Survey Says Builders are Getting Better in Canada's Largest City

Written by Posted On Wednesday, 05 September 2007 17:00

It’s the hottest summer on record for new home activity in the Greater Toronto Area. Total sales are up almost 60 per cent compared to 2006, and sales are running 15 per cent ahead of last year’s pace.

That’s not all the good news for Toronto-area builders. A new report by J.D. Power and Associates says that builders are improving steadily in customer satisfaction. The latest survey of new home buyers shows that builders improved customer satisfaction scores by 12 per cent compared to last year.

“By any measure, this level of improvement is impressive - and consumers are the beneficiaries of these gains,” says Darren Slind of J.D. Power and Associates. “It’s obvious that many builders are listening carefully to the voices of their home buyers and responding with an improved new home purchase and ownership experience that more closely matches customer expectations.”

The survey is based on the responses of 5,158 new home buyers who closed their purchases in 2006. Buyer are asked to evaluate their builders in the areas of sales staff, design centre, home readiness, customer service, price/value, physical design, home quality and location.

The GTA market average satisfaction has increased to 686 on a 1,000-point scale, from 664 in 2006 and 612 in 2005. Builders improved in all areas, but J.D. Power says the most significant gains were in home readiness and customer service, which the home buyers consider the most important factors.

When problems do arise, customers want their builders to respond in a timely manner, the company says. “Builders with the most highly satisfied customers work closely with their trade partners to schedule service response to minimize inconvenience and aggravation for the homeowner,” says Slind. “These builders also carefully analyze their home quality and repair records to uncover the root causes of construction problems. They understand the goal is not to achieve proficiency in fixing problems, but to prevent them in the first place.”

But the survey also found that there is a “large and growing gap” between the ratings of the best and worst builders, spanning 511 index points. “It appears that the leading builders may be starting to pull away from the pack,” says Slind.

Mattamy Homes was the top-rated builder in survey for the second year in a row. Ratings for several large builders can be found here .

Mattamy is also on the list of finalists for the Tarion Warranty Corporation’s annual awards of excellence. Tarion, the provincial regulator for Ontario’s new home industry, has been criticized over the years for being too builder-friendly and for not making consumer protection its number one priority. And not all new home buyers think that builders, or the regulator, are doing a better job.

Toronto real estate lawyer and Toronto Star columnist Bob Aaron says that when he recently wrote a story about Tarion, it got more reaction than anything other column he’s written - and almost all of it was negative toward Tarion. Ontario Government Services Minister Gerry Phillips recently told The Star, “I do hear from people quite regularly who are unhappy with Tarion and I want to get an objective analysis.” A study is being done to gauge satisfaction with the warranty program.

Ottawa real estate sales rep Lana Waters, who volunteers with the advocacy group Canadians for Properly Built Homes (CPBH) (www.canadiansforproperlybuilthomes.com), says it’s difficult for buyers who have problems with their builders to get claims settled by Tarion. She says that Tarion acts like an insurance company that will require you to prove your claim, and that the claim process is complicated. “Municipal government officials involved in the home construction process usually acknowledge home construction industry and warranty program problems, but often simply advise the homeowner that they can settle their issues through civil litigation,” says Waters. “Given the time and high costs involved in the legal system with no guarantees of success, the courts are not a viable option for most Canadians.”

She says that leads to many homeowners who “quietly sell their flawed homes without disclosing the known problems to potential purchasers, despite the fact that sellers are required by law to disclose known defects. Known as ‘patch and run’, this puts the true condition of all listed real estate into question and presents a serious problem not only for home purchasers, but also for Realtors.”

Waters says the CPBH recommends that all home buyers hire a qualified home inspector before purchasing a house, regardless of whether it is newly built or an existing house.

The CPBH is also lobbying Canada Mortgage and Housing Corp. to develop a measure of housing quality for new homes.

Slind says that “while there is still much work to be done,” quality improvements in new homes in the GTA “represent a tremendous accomplishment for the industry.” He says, “Builders who take responsibility for quality long before the pre-delivery inspection are leading the industry’s efforts to build homes right the first time.”

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Jim Adair

Jim Adair has been writing about Canadian real estate, home building and renovation issues for more than 40 years. He is the former editor of Canada’s leading trade magazine for real estate professionals, as well as several home building, décor and renovation titles. You can contact him at [email protected]

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