This article is from the Australian Property Journal archive
LIFESTYLE Communities have reacted to an independent review of their marketing practices and vowed to restore public trust after witnessing an increase in cancellations following an ABC 7:30 report.
Lifestyle Communities revealed the fallout of the ABC story during the Annual General Meeting, that the company has seen a rise in cancellations in the year to date.
In the YTD to 31 October 2024, the company had 89 new home sales and 64 cancellations. No new land contracts were signed during the period.
Last month the company revealed that its cofounder James Kelly will step down.
Chair David Blight said consumer sentiment has been damaged by media coverage which has had an impact on sales and cancellations.
“It is clear the adverse media coverage has impacted our lead indicators, sales rates, and deposit cancellations,” he added.
The company revealed that prior to ABC report in July 2024, it was exceeding 1,000 monthly new leads every month, peaking as high as 1,212 in March. However since the ABC story, monthly new leads fell from 1,131 in July to 783 in August, 687 in September and 525 in October.
At the same time, gross sales per month which averaged 50 for the first six months of 2024, has fallen to 24 in July, 28 in August, 21 in September and 16 in October.
Blight said Lifestyle’s key challenge from here is to convince new customers to look past the media coverage.
But Blight said very little in response to the independent review.
“As part of our response to the media coverage, an independent expert was appointed to review the fairness of our sales processes and customer disclosures.”
Blight said that whilst the review found many of the company’s key policies were in line with regulations and industry competitors there were “some inconsistencies were found in marketing collateral.”
Blight said further considerations include the potential to introduce choice within the fee structure, along with ongoing updates to policies and marketing collateral.
He added that the LIC Board and Management team are considering the report.
“Any definitive changes will be implemented following finalisation and testing.”
Meanwhile Blight said conditions are expected to remain challenging for the remainder of FY25. Compounded for Lifestyle as a result of recent media coverage.
He highlighted low consumer confidence, driven by elevated inflation and multiple interest rate rises, resulted in deteriorating conditions in the Victorian property market progressively throughout FY24.
He said the focus is currently on restoring reputation to improve sales, strengthening the balance sheet, resolving the VCAT dispute, and managing the CEO transition.
