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Toronto New Home Satisfaction Survey

Consumer satisfaction for new home builders up in 2010

The recession that gripped the Canadian home building industry last year may have hurt builders, but it also had some positive effects for consumers. Not only did prices go down, but fewer sales meant that developers had more time to spend with customers, according to a survey made public Wednesday by consumer research firm J.D. Power.

“With fewer closings, builders could devote more time to customers,” said Adrian Chung, senior manager at J.D. Power.

“While the recession caused many builders to reorganize and even lay off staff, it meant that they could also concentrate on the product.”

In the 2010 survey of Greater Toronto Area home builders, 20 per cent of buyers said they received a defect-free home. Last year only 8 per cent of buyers said their home had no problems.

“That’s a big improvement,” said Chung. “The slowdown likely meant that builders had time to play catch-up.”

The first six months of last year was one of the worst on record for GTA developers as sales plummeted along with consumer confidence during the global financial meltdown.

The lack of sales meant that the percentage of buyers offered discounts almost doubled in 2009.

About 17 per cent of all buyers of new homes in the GTA received a discount, compared with 9 per cent a year earlier, according to the study.

“This is a clear sign of the impact of the recession and the resulting action that some builders were forced to take to salvage new home sales,” said Chung. “Builders traditionally try and hold pricing, but discounting was a sign of the times.”

Chung said it will be interesting to see if builders can maintain their higher satisfaction scores for the next survey. Sales have picked up dramatically in the first six months of this year and builders have had to ramp up staffing.

The builder with the highest overall satisfaction score in the GTA was Tribute Communities. The developer of low- and high-rise homes is expected to build about 1,000 homes in the GTA this year, including projects such as 1717 Avenue Rd.

The company also won the Ontario Board of Trade’s Business Achievement Award this week, the first time the award has been made to a home builder. Tribute shares the award with De Beers, the global diamond company.

In second place was Mattamy Homes, followed by Monarch Homes in third place.

J.D. Power, known for their market research in the automotive industry has been conducting their customer satisfaction surveys in Toronto since 2005.

Chung, an analyst formerly with the automotive group, said the firm decided to look at housing because, not unlike cars, it is one of the largest purchases a consumer will make. “They are both big ticket items that consumers do a lot of research on.”

But while satisfaction in the car industry has improved dramatically, with not much separating the top five from the bottom five, there tend to be more variances in the housing industry, said Chung.

“There is more complexity in a home. And you can find more issues in a home as you live in it over time,” said Chung.

Among the nine builders that had 150 or more closings in 2009, the Conservatory Group finished last in the survey. In second to last place was Fieldgate Homes.

“What it boiled down to was that they simply didn’t perform as well as the top guys,” said Chung. “This related to things that mattered to the consumer such as home readiness and customer service.”

Because there are so many people involved in a sales transaction, it is tough for the customer to have a sense of continuity in the home buying process, said J.D. Power.

One move appreciated by customers, says Chung, is the simple follow-up call.

“Following up with a customer after move in seems like such a simple gesture, but ultimately it reflects the conviction of the builder to deliver on the promises made to the customer,” he said.

Source: Toronto Star

July 29, 2010 in New in New Homes | Permalink


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Great blog.

Posted by: santa | Jul 11, 2012 5:36:14 AM

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Posted by: flowers delivery in germany | Jun 18, 2011 6:31:15 AM

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Posted by: Austin Home Builder | Jun 5, 2011 9:39:31 PM

It appears that the majority of home builders had too much on their plate before the mortgage crisis.

Posted by: San Diego New Homes | Apr 20, 2011 12:10:22 PM

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