Vancouver Condo Info

If you live in Vancouver then you know about the Province newspaper. Thats the handy small tabloid-sized daily paper with headlines like ‘DEADLY KILLER KILLS MAN DEAD’ and ‘WET T-SHIRT CONTEST ENDS BADLY’ as opposed to the other local canwest paper (the Vancouver Sun) that uses more multi-sylabic words, i.e. ‘CATASTROPHE SEEN AS DISASTER LOOMS’.

Anyways, my point is that the Province has always been there for us simple folk. It was the paper to turn to when you wanted to find out what Jessica Simpson is wearing and whats on tv tonight. You could also often find heart-warming stories about 23 year old real-estate investors and which new condo developement they are lining up to buy in.

The one thing you would never find in the Province newspaper was articles like this:

Canada Mortgage and Housing Corp. recently announced moves that critics say will drive many homebuyers to the poor house, as it were, and could leave Canadian taxpayers on the hook.

CMHC is offering mortgage insurance for interest-only loans and on amortizations of up to 35 years, while also scrapping the typical $165 application fee on high-ratio loan products for people with a down payment of less than 25 per cent.

With an interest-only loan, a borrower can pay interest only for the first 10 years, then pay both interest and principal.

Payments are initially low, but since the loan must still be paid off within the original amortization period, payments balloon as the principal starts being paid down, even more if interest rates rise.

That’s right, ladies and gentlemen – I am very sad to report that the Province newspaper has joined the dark side of real-estate negativity, and it gets worse. Much worse:

If a person spends 10 years paying down only interest, he or she saves nothing if the value of the house doesn’t appreciate during that period.

In fact, many people are now buying at the top of a housing boom, particularly in Western Canada, and face the likelihood of selling after the market has cooled off.

Said the Edmonton firm Hendrickson Financial in a recent commentary: “When home prices begin declining, homeowners who have recently purchased with 100-per-cent financing will have to come to terms with owing more than their home is worth.”

That’s when you get people walking away from their homes — when they have no equity to lose and can start all over with a cheaper house that will require smaller payments.

Can you BELIEVE it?!? The TOP of a housing boom?!? Walking away from their homes?!? What is with these people?!? What makes them so cranky that they feel the need to ruin our party? Is it jealousy? Some sort of new-found intellectual ellitism?

I don’t know about you, but I intend to write a strongly worded letter of complaint to the editor. It will be brief. It will contain my own ‘facts’ and ‘figures’, but one thing that it will NOT have is words with more than two syllables.

A lot of people want to know whats going to happen with Vancouvers red-hot real estate market. Will it keep going up, up and away? Will it level off? Or will demand dry up sending prices plummeting?

Well, before you pick up that phone to dial the psychic friends hotline, you may want to save your $3.95 per minute and just read the signs.

The signs I’m starting to see around vancouver say ‘price reduced‘.

And I just have to ask.. WHAT ARE THEY THINKING?!? Has no one told these people that this is a red-hot market? There is no need for ‘price reduced’ signs. If you are having a problem attracting buyers you need to RAISE your asking price not lower it! This is basic psychology. Higher priced things are more VALUABLE than lower priced things. And besides, how else are we supposed to convince someone that they need to BUY NOW or be forever PRICED OUT of the market?

House prices seem to be ‘in trouble’ in the good ol’ USA. If they only had the foresight to host the winter olympics maybe the US housing market could be saved eh? Today’s story in the financial post:

The United States could be heading for its first outright decline in national house prices on record, according to several analysts watching the rapid deterioration in housing statistics south of the border.

Further weakness in the housing sector could stunt construction activity and slam consumer spending, leading to slower growth in both the United States and Canada, analysts said.

“The slowdown in house price inflation has been extraordinarily rapid,” Gabrielle Stein, chief international economist at Lombard Street Research said in a report this week.

Those of us living in Vancouver should perhaps take a moment to be thankful for our rock-solid housing market, and the fact that due to beefed-up border security we are completely and utterly protected up here from whats happening in the US. It’s almost as if we are in a protective bubble!

Aaaagh!
No! Say it isn’t so!

I go out innocently looking for news of a bright and shiny future in the vancouver condo market and instead I am most rudely confronted with this:

The Greater Vancouver condominium market may be at an inflection point in the real estate cycle. One result could be an over-supply and/or over-priced product in many markets. There appears to be a very real risk of over supply beyond the forecast demand given the escalating market prices in some new condo submarkets in Greater Vancouver.

That bit of news from the PricewaterhouseCoopers (PwC) June 2006 issue of the Greater Vancouver Condominium Market Review release today. The news release is here.

Who are these PricewaterhouseCoopers anyways, and how can they SAY that?! It not supposed to happen here! Vancouver is different!

It looks like the lawsuit filed by George Dengin against his business partner Mark Chandler has not stopped construction of H+H at Homer and Helmken downtown or the construction of Garden City in Richmond. It is however stopping people from moving into the recently completed Tribeca condo development. There was a news story on bctv the other night about some of the fun and games going on in Vancouver’s condo market.

The seedier underside of Greater Vancouver’s housing boom is being exposed Monday night by a series of lawsuits and counter-suites between some of the city’s highest rollers. The main combatants, two developers both with checkered backgrounds, and now the battle has drawn in a man who’s become known as Vancouver’s Condo King (Bob Rennie).

