Recently, I visited several model-room visits for condominiums currently on sale in my hometown of Oita.
Not long ago, one could casually drop by a model room and pick up a brochure detailing the building overview, floor plans, prices, and sales status. Today, however, model-room visits are far less spontaneous—everywhere you go, there is an unmistakable "No Window-Shopping" vibe.
To tour a model room, you must first make a reservation. For popular developments, it can take over a week just to secure an appointment. Once your slot is confirmed and you arrive at the specified date and time, you are ushered into a clean private room. There, you must complete a substantial questionnaire asking for your address, name, age, purchase purpose, family makeup, current home-ownership status, annual income, and more.
After you finish (and submit) the questionnaire, you wait. This waiting period often feels surprisingly long as the sales representative reviews your answers, researches you online, and prepares targeted questions. Before you know it, you’ve spent over 30 minutes in that private room. If you then inspect every detail of the model unit and watch the promotional video, the visit easily exceeds an hour. I once spent 2 hours there.
Today’s condominium sales are generally conducted in multiple phases. Shortly after a model room opens, only a rough price range may be set; exact figures sometimes remain undecided. In such cases, the sales team gauges visitor reactions and uses that feedback to help determine the final prices. Prestigious developers with deep pockets especially follow this approach, allowing ample time for each sales phase. Their ideal outcome seems to be leaving about 5 – 10% of units unsold after completion. If a development sells out too quickly, they view it as having set prices too low—and therefore missed out on potential profit. As a result, when first-phase sales outperform expectations, they have no qualms about raising prices in subsequent phases. Consequently, even under identical conditions, unit prices can vary significantly depending on the sales timing.
In this way, recent condominium sales have increasingly been driven by sellers responding to market conditions.
Reprinted from Real Estate Management Journal Co., Ltd. “Weekly Real Estate Management” (with permission)
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