Old news to some, but The Sophia on east 11th and Sophia street in Mount Pleasant has gone into recievership. The Bowra group (the reciever) has 21 days to submit a plan to the courts. The thing that makes this really surprising is that the Sophia is 85% complete. When the Eden group canceled two other Vancouver developments in November of 2007 Bill Eden assured reporters that the Sophia would be completed.
The problems with completing all of these developments is reportedly related to cost over-runs and difficulty finding construction crews, but with condos selling for record high prices in Vancouver how is this going to play out in the long run? Limited availability of crews sounds to me like a temporary bottle-neck based on a large number of projects currently under construction, has the cost of labour really risen that much in the last few years?
The Sophia will very likely be finished given that it’s 85% complete, but this news probably makes those pre-sales contracts worthless. This issue is brought up in this CTV article:
NDP housing critic Diane Thorne said unless our laws change, presales could be the next leaky condo crisis.
“I think it should be a guaranteed price,” she said. “Prices will go up in the beginning, but I think there’s more security for homeowners. They won’t buy something they’ll lose or not be able to afford.”
Bob Rennie, who makes his living marketing presales, says reputable developers welcome new laws.
“Anything the government wants to put in place to protect the consumer doesn’t worry those top 15, 20 developers,” he said. “If you’re getting creative with your financing, or your profit margin is too low, that developer may worry. But then again we’re protecting the consumer so let’s do it.”
Thorne is drafting a private member’s bill about pre-sale law and she hopes the government will take it seriously.