Vancouver Condo Info

Here’s your open topic post for Friday June 1st:

- REBGV sales stats for May 2007 available soon.
- Olympic size taxpayer subsidies for developers.
- Loonie and mortgage rates going up.
- Business council of BC economic outlook (pdf).
- Flipping the truth.

What are you seeing out there on the streets and sidewalks of Vancouver? Post your news, links, rants & anectdotes here!

With the current condo construction boom displacing rental stock some people are getting very frustrated with the state of housing in this city. Despite statistics of declining population growth and record levels of condo construction the rental market appears to be tight right now. I received this letter of frustration from Colleen last week, which with her permission I reprint here:

As a long time renter in the city I am very concerned about the possible changes to the moratorium on condo development at the expense of existing rental units downtown. The affordability of buying a condo is out of reach for most people in Vancouver. The rental costs for many of the condo’s recently built is extreme, given the ridiculous size of new apartments. Less than 550 square feet for two people isn’t living, no matter how small your murphy bed is. Accommodating desired population density in the city is not a justifiable issue-considering that the West End is all ready one of the {if not THE}most densely populated neighbourhoods in North America.

The developers who are concerned about accommodating population density do not live downtown in a 450 sq ft apartment. Nor are they likely to have an average combined family income of less than $80,000 annually.
Many of the owners of these new micro condos have 30 year mortages. Do you really think that these young, new owners are going to stay in their units longer than 5 years? Where will they go? After all, moving “out and up” to the suburbs in BC is not in the same league as moving from TO to Oakville, Burlington, Mississauga, Pt Credit, Guelph, Aurora, Kitchener, Paris, Ancaster, Waterloo, Waterdown, Dundas, Do I really need to go on??…….people require change to reflect their growth and development and their need for change and growth doesn’t change. Mountains or no mountains. Lets compare Ancaster, Ontario to Langley, BC..PLEASE!!

One bedroom rental units are averaging rents over $1000./mth with restrictions on storage, balcony use, pets, smoking, decorating , barbequing, feeding birds, children and subletting.
There seems to be two types of people in this city:
Those who invest and develop at a large scale and those who are forced to pay them at an alarming rate.

This is a case of the ridiculously rich and the rest of us. Why are we not considering the quality of life in Vancouver for its citizens as well as its development? Where are our elected, well paid politicians? We do not live in London, New York, Tokyo or Hong Kong. This is not Europe. We are Canadians-with our own histories, roots and expectations about how we live. This is what makes Vancouver such a beautiful and special place.

Sincerely,
Colleen

A reader sent in this link to an article in the New York Times about condo buyers trying to get out of presale contracts now that the florida market has tanked. Its an interesting example of how quickly sentiment can change from boom to bust: between March 2005 and 2006 speculators drove prices up 25% in West Palm Beach, but now demand has dropped off and many of the condo construction project started during the boom are starting to complete putting more inventory on the market and driving prices down.

As dozens of condominium towers conceived during Florida’s real estate boom near completion, investors who snatched up units in the preconstruction phase in hopes of turning a quick profit are increasingly trying to break contracts, even walking away from fat deposits.

“Motivated” sellers are flooding online forums like Craigslist with advertisements for condo units still months or years from being finished. And lawyers have been inundated with calls from people hoping to avoid closing on units they bought during the speculative craze of 2004 and 2005.

“I get two or three of these calls a day,” said James Ryan, a lawyer in Boca Raton who said he had 40 clients looking to get out of condo contracts. One, Mr. Ryan said, abandoned a $340,000 deposit rather than close on a $1.6 million unit that lost its appeal as the market faltered.

The numbers suggest that it will only get worse. In Miami-Dade County alone, 8,000 new condo units will be completed this year and nearly 12,000 more in 2008.

The median condo price in Boca Raton dropped about $13,000 in the year leading up to March ‘07. Could it happen here? Only time will tell, but here are a couple of graphs you may be interested in. The first is from the UBC Sauder school of business and shows Vancouver population growth over the last 19 years:

The second graph is from the City of Vancouver and shows Condo completions in the Downtown core for the same period, with future supply forecast for projects in the pipeline:

Here’s your open topic post for friday May 25th.

- Northern BC town suprised by mill closure.
- US new home prices drop 11% in one month.
- Steeper drops predicted.

Whats happening around Vancouver? What are you seeing out there? Post your links, news & anectdotes here!

A North Vancouver condo owner is suing her neighbor over second-hand smoke from the neighbors patio claiming that the smoke is “a nuisance causing her stress, irritability and disrupting her sleep”. Now this sounds like a polarizing issue -Where do you draw the line between a persons right to smoke on their property and the rights of another to not have smoke pouring into their windows?

As living gets more dense in the city we live in closer proximity with our neighbors and a lot of personality variables enter the mix. Thankfully most conflicts can be worked out between neighbors and don’t end up in Court or degenerate into a Hatfield and McCoy situation, but now that this one has I wonder if the stress of being sued is driving the neighbor to smoke even more?

