Elite AgentFEATURE INTERVIEWSSELLING + MARKETING PROPERTY

The Very Best Laid Plans: Inside the minds of successful project marketers

Sold: There has been a lot of press about the incentives that investors are able to receive in buying off the plan. Why do you think this method of property investment has become so popular?

I believe itโ€™s the current โ€œflavour of the monthโ€ because it allows developers to create a product that can suit the below $600,000 market, thus avoiding stamp duty in NSW. Similarly, purchasers in Victoria make massive stamp duty savings on all off the plan sales. Younger people who are buying their first home often want to stay close to the inner city suburbs and all the amenities that these areas offer and see off the plan apartments as an affordable secure inner city investment. Buying off the plan, when the price is right, helps them to achieve this goal. There are a couple of other factors relating to the current undersupply of accommodation in Australia, and itโ€™s also a passive entry into purchasing the property because of the delayed payments. Often, it also gives first homebuyers the chance to save a larger deposit, thereby reducing the amount they need to borrow and giving them more equity in the property at settlement. It also gives investors great financial benefits in depreciation, stamp duty savings and extended settlement terms, thus allowing the potential for capital gain prior to settlement.

Yal: In the last 5 years we have somewhat lost the investment market due to the incentives that have been offered to first home buyers including stamp duty incentives and the first home owners grant. This really boosted the owner-occupier and especially the first homebuyersโ€™ market. The recent government incentives offered to investors has rejuvenated the investor market.

For off-the plan buyers there can also be a few bargains to be had, depending on how quickly or desperately the developer needs pre-sales to obtain finance. There are a lot of opportunities to negotiate not only the price but also the final finishes that can be altered if requested prior to construction.

Contractually there is a lot of protection for off the plan buyers. At the end of the day, the protection that we offer in Australia to consumers is tremendous, so it really is a low risk investment. When you are buying off the plan, almost everywhere else in the world, the consumer pays progress payments throughout the construction of the development; in Australia, this is not the case. The developer gets no money from the consumer, even the deposit is held in trust, until the project is complete.

Sold:With traditional Real Estate Sales, you have a physical dwelling to show. When you are selling โ€œoff the planโ€ you donโ€™t have this luxury. How do you give buyers a feel for what they will actually be purchasing?

John: We put a lot of work into planning how we will market each development. For example, for a big development like Divercity we have invested in a display centre. The layout of this centre has been planned down to the finest detail to take the potential buyer on a journey, giving them a thorough understanding of the development, its features and the apartments. Everything within our display centre is laid out in a logical sequence (sales track), working from the big picture right down to the minute details. We have built a kitchen, bedroom and bathroom that are exact replicas of what you would see in the finished development. In this showroom, people can touch and feel the fixtures and fittings and it gives them an almost complete picture of the finished apartment. We also use several other tools, such as high quality images on display, a model of the finished building, brochures and other marketing materials. We try to get inside the minds of our potential buyers and really work out what will help inexperienced buyers make an informed decision about purchasing the property. We have a small publication coming out soon addressing โ€œwhat to look for when buying off the planโ€.

Yal: The amount of marketing investment we make in a particular development very much depends on the size of the development. With smaller developments, we would not set up a display centre, but we will get as close to the site as possible to set up an office which will be our โ€œhome baseโ€ for the period of the project. We will also provide samples of the finishes and the appliances for the prospective buyer to touch and feel so they get a physical representation of what they are buying.

As we cannot provide anything tangible to our buyers, we rely heavily on the quality of the print marketing material such as floor-plans, finishes schedule and brochures including both the internal and external artistโ€™s images. Artistโ€™s impressions are so real these days, and they are getting better every day. With these marketing tools, we are able to assist the buyer to really visualise the final product.

Sold: What advice would you give to anyone starting out in Project Marketing?

John: You need to have a fundamental knowledge of the market and construction. You also need to be patient, as project marketing is not just about building a fancy display unit. Each project takes 6 to 12 months of planning and preparation and the money doesnโ€™t come in overnight. But it is exciting because there can be large volumes of sales when you get the formula right.

I love the variety in the work. Itโ€™s not just about selling a product: we get to create the product, and itโ€™s always exciting looking at new materials, evolving trends and working out new ways to create and meet demand. Every launch you have your heart is in your mouth, but itโ€™s also a great adrenaline rush when you sell 50-60 units in one hour!

Yal: My advice – youโ€™d better be prepared to work hard! Itโ€™s not just about spending 30 minutes at each open house on the weekends and you really need to have the knowledge of a builder/architect to do really well.

The challenge to create a finished product before construction even commences is very satisfying for project marketers, or at least for me. If you prepare your marketing plan strategically by researching and knowing your product, the sales will follow.

Sold: Will buying โ€œoff the planโ€ continue to be this popular in the future?

John: The GFC did slow things down, but we had a big year in both Sydney and Melbourne. There are different social and political factors that will affect the success of various developments in various states. Melbourne has a larger supply at the moment, purchasers are taking longer to make a decision, and they have more choice. Sydney has a greater demand, and less supply, so product has sold very quickly. Sydney is probably the place to be this year.

Yal: In the late 90โ€™s during the boom, we were selling properties off the plan over the phone, but we havenโ€™t seen days like that since then. (laughs). Because of the shortage in housing, I canโ€™t see that the future would not be bright, we have gone through a big downturn, so history suggests that there may be more good times ahead for off-the-plan buyers.

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Samantha McLean

Samantha McLean is the Co-Founder and Managing Editor of Elite Agent and Host of the Elevate Podcast.