Real estate developers are adopting innovative marketing strategies to attract buyers amid a challenging market, utilizing contests, vouchers, and significant discounts. Initiatives like Interconstruction’s contest offer a chance to win an apartment with a purchase. Despite a slight increase in reservations, the overall market remains stagnant, prompting developers to enhance incentives such as covering notary fees and providing favorable financing options. Companies like Altarea are optimizing costs and reconfiguring projects to meet current demands, raising concerns about potential housing shortages in the future.
Innovative Strategies by Real Estate Developers
Facing the challenge of attracting buyers for their housing projects, real estate developers are getting creative with their marketing approaches. They are implementing a variety of enticing strategies, such as contests, furniture vouchers, exclusive sales, and significant discounts to draw clients in.
Exciting Contest: Win an Apartment!
One standout initiative is the contest named “one apartment purchased, one apartment to win,” which was introduced by the developer Interconstruction in early November. Customers who purchase a property from a selection of around 400 eligible apartments in Île-de-France will have the chance to enter a draw for a studio with parking in Drancy, located in Seine-Saint-Denis. Antoine Guillorit, the strategic director at Interconstruction, explains that instead of simply trying to offload their inventory, they aim to foster a more positive atmosphere to attract potential buyers. He acknowledges that this marketing strategy also serves to enhance the developer’s visibility in a competitive market.
Guillorit emphasizes the emotional impact of their promotional efforts, stating, “For the same budget, I can either provide 1,500 individuals with a small benefit, which won’t significantly affect their monthly mortgage payments, or I can offer one family an apartment, which feels much more meaningful.” This approach reflects a more personal touch in the sales process.
Additional Incentives: Vouchers and Free Kitchens
The promotional campaign is further amplified through the private sales platform Showroomprive.com, where it is accompanied by a furniture purchase voucher, aimed at increasing the appeal of the offer. Interconstruction is not alone in this endeavor; many developers are rolling out similar promotions in response to the ongoing crisis in the new construction sector, driven by escalating construction costs and a significant decline in demand.
Although there has been a slight uptick in new home reservations in the third quarter, the numbers remain dismally low, with the inventory of available homes continuing to decrease, as reported by the Ministry of Housing and Urban Renewal. Since April 2022, housing reservations have dropped sharply, halving in just eighteen months. The total number of homes on the market has also been cut in half, reaching its lowest point since late 2018, with only 13,947 homes available in the third quarter.
In the past year, the discrepancy between the number of reservations and homes marketed has led to a notable reduction in available stock, with a decrease of 9.6% year-on-year.
To further entice buyers, some developers are offering significant discounts or even free kitchens with each reservation, as demonstrated by Kaufman & Broad’s recent promotions. Private real estate sales are gaining popularity; for instance, the startup Handee organized a private sale via the Veepee platform in September, featuring over 100 properties with discounts of up to 89,000 euros.
Additionally, the practice of developers covering notary fees has become increasingly common, with major firms like Nexity providing this benefit to first-time buyers for the past two years. Financing options have also expanded, with many developers negotiating favorable loan terms with banks for their clients.
For example, Altarea is offering advantageous credit conditions and negotiated rates for first-time buyers, allowing them to benefit from a zero-interest loan in high-demand areas in 2024, with no down payment required. “We make it possible for individuals to own an apartment with monthly payments comparable to rent, without any initial payment and without having to pay before moving in,” explains Olivier Taravella, president of Altarea.
Altarea has also focused on minimizing costs for each housing unit, ensuring every square meter is utilized effectively, alongside reducing construction expenses and their profit margins. To adapt to the current market constraints, Altarea’s real estate projects have undergone significant revisions and reconfigurations. Vincent Ego, the general director of the Promotion division, notes, “Some projects have been shelved entirely as they were conceived years ago and no longer align with current market needs.” The Federation of Real Estate Developers expresses concerns over a potential housing shortage in the coming five years due to the slowed pace of new developments.