Former federal reserve chairman Alan Greenspan can’t stop saying ‘boo’ to the boom. Today he warned of the potential for a big drop in the Chinese stock market and fallout for the global economy.

Addressing a meeting in Madrid via teleconference, Greenspan said the recent boom in Chinese stocks could not last.

“It is clearly unsustainable,” he said “There’s going to be a dramatic contraction at some point.”
…

“In the last five years, the world as a whole is a growing faster than at any time in the world’s history,” he said. “It can’t last and it won’t last because it’s a one-shot adjustment.”

Greenspan said asset prices around the world could fall but that the economy may escape unscathed if it were flexible enough to absorb asset price shocks.

“We will get major declines in certain levels but it need not feed back significantly to levels of employment or the real economy,” he said.

Earlier this month, Greenspan reiterated that he believed there was a one-third chance the U.S. economy, the world’s largest, would slip into recession this year.

Jeez, maybe they should call the guy ‘gloomspan’ his announcement today gave some investors jitters and knocked the North American market back a bit. Just to be safe I’m going to buy some local real estate because I hear prices can never go down there.

From the gosh-what-a-suprise department: the Sun has an article about Northern BC having the most affordable real estate.

The survey found that despite average house price increases of 30 per cent across northern B.C. in 2006, owning a home in the region consumes less than half the household income of a homeowner in Vancouver.

According to the BCNREB report, which was commissioned after RBC Financial Group released the results of a cross-Canada housing affordability study showing that B.C. was the least affordable place to buy a house, the Housing Affordability Index (HAI) for northern B.C. was 28.9 per cent compared to 68.5 per cent for Vancouver and 62.5 per cent for B.C. as a whole.

I wonder if anyone in Vancouver actually does spend 68.5 percent of their pre-tax income on housing.. Is that even physically possible?

Here’s your friday free-for-all post for may 18th.

-protecting rental stock
-government gets cranky about CB developments
-bubbles easier to spot once they’ve popped
-Rennie: green is the color of money

What are you seeing out there?

Post your news, links & anectdotes here!

The Canada Mortgage and Housing Corporation (CMHC) is facing a class-action lawsuit from leaky condo owners in the lower mainland and has a message for the people who suffered from this billion dollar debacle: F##k Off, its not our problem.

The lawyer for the CMHC argued on monday that his client shouldn’t be on the hook for the leaky condo crisis since it owes no “statutory duty of care” to homeowners.

Lawyer Ross Clark argued in B.C. Supreme Court Monday that the housing department is under no statutory obligation to Canadians in the wake of the billion-dollar housing construction disaster that first surfaced in the early 1990s.

Many families were left in financial ruin, forced either into bankruptcy or saddled with repair bills ranging from $25,000 to more than $250,000 per household.

Clark urged Supreme Court Justice L. Smith to dismiss the latest effort to certify a class-action lawsuit against the housing agency. The same court denied an effort for certification in 2002.

Why yes, now that you mention it, this is the same CMHC that claims on its website to be “committed to helping Canadians” by improving “building standards and housing construction” and providing “policymakers with the information and analysis they need to sustain a vibrant housing market in Canada.” It just so happens that this is also the same CMHC that was made aware of concerns about housing construction practices in coastal Canadian climates in the early eighties.

The CMHC isn’t to blame, Clark said, for the water-logged walls and mould-infested interiors of condominiums and townhomes built during the 1980s and 1990s. That responsibility rests with those behind the “poor design and construction.”

Peter Simpson, of the Greater Vancouver Home Builders Association, said he was puzzled by the CMHC’s arguments in court. “I think it was an unfortunate comment to place the blame squarely at the feet of two members of the whole building community.”

Simpson said the leaky condo crisis was a “systemic problem and so there’s no shortage of blame to go around.”

Have you got your inoculation? Article in todays Vancouver Sun: Condo fever predicted to spread.

The Lower Mainland’s seeming addiction to condominium living will continue to spread to other desirable regions of the province, Canada Mortgage and Housing Corp. reports in its latest British Columbia forecasts.

We just can’t get enough of ‘em! Its the lifestyle!

However, on cost, Frketich added that keeping housing “at a price that people will buy is the main motivator behind that move to multi-unit starts.”

“There is no sense in building housing that people can’t buy, and this is a response on the builders’ side to bring forward product that people can buy.”

In Kamloops, for instance, the average home price will climb 17.2 per cent to $305,587 in 2007 compared with 2006.

And what about mortgage rates? They’ve got a prediction for everything!

Frketich said she expects mortgage rates to edge up in 2008. Rates will remain historically low, but she expects they will put a dent in housing resales, which will spill over into less demand for new homes.

She added that for the past few years, B.C. has been building new housing faster than its population growth warrants. And as employment growth slows, Frketich expects new housing construction to remain at a still relatively high 30,000 units per year over the next five years.

Thank goodness housing prices can’t actually go down or we might really have a problem with the combination of high prices, all that supply and slow population growth.

So what are the symptoms of condo fever? I feel a bit dizzy, but maybe its just the spin.