Whilst the NZ property market continues to bump along at historic lows (just 4,469 in October), the UK market is looking considerably worse as it approaches 50 year lows with just 59,000 properties sold in September which was 53% down on a year ago, and a staggering 62% down on the peak of December 2006.
In such circumstances the challenge facing homeowners is the classic – do I move or do I ride out the storm? – however for builders and property developers the issue is not so clear-cut or so easy. Their property project is not something they can sit on until the market hopefully one day recovers – they need to liquidate their asset.
There have been innovative attempts to sell property as reported in the UK earlier this year with homeowners turning to “raffles” and other competitions to find ways of “selling their home” as a prize draw. The concept is simple – find 10,000 people who buy a £25 ticket each – answer a simple question and you collect £250,000. However as this article from the The Telegraph shows it is no easy task – not least of which is the legal hurdles that a seller needs to go through. (Any attempt to undertake such a process in NZ would need to be assessed as to the issue of complying with all relevant local laws).
So one property developer sitting on an £8 million serviced apartment project has applied the same appeal of the “lucky ticket”, but wrapped it into a highly structured business service complete with charity fund raising and service company sponsorship, as profiled in this Telegraph article.
Win a London Pad offers the lucky winner an investment property likely to return £500,000 per annum – all the lucky person needs to do is receive one of 200,000 entry tickets by buying an MP4 player (£60) or subscribe to to a broadband provider, open a bank account or participate with one of the 12 corporate sponsors.
The mechanics are fairly simple – for the introduction of a customer to one of the partners the developers gets a referral fee, added to that is clearly a margin on the MP4 player (with a portion going to the charity) – at the end of the day with enough marketing (this blog I guess being a part of viral marketing – no connection or pecuniary interest, I can assure you) the developer should end up with his £7 million, the charity (Great Ormond Street Hospital) should net somewhere close to £600,000 – the business partners should gain new subscribers and one lucky individual should end up with a investment property.
Now that is the theory – as to the reality and facts behind how this works and the likelihood of success; I am not going to go ino this. All I want to highlight is that in situations as both the UK, NZ and many many property markets around the world find themselves at the moment, a little bit of innovation is needed to ease the property market – one sale at a time!
interesting way of doing things
Here’s an innovative way of selling but not nearly as exciting as that described. If a seller receives an offer, and it might seem quite low, have the vendor accept the offer subject to them being able to purchase a replacement property within 2 to 4 weeks. If the vendor doesn’t find a good deal within timeframe the deal falls over and they get to keep their house. If they do find a good replacement house/deal the buyer is happy because they feel they got a good deal. Increasingly, buyers won’t buy unless they feel they’re getting agreat deal – so let’s do some great deals!