The chart above is interesting.
It shows the average weekly booked appointments with Aveo, the actual appointments where customers are seen at the village and the actual sales made.
Before the Four Corners program Aveo was booking just over 170 appointments a week and seeing about 135 people, then making 22 sales. This means 16% of people who came to the village purchased.
12 months later they book 150 appointments a week and see 105 people at the village and achieve 21 sales, or 20% of people who came to the village.
Slightly fewer people but more committed.
What is more, Aveo increased their prices by an average of 12% on resale stock over the 12 months. They have committed to increasing village prices in line with residential prices.
This is another interesting point. Is demand knocked today by residential housing prices? They were in the GFC; village sales stopped when housing sales and prices dropped overnight. This also happened in WA three years ago and hasn’t recovered.
But check out the declining green line in the chart – this is the option clearance rate across Australia over the past 12 months. It has dropped from 72% to 54%, with far fewer properties going to auction.
Aveo CEO Geoff Grady told analysts yesterday that retirement villages are a ‘needs’ purchase and sales are isolated from the property downturn.
Separately they have argued that with the sector building villages at less than half the rate required to maintain penetration rate of 8% of all people 75+ living in villages, demand is naturally strong.
Our research has always supported that villages are a needs purchase. People don’t want to move to a retirement village, they need to because of events in their life
This means demand far exceeds supply. Do you agree? How are your sales conversion rates?
