Continued focus on warranty service by production builders leads to new-homeowner satisfaction improvements in the Greater Toronto Area

After a sharp decline in 2009, overall satisfaction with new-home builders increases considerably in 2010 in the Greater Toronto Area (GTA), according to the J.D. Power and Associates 2010 Canadian New-Home Builder Customer Satisfaction Study.


Overall satisfaction improves to 699 on a 1,000-point scale — an increase of 25 points from 2009 and driven primarily by improvements in home readiness and the level of warranty service after move-in. Among GTA homeowners, 20 per cent report a defect-free home on delivery, increasing from eight per cent in 2009.


Builders have also made significant improvements in all service-related measures — in particular, the timeliness with which they respond to homeowner concerns and their commitment to the cleanliness of the home at the conclusion of the service visit.


The study finds that the frequency of follow-up communication by homebuilders to assess the customer’s satisfaction with their new home has increased to 55 per cent from 49 per cent in 2009. Among customers who receive this type of communication, overall satisfaction averages more than 250 points higher than that of customers who do not receive any builder follow-up.


Similarly, providing consistent communication to home buyers throughout the sales and building process has a considerable positive impact on minimizing perceived misrepresentation. The study finds that fewer homeowners perceive that an aspect of the experience was misrepresented — just 25 per cent of homeowners in 2010, compared with more than 33 per cent in 2009. 


“Following up with a customer after move-in seems like such a simple gesture, but ultimately it reflects the conviction of the builder to deliver on the promises made to the customer at the time of sale,” said Adrian Chung, senior manager and Canadian real estate practice leader at J.D. Power and Associates. “Customers really appreciate when the builder cares enough to close this loop, and maintaining communication with home buyers throughout the entire process will have a positive impact on customer satisfaction.”


The study measures customer satisfaction of homeowners throughout the new-home purchase and early ownership experience across seven factors: construction and home readiness; service/warranty staff; quality; physical design elements; price; sales staff and design centre. This marks the sixth year that the study has been conducted in the Greater Toronto Area.


Among production builders with a minimum of 150 closings in 2009, Tribute Communities ranks highest in satisfying new homeowners in the GTA market, with an overall satisfaction score of 828. Tribute performs particularly well in sales staff; design centre; home readiness; design elements and quality. Mattamy Homes (819) and Monarch (808) follow Tribute in the GTA market rankings.


New-home sales volumes decreased considerably in late 2008 and early 2009, and subsequently, the percentage of buyers who were offered price discounts has nearly doubled to 17 per cent in the 2010 study. 


“This is a clear sign of the impact of the recession and the resulting action that some builders were forced to take to salvage new home sales,” said Chung. “Despite these economic challenges, builders have been successful at not losing focus on what matters most to their homeowners as evidenced by the overall improvement in satisfaction.”


In addition, blog usage among homeowners to research their builders prior to purchase has doubled from 2008 to 22 per cent in 2010, making this social media channel more influential on brand reputation and purchase decisions than ever before.


The 2010 Canadian New-Home Builder Customer Satisfaction Study is based on responses from 1,864 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 2009. The study was fielded from April to June 2010.

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