2009 Canadian New Home Builder Study
New-Homeowner Satisfaction in the Greater Toronto Area Declines Considerably
According to the study, overall satisfaction with new-home builders declines significantly in the Greater Toronto Area (GTA) for the first time since the study’s inception in 2005. This overall decline to 674 points (on a 1,000-point scale) in 2009, down 36 points from 710 in 2008 is driven primarily by decreased homeowner satisfaction in the home readiness and service/warranty staff factors.
“Given the challenging market conditions, some builders have had to make some very tough decisions regarding their staffing models, and service levels may have suffered as a result,” said Marc Thibault, real estate practice leader at the Canadian office of J.D. Power and Associates. “Some of the service levels that homeowners may have been promised or have come to expect from earlier experiences with the builder are not being realized.”
The study measures customer satisfaction of homeowners throughout the new-home purchase and early ownership experience. Customer satisfaction is measured across eight factors (in order of importance): home readiness; service/warranty staff; home quality; physical design; price/value; sales staff; design centre; and construction/site team.
The study finds that the total number of construction problems noted by homeowners following possession has increased to 27 problems per home in 2009 from 21 in 2008 (a 29% increase). Homeowners who experience fewer problems (between one and nine problems) are four times more likely to recommend their builder to friends, relatives or colleagues, compared with homeowners who experience 20 or more problems.
“To resolve these problems, the builder’s warranty team (including trade partners) is making an average of seven service visits, and each additional service visit translates into added costs for the builder and an added inconvenience for the homeowner, resulting in lost time and satisfaction,” said Thibault. “This decline in satisfaction may mean fewer referrals, which are especially important in a soft housing market. Builders depend on positive referrals from homeowners to drive as much traffic as possible to their sales centre and cannot be taken for granted.”
Other highlights of the 2009 Canadian New Home Builder Customer Satisfaction Study include:
Brookfield Homes ranks highest in satisfying new homeowners in the GTA market, with an overall satisfaction score of 861 followed by Mattamy Homes (834) and Tribute Communities (811).
The study finds that nearly two-thirds (64%) of homeowners were offered an incentive from their builder to purchase. While an upgrade credit was offered most often by builders (86%), price discounts and paid closing costs have the greatest impact on encouraging the purchase—considered by homeowners to be twice as important as other builder incentives.
The study finds that less than one-half (44%) of homeowners felt that their builder set realistic expectations and prepared them for what to expect with their new-home purchase experience.
While green initiatives are increasing each year in the residential construction industry, only 26 percent of homeowners say that their builder provided attractive green options for their new-home purchase.
The 2009 Canadian New-Home Builder Customer Satisfaction Study is based on responses from 2,699 homeowners within the Greater Toronto Area who purchased newly built single-family detached, semi-detached homes and townhomes. All buyers surveyed closed their home purchase in 2008. The study was fielded from March to May 2009.