Construction on H+H and the Garden City condo towers continue despite the lawsuit, leans and a stop-sale order from the superintendent of real-estate. Mark Chandler claims to have been paying workers out of his own pocket for the continued construction, up until last wednesday when his lenders started to fund chandler again. Both H&H and GardenCity towers are about 70% sold, but until this lawsuit is resolved buyers may suffer the same fate as buyers at another Chandler property- Tribeca. The condo’s and Tribeca are finished and ready for people to move in, but because of the current investigation it remains empty. This means that people who have purchased units in Tribeca and given notice at their current residence will need to find a place to live until this issue is resolved.

George Dengin’s lawsuit alleges unusual or apparent dishonest conduct including chandlers alleged failure to put money into trust and selling some units twice. Bob Rennie supports dengins lawsuit – he has provided an affidavit to support Dengins claims and has stopped marketing chandler properties.

Chandlers lawyers have filed a statement of defese and a counter claim naming Bob Rennie and George Dengin and their businesses, with Chandlers defense alleging that it “struck him at a particularly vulnerable time for the purposes of trying to take over ownership of the partnership”.

The counterclaim alleges that dengin and rennie have made false allegations of wrongdoing against the Chandler and that they filed their claim “on the basis of false, or exaggerated and unsubstantiated allegations.”

In the bctv newscast Mark Chandler was quoted as saying “I feel that he’s really trying to take the keys to my company.. I thought he was a friend. I thought he was a trusted friend”.

Rennie and Dengin did not reply to that news story directly, other than Bob Rennie making a statement that he is “a marketer not a developer” and that he has “no intention of moving into developement”.

This link was left in the comments yesterday by ‘anonymous’ (nice name by the way). The newest twist on house marketing in the U.S.A. is to go beyond ‘home staging’ and actually hire actors to play the part of a happy family ‘living’ in the house during a sales presentation. If you like reality tv, maybe you’ll like fake reality?

SANTA CLARITA – The scent of baking scones wafts through the house as children’s feet pound the floors.

“Dad” rushes to get things ready as “Mom” lounges on the couch.

It’s a birthday party for Camille Chen. “Husband” Jaason Simmons has breakfast in the oven and there’s about to be a surprise: He and the kids remodeled the den into a game room and won’t Mom, a notorious poker fiend, be pleased.

Except Chen and Simmons aren’t married, the kids aren’t theirs, they don’t really live in the house and they’re all Centex Homes marketing director Amanda Larson’s employees.

They’ve been hired to lounge around a model home, read magazines and occasionally pretend like they’re having breakfast.

Just how effective would this be? Do you think that the emotional connection is strong enough that people pretending to have a wonderful life in a house would increase the money paid for it? And how long till we see this technique put to work in Vancouver? Would you even spot it?

Concord Pacific is having a ‘moving sail and sales’ promotional event on July 29th with ‘bbq, live entertainment, free parking and prizes’. Hmm. I thought this was a super-hot market where you just hang up a shingle and prospective buyers stomp all over each other for a chance to bid on your property. Why are we having to lure people to a condo sales event? Kinda smacks of desperation.

Here’s what I say: BBQ is good, but I think I’d rather have it with friends, thanks.. My time is worth more than free parking and the chance to win a prize, so what else have you got? I’ll be happy to come and look at your condo sales pitch, but time is money. So at the very least you should match the common time-share sales pitch you get in Mexico, that is:

1) free car rental for a day
2) free tours of the ‘ruins of east hastings’
3) free food and
4) as much free booze as they can try to get into you before they try to get you to sign the paper work.

This is where I’ll start to consider coming to your sales pitch, anything less than that and I’m afraid its just not worth my time.

Last week saw the destruction of one of the first buildings built at the UBC campus to make way for a new high-end condo development.

The Vancouver School of Theology’s Chancellor Building, inspired by English architecture, was built in 1927 and was one of the first major structures to be built at the Point Grey campus.

The chairman of the Theological Neighbourhood Planning Group said it was a “painful decision” to demolish it, but says the school needs the money to renovate its main building.

“We had to make a judgment call between this building and the other building, because one of them had to help pay for the other,” said Bud Phillips.

There are no heritage protection guidlines on campus and UBC is not answerable to any municipality. Those clinging to the past should keep in mind that everything new eventually becomes old, and UBC’s heritage condo stock will flourish in the far-off future.

article on cbc

Say you own a condo in Vancouver and a house in Ottawa.. If you’re an MP that needs to move back and forth than you might need a little extra help covering those bills right? Well no problem! It turns out that MP’s get a $75 per day meal allowance that can be used to pay down the mortgage.

The per diem is in addition to a $25 daily accommodation allowance MPs receive year-round if they own a second house or condominium in the capital, and using it to buy a home is allowed despite a rule forbidding mortgage payments from a separate $24,000 expense allowance.

Combined, the per diem and the accommodation allowance could add up to $17,225 a year for house costs and mortgage payments if an MP spends only four days a week in Ottawa while Parliament is sitting.

The $25 daily accommodation allowance is available without receipts throughout the year as long as the MP does not rent out the residence.

Though the $75 per day comes from a meal allowance, I think it should be noted that eating houses is ill-advised and can lead to indigestion and nausea.

Interesting article in the New York Times about owners refinancing with adjustable rate mortgages. $400 billion worth of this type of mortgage is resetting this year in the U.S., next year it’s set to be one trillion dollars worth.

It is the latest twist in the gravity-defying world of the high housing prices and exotic low-rate mortgages: As monthly payments on adjustable-rate mortgages are starting to balloon, many Americans have found a way to put off the day of reckoning.

They are refinancing with new adjustable-rate mortgages that keep monthly payments low — for now, that is, though their payments will likely rise even higher in the future.

I guess it will be easier to pay the full load of debt in the future?