How Avesdo can help you win in today’s market
Written by Ben Smith
Each year over 200 of our developer and sales clients process around 20,000 transactions through our platform. With that level of data, we have an up-to-date picture of what’s happening in the new home market across Canada.
It is clear from the data coming out of May that sales are down significantly. This has more to do with the fact that over a dozen projects delayed their launches. When you consider that Q1 absorptions were some of the highest on record, then it makes sense that supply was low for May sales.
Prices are also down. But down from what? From what we can see, it would appear that prices are trending at numbers seen in late 2021 but still showing double-digit increases year over year in most markets. With construction costs at an all-time high, there is no room for prices to fall much further and prices will remain fairly stable for upcoming launches or they won’t launch at all – only further choking supply.
Looking at outside data, increasing immigration is adding to demand and skilled workers from South Asia are leading the charge. These overall volumes are on track to reach lofty targets set by the Canadian government at over 400,000 new immigrants per year.
On top of immigration, demand is further fueled by the two largest generations – Millennials and Baby Boomers – who are both in buying cycles as the former are upsizing with growing families and the latter are retiring and downsizing. The need and desire on the demand side are there, but this is offset by the ability side of the demand equation which is deteriorating daily as interest rates and general prices continue to rise.
Four themes will define the market over the next 12-18 months:
- High cost of everything including debt
- Low supply of goods and labour
- Heavy attacks on demand affordability
- Significant uncertainty
Let’s look at each of these, one by one, and discuss how Avesdo can help.
1. Lower your costs
For our clients, Avesdo is proven to impact the following costs positively by either reducing or eliminating them – from paid labour, piles of paper, expensive couriers and your time.
With our proprietary industry-specific workflows and automations, clients realize substantial savings by:
- Requiring fewer headcount to run the same sales program;
- Reducing the expensive cost of printing and couriering pages and\ pages of contracts, amendments, disclosures, etc;
- Eliminating many costly errors that are normal in a manual or semi-manual process – some of these can be measured in the millions of dollars;
- Reducing the time it takes to do everything helps developers sell and close quicker reducing massive monthly interest charges at project completion.
2. Do more with fewer resources
Everything is scarce. For developers that means they are struggling to get materials to build. For sales and marketers, they are struggling to finish presentation centres, complete brochures, and find staff at every level in the sales function to write contracts, do reporting, chase deposits, manage allocations, direct strategy and more.
Using Avesdo to run a sales program requires less contract writers, less sales administrators, and with many of the newer strategic features in the Avesdo TMS, a sales manager and sales directors can run more sites at a time, saving on a sales team’s most expensive members.
In addition, by leveraging the integrated online presentation tools and/or integrating with many of the amazing front-end marketing interactive tools available in the market, you can start your sales launch even before your presentation is complete with fewer materials needed. Avesdo TMS does not require expensive renderings to run and you can start your program with most of the development materials a developer would already have for their development permit.
3. Maximize available demand and find more in new markets
With interest still strong, but offset by affordability, developers will need to find strategies to maintain their share of a smaller pool of buyers or open up affordability to access a larger pool. They can do this in a number of ways.
With the ability to send inventory and receive purchase requests digitally, developers are targeting buyers outside their project markets and pulling them in. If you are seeing Torontonians move to Ottawa, run a Toronto sales campaign through Avesdo for your Ottawa project simultaneously with your local program.
Seeing strong demand from South Asia? Send an allocation to your overseas sales partner without taking anything off the market locally and manage all inventory and sales from a centralized source of truth. With the Avesdo TMS, it’s easy to track requests, allocations, reservations, contracts, and firm sales all from the same source of truth. Multiple sales teams in multiple locations can all work on the same project as if they were in the same room.
To open up larger pools of buyers many developers are looking to new markets to launch their future projects. In the past, launching a project in a market outside your region would require you to set up an entirely new office and infrastructure to service a new market. With Avesdo, everything is accessible in real-time. You can manage a sales program from anywhere, anytime. Whether you hire on the ground staff or a local consultant team, you maintain complete control in one central cloud-based source.
4. Gain certainty before committing to a launch
Traditionally, worksheets have been a tool used in high-demand environments to distribute buildings through realtors. In tougher demand scenarios, worksheets can be used to understand demand depth, pricing, and absorption patterns from buyers and realtors before a single allocation or sale has been initiated. With our allocation planning tools, plan out your distribution in advance and gain certainty before going to contract on a single home and use our proprietary e-commerce solution to take an initial deposit and reduce time-induced leakage from an uncertain buyer.
One of the first things I changed when I joined Avesdo was to align our pricing model with the industry. In switching to a transactional pricing model where developers pay on a per-sale basis, we became as committed to your success as you are, because our revenue depends on it. With Avesdo, you can set up your site, generate your pricing models, start collecting leads and worksheets, monitor and plan your demand and pay us nothing until your sales start going firm. There is no other software provider in the new home market willing to partner with developers sharing in the sales risk in this way. We are all in.
In uncertain times, the ability to cut costs, create efficiencies, maximize demand that exists prior to committing, and do all that on a success-based pricing model is why I think the Avesdo TMS is the most valuable tool for developers.