Do Gifts, Including Luxury Cars, Really Close the Deal for High-End Condo Buyers?
With some purchases — skincare, food delivery, or alcohol — added gifts can seal the deal for the buyer.
But can free (and fancy) perks make a difference when it comes to one of life’s biggest purchases?
Increasingly, Toronto condo developers are dishing out added incentives for potential homebuyers in the form of free airline tickets, brand new Porsches, designer handbags, and more. While offering potential condo buyers perks in the form of unit upgrades has been used as a commonplace incentive for years, wooing them with lavish gifts is a relatively new phenomenon.
Last February, the King Toronto by Westbank development invited potential buyers to a swanky sales party held at Toronto’s Shangri-La Hotel. At the event, guests were invited to become the new owners of some of life’s finer things (if they weren’t already): Porsche 911s, Rolex watches, Holt Renfrew shopping sprees, and Hermes Birkin bags — that is, if they dropped dollars on one of the pricy condo units.
The units started in the high $800,000s and went up to a cool $8,000.000. The value of the “prizes” correlated to the amount spent, with the Porsches reserved for purchasers of the pricy penthouses.
More recently, another Toronto developer turned to Porsche cars for an added incentive for potential purchasers. Until August, purchasers of penthouses in Central — an up-and-coming building at 38 Widmer Street — will receive a shiny new all-electric Porsche Taycan. Notably, the building will also offer full electric vehicle parking; each parking space comes with an electric-vehicle charger.
“I think it’s an interesting promo in that it gets people to look at it, but whether it actually gets people to close the deal — that’s the hard part,” says Elliott Taube, President at International Home Marketing Group. “Buyers have to be excited to want to come in and see it and I think that creates that excitement, but it’s hard to say that it actually closes the deal.”
Taube points to the fact that — while it’s a “nice bonus” — most luxury buyers on that level can afford to purchase a $150,000 luxury car. If nothing else, however, it definitely draws eyes to the project, acting as a headline-making conversation starter (aka an effective marketing tactic).
For example, the conversation of the all-electric Porsche naturally lends itself to the electric parking features in the Central Toronto building, which leads to talk of other elements of the tech-forward condo. It’s as simple as that.
Furthermore, such incentives don’t involve denting the budget on the developers’ part relative to their potential impact. “If nobody buys, the incentive costs nothing,” says Taube. “You don’t buy the car ahead of time. Somebody has to buy the unit first, so there’s no out-of-pocket.”
When it comes to the non-luxury market, however, perks and incentives may become more important to buyers if they’re cash-driven. “This could mean cash-back, free maintenance fees, or something else that has a monetary value — we do that all the time,” says Taube. “This helps because it has a real cash value.”
It’s not just buyers who are rewarded with flashy gifts in the real estate world. “With brokers, we reward them with certain incentives to get them focused on our projects,” says Taube. “So, it’s really that same concept.”
Last month, at a realtor event hosted by Taube’s client Fernbrook Homes and Crystal Homes, a crowd of VIP realtors was told that anyone who sells five units at the upcoming Eagles’ Rest Estates development in Barrie by July 31 would be rewarded with a shiny new one-kilo bar of gold, an approximate value of $72,000.
Taube says the tactic didn’t hurt: the project is nearly sold out. “It looks like we are going to give away eight gold bars, which is beyond our belief,” says Taube. Whether this has to do with the prospect of a bar of gold or Barrie’s red-hot real estate market is up for debate.
The same can be said for the impact of a Porsche on a Toronto condo sale. But hey, fancy homes and fancy cars go hand-in-hand in the city, so one might as well pick up both at the same time