Latest Vancouver real estate pitch: Free wine for a year with pre-sale condo purchase
Whether it is free wine or avocado toast, creative offers are signs of the times in a real estate market with slowing sales.
Derrick Penner
The Vancouver Sun
A Vancouver condo developer is offering free wine to presale buyers in an attempt to one-up a competitor that offered free avocado toast to purchasers — attention-seeking gimmicks for a slowing real estate market.
Wesgroup Properties is the developer of Mode offering purchasers a free glass of wine every day for a year, or rather a $1,500 gift card to Everything Wine. At around $28 per week, it is enough to buy a pretty decent bottle or two to pour and ponder the future.
Wesgroup’s offer, which is good for the month of June, follows Woodbridge Homes’ enticement of free avocado toast for buyers who signed up for $400,000 condos in its Kira project in Coquitlam in early May.
“It’s clearly a cheeky response to the avocado toast incentive that got so heavily picked up (in the media),” said Brad Jones, Wesgroup’s vice-president of development, but it also promotes some of the development’s neighbourhood features.
Mode, a 25-storey tower in the River District where units start at $519,900, will be just down the street from an Everything Wine store at the heart of the development’s planned town centre.
The offers are signs of the times in a real estate market with slowing sales that have caused resale values to fall and some developers to hit pause on new construction.
“(Sales are) certainly harder in this market,” Jones said. “You’ve probably seen an uptick in not only the volume but creativity of offerings out there.”
In marketing terms, it is referred to as ambush marketing, said professor Lindsay Meredith, a professor emeritus in Simon Fraser University’s Beedie School of Business, adding that the method is finding ways to get the news media to tell your story, rather than depending on advertising.
“You’re bombarded with probably 5,000 (advertising) messages a day,” said Meredith. “What do you do? You try to ignore all of them.”
Memory retention is paramount in marketing Meredith said, and “retention is much higher” if consumers see it in a news story.
However, to succeed, offers need to have more of a hook, according to real estate consultant Michael Ferreira.
“Any kind of incentive where you can build a story around it, especially if it relates to the buyer,” said Ferreira, a principal with the firm Urban Analytics.
For instance, the avocado toast giveaway, a joke on the internet meme about millennials who can’t afford real estate, resonated with potential buyers who feel shut out of the market, Ferreira said.
They can also create a little bit of urgency in a market where buyers “just don’t feel any need to make a quick buying decision,” Ferreira added.
Urban Analytics tracks project marketing data, which shows that presales of units over the first three months of this year are down 56 per cent from the last three months of 2018, Ferreira said.
Part of that is because a lot of developers have put off launching new projects, but “there is just no urgency with buyers,” Ferreira said.
“They read the papers, they see that (sales and prices) are down in the resale statistics,” he said. “They’re just waiting.”
The avocado toast tactic worked for the Kira development, which saw 60 per cent of its units sell in two weeks, which “far exceeded our targets,” said Cameron McNeill, partner with marketing firm MLA Canada, which headed the campaign.
“Our expectations were high in regards to the avocado toast campaign because we knew it was a story that resonated with our target audience,” McNeil said in a statement via email.
Such campaigns, however, typically come with more concrete incentives. At Kira, for instance, the developer reduced its requirement for deposits to 10 per cent rather than the more typical 20 per cent.
And at Mode, Jones said the free wine is part of a package that includes limited-time price breaks of $10,000 to $20,000, depending on the size of units.
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