is a reflection of the competitive activity taking place in the market rather than manufacturers engaging in price discounts,” he said.
âSome manufacturers might try to expand and downsize their competition. Some people might try to build a reputation and gain a foothold in the market. “