Eden Group Sophia goes into recievership
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.
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February 25th, 2008 at 4:42 pm
Also, kudos to CTV for including that deliciously sarcastic reference to “sophisticated uptown living” in the news story. That’s my kind of comedy.
February 25th, 2008 at 4:45 pm
February 25th, 2008 at 4:52 pm
Before I can be impressed I would have to be assured that none of the “good” developers did not build leaky condos under a numbered company, and escaped liability on a technicality.
February 25th, 2008 at 4:56 pm
Agreed, thats why I included the whole quote.
Is construction now our primary industry? BC used to rely quite a bit on forestry, tourism and the film industry didn’t it? All those sectors are down, and as far as I know we aren’t drawing head-office jobs here.
February 25th, 2008 at 4:57 pm
February 25th, 2008 at 5:22 pm
Sometimes in business things don’t go according to plans; it’s called risk, and risk has its rewards.
So far a couple of pre-sales have not worked out, that’s not enough to change or add laws.
You don’t want to reduce competition in the development business and end up with a near monopoly, it’s already highly concentrated.
Buyer be ware, and if greed makes them stupid, too bad.
The contracts should be read.
February 25th, 2008 at 5:41 pm
February 25th, 2008 at 5:48 pm
Rennie’s answer was blatantly self-serving and cannot really be argued against. Why would he say anything else?
It seems to me all legislation will do is push up the cost of building and be a barrier to new developers entering the market. Development inherently has risk and I think people forget that. Also I think there are some misconceptions around the implications and the process of receivership.
I thought deposits are held in escrow so the capital should be returned (am I wrong on this?). So what people are really complaining about is their “call option” in real estate got returned at face value and now they’re “priced out” forever. And politicians are all over this, ignoring those that are already “priced out”?
The current building environment will likely lead to some sweet-ass deals in a few years so don’t cry too hard!
February 25th, 2008 at 5:51 pm
“they dumb”
A BA doesn’t really prove much anymore.
February 25th, 2008 at 6:01 pm
February 25th, 2008 at 6:07 pm
February 25th, 2008 at 7:04 pm
…and without the 25%+ discount compared to current market value.
February 25th, 2008 at 7:33 pm
Perhaps another option is to close a few hospital beds, or perhaps increase tuition fees, and the savings could be sent to the pre construction buyers in a form of a grant, naturally I for one would insist that the grant be large enough to compensate for the equivalent of increased equity they would now have.
February 25th, 2008 at 7:58 pm
the law of unintended consequences is about to be invoked……
too funny -A-!
February 25th, 2008 at 8:12 pm
1. He had to say that, what else is he gonna say when it is those naieve pre-sale buyers who have made him so darn rich all these years… he has to be seen to be concerned about their interests or the end of the pre-sale is nigh (well, it probably is anyway…) and;
2. He knows there is not a snowball’s chance in hell of it happening so no risk in saying it and having it come back to bit him in the arse.
A thought on -A-:
I appreciate the way you think man. Nice to see you aren’t banned here although you don’t cause Pope any of the trouble you cause Chipman
February 25th, 2008 at 8:14 pm
February 25th, 2008 at 8:25 pm
February 25th, 2008 at 8:59 pm
i posted this over “there”:
41 of those 78 pre-sales were listed for re-sale last year.
Flipper Bloodbath II
The East End Chronicles
my sympathy is quite extensive
February 25th, 2008 at 9:03 pm
see….. it’s all contained:
http://tinyurl.com/ywneyw
Real estate developers in Vancouver say it’s still safe to enter the condo pre-sale market.
February 25th, 2008 at 9:07 pm
I think they bought every piece of bullsh*t hype fed to them without questions and assumed they had found a way to make a fortune. They really believed it’s different here, and don’t understand that to make money you have to take a risk. EVERYTHING involving money involves risk as well… even municipal bonds, as we’re just discovering. That even means gold, all you gold bugs.
I won’t even buy a $600 appliance without researching it carefully to ensure I understand what can go wrong with the thing. Sometimes it doesn’t work out, and the appliance breaks (my DVD player broke a couple of days ago), but at least by doing the research I lower the risk.
Most home buyers in BC make Krrrrsh look like a fucking rocket scientist. They really believe they’re making tons of money just living in their home. They believe there will be no price change, which means the value of their home will increase even as the asset deteriorates.
So… you know… whatever. I don’t feel terribly sorry for anyone who gets a haircut this time around. You’ HAVE to know stories about buildings going into receivership are making people nervous because it *certainly* doesn’t feed into the “risk free investment” meme.
February 25th, 2008 at 9:14 pm
http://tinyurl.com/2flhwg
More wonderful Vancouver real estate carnage bliss. If you’re one of the knobs who bought into the crappy cardboard condo on Sophia and 11th, this is what you get for trying to move that far East. Stay in your Kits.
February 25th, 2008 at 9:15 pm
bwahahahahahaha!
quote o’ the day!
February 25th, 2008 at 9:29 pm
February 25th, 2008 at 9:44 pm
February 25th, 2008 at 9:54 pm
February 25th, 2008 at 10:51 pm
It would also serve to push out the small developers and contribute to the concentration of wealth among larger developers.
They should be out there decrying the excesses of economic bubbles…instead they seem to be aiding and abetting them.
