Death of the Sales Centre?

Building a sales centre on the site of a future new condo development used to be the first thing that developers would do when launching a new project. Developers of Toronto condos typically would spend hundreds of thousands, sometimes millions in the construction of these temporary structures that were built to be torn down. Inherently wasteful but absolutely necessary to create an experience for the consumer to get a ‘feel’ for a theoretical building that only existed on paper and in plastic miniature.

With the condo market heating up like it’s 2007 once again, many developers are skipping the sales office all together. Some new developments downtown are basically selling out without even advertising at all – strictly through word of mouth, database marketing,  and selling to the agent (Realtor) community.

Another trend is selling before the sales centre has been completed. Without naming any names, there are several developers who in my opinion are wasting their money constructing these elaborate sales offices and model suites only to have the entire building virtually sold out by the time the sales office is completed. This is especially true for projects that are already geared towards investors and/or that have a high % of 1 bedroom units.

Clearly the new condo market is red hot, so why are so many developers still shelling out all this money to construct these sales centres?  What about taking that money and using it on alternative marketing channels or here’s a thought: build a better quality product at a great price to differentiate yourself from the competition.  Perhaps the answer is simply that we are talking about a very staid industry that is very slow to change how they do business.

Thoughts or comments? Contact me.