February 25th, 2008 at 11:57 pm
So it is actually 140,000.00 off its original asking price.
Sorry for the error and intrusion. I don’t suppose the market is falling apart just as all projects are over budget now? Bob? Bob Rennie? How about YOU help these people who are being scammed? You have deep pockets, no? After all Vancouver is the best place on earth and you helped make it so, didn’t you? We just know you are going to help remedy this little glitch lol
February 26th, 2008 at 1:44 am
February 26th, 2008 at 5:13 am
February 26th, 2008 at 5:14 am
February 26th, 2008 at 7:26 am
took a look at pauls’ numbers!
23% sell/list SFH
27% ” ” condo
gimme a B
gimme a E
gimme a A
gimme a R!
Ampa /newsflash/satv back to you
February 26th, 2008 at 7:30 am
http://tinyurl.com/24yexz
Reports on three fronts Tuesday showed a deteriorating climate as consumer confidence plunged, inflation at the wholesale level soared and home prices slumped at a record pace.
who knew?
February 26th, 2008 at 7:48 am
“Sharper Downturn is more likely as U.S. growth slows”
read as: perhaps we’re not quite as “decoupled” as previously reported
February 26th, 2008 at 8:17 am
U.S. Housing slump deepens
“..The composite index of 10 metropolitan areas fell 2.3 per cent in December versus November and tumbled 9.8 per cent year-over-year, which set a new record.”
http://www.theglobeandmail.com/servlet/ … y/Business
February 26th, 2008 at 8:27 am
February 26th, 2008 at 8:30 am
February 26th, 2008 at 8:30 am
February 26th, 2008 at 8:46 am
Debt-bet,Drachen
No That’s not true you don’t know the price difference right?ask drachen for help,How would you start making your own home same procedure as developer does,financing,deposit and buying matterial, cost at the time you need the stuff and most of time cost can over run you anytime and all other risks are involved,but buyers are the one to enjoy appreciation/wear downturn.
February 26th, 2008 at 8:48 am
27% ” ” condo
gimme a B
gimme a E
gimme a A
gimme a R!
Prices? 10 bears for you back to you Blueskies
February 26th, 2008 at 8:51 am
chipman site is down?
“the connection has timed out”
February 26th, 2008 at 8:53 am
What went wrong there is a nature of bussiness, put your self in developers shoes and this is a same developer we have had disscussion last year when you have learned about demand,supply,and construction cost,Tony Danza was there as witness.
Now, The Bowra group (the reciever) has 21 days to submit a plan to the courts
The plan will make this case same as riverband project, either buyers will have to pay more or they will get their refund looks weird but there is no other solution because of nature of bussiness.Acts are written very clear and the buyers are well aware of them.if the receivers are going to loose their shirt they can atleast accept the same buyers with same amount
What we need to look forward is always look for reputable developers those are very aggressive, there will be more projects in the downtown, sale for those would take place in 2008 because they know they can handel them for sure they are carring name,numbers with them and they have completed lots of projects successfully.
Blueskies atleast you had a good lough sounds good and finally…..
Hi Sonika-Bye Sophia
February 26th, 2008 at 8:55 am
speaking of darwinism:
Comment by krrish1
February 26th, 2008 at 8:57 am
the pitter patter of hurried feet heading for the exit……
February 26th, 2008 at 8:59 am
February 26th, 2008 at 9:04 am
February 26th, 2008 at 9:07 am
I can see clearly now, the crane is gone,
I can see all obstacles in my way
Gone are the dark clouds that had me blind
It’s gonna be a bright (bright), bright (bright)
Sun-Shiny day.
I think I can make it now, the crane is gone
All of the bad feelings have disappeared
Here is the rainbow I’ve been prayin’ for
It’s gonna be a bright (bright), bright (bright)
Sun-Shiny day.
Look all around, there’s nothin’ but blueskies
Look straight ahead, nothin’ but blueskies
I can see clearly now, the crane is gone,
I can see all obstacles in my way
Gone are the dark clouds that had me blind
It’s gonna be a bright (bright), bright (bright)
Sun-Shiny day.
krisssh1 i sincerely hope this song plays in your head for the rest of the day…. an endless loop of sappy lyrics…. not unlike your postings
February 26th, 2008 at 9:14 am
February 26th, 2008 at 10:22 am
interesting times ahead of us. I will share with you what i’ve observed lately In the Metrotown Mall: since i live closed by, i could see in the last 2 months that the amount of people is decreasing constantly: i don’t get hit at 7PM when i’m buying the groceries at Superstore and the stores looks pretty empty in terms of consumers. Maybe is just me.
February 26th, 2008 at 10:32 am
Don’t be dissing songs with sappy lyrics, that particular song has kept me going on many a depressing, rainy, Krrrish infested day.
I think most of the people on this blog have been waiting *quite* a while for the market to turn. Let’s face it the wait has been long, and the attitude of many of the homoaners in Van has been damn near unbearable.
I’ve been told I’m stupid. I’ve been told I hate Vancovuer (not true). I’ve been told I don’t understand real estate. I’ve been told I don’t understand Vancouver real estate.
It’s been a long hard difficult slog. Sometimes the only thing that has put a smile on my face is that particular stupid, sappy song.
February 26th, 2008 at 10:33 am