Vancouver Condo Info

The receivers report for the Eden Sophia condo development has just been released. Pre-sales buyers now know how much extra they’re likely going to have to pay for their units. Article from the CBC:

According to the report by the receiver, The Bowra Group, which was filed in the B.C. Supreme Court on March 11, it will cost $9.2 million to complete construction, if and when work on the building resumes.

In order to fund the construction process, it is suggested in the report that the pre-sale price paid by condominium purchasers, from January 2005 to November 2006, be increased to 90 per cent of the current market value of the building units.

Due to soaring real estate prices, the buyers will have to come up with an average of $84,600 more than they originally paid to keep their homes, the report recommends.

The full receivers report in PDF format can be found here.

On a side note, prices may be going up at the Sophia, but ‘Interested Observer’ writes in to say that prices are going down at ‘the Duke’. The following is an excerpt from the email pitch for that project:

I wanted you to be among the first to know that Duke on Dunbar’s prestigious suite #307 has now been reduced to $999,900! This 1,034 square foot two bedroom, two bathroom home includes lavish finishes and features and breathtaking city, ocean and mountain views and a beautiful, private 468 square foot balcony complete with an indoor/outdoor fireplace to ensure enjoyment year round.

This information will hit MLS late this week so I wanted you to have an opportunity to take advantage of this offer first. If you would like to book an appointment or have any questions, please do not hesitate to call.

Prices up, prices down, who can keep track!

MP Garth Turner has a new book out called “Greater Fool – the troubled future of real estate“.   He argues that the Canadian real estate market is due for a collapse similar to the one currently happening in the US.

He recently started a blog at greaterfool.ca that looks like yet another source of negative news about real estate markets in North America.

The following is an excerpt from his book blurb:

The timing couldn’t be better for Garth Turner’s newest book on real estate and its impact on personal finances. At a time when the US is clearly heading for recession, stock markets roil, a global credit crunch overwhelms banks and a climate crisis lurks, can the Canadian real estate market withstand the threat? Do we really think we’re immune?

More than 400,000 US families lost their homes last year and more than a million more are threatened. House prices have collapsed as much as 30% in some markets, amid predictions of another 25% slide. New home sales are down over 40%. There are 20,000 new, empty houses for sale in Phoenix, streets of foreclosures in California and desperation in Florida. What happened? Will it hit here?

Hunting for rental housing in any city can be exhausting, in Vancouver it can be downright depressing. Going to view small dingy 1 bedroom apartments ‘accidentally’ listed as 2 bedrooms and described as ‘huge’ and ‘bright’ is a frustrating waste of time, but it would be even worse to lose deposit money to a scam listing of an apartment that doesn’t even exist.

Craigslist has brought a convenience to rental shopping that cuts both ways – It’s easier for you to look through listings in your bathrobe, but its also easier (and free!) for con-men and scammers to grab nice pictures off the web and list fake rentals that are too good to be true.

The Vancouver Police say at least 15 people in the last month have been conned out of deposit money in face to face meetings with fake landlords, but there’s no reason a scammer even needs to be in Vancouver if you’re not paying close attention. A common scam is to list an apartment that’s too good to be true, but the purported ‘owner’ happens to be out of the country, maybe just starting a new business in Athens Greece or on a missionary trip to Asia.

They will describe the apartment in glowing terms and offer to use a service like TNT, FedEx, UPS or DHL to insure that you get the key – they’ll send you a link to a legitimate shipping website first to get your confidence and then send you a fake ‘secure’ link to make it easy for you to send them your money. Dissapointingly the key never shows up and you won’t hear from the ‘landlord’ again once your deposit is gone.

It’s not too difficult to avoid this sort of scam, just view listings with a sceptical eye and deal with local people, only giving a deposit after you’ve viewed the suite and gotten enough information out of the owner to make you comfortable. If you do make email contact with a seller on craigslist that isn’t local, take a close look at any responses you receive – The following is an example of a fake header message in an email:

** CRAIGSLIST ADVISORY — AVOID SCAMS
** Beware: cashier checks, money orders, escrow
** Transaction: For a secure transaction we recommend TNT, Fed Ex, DHL or UPS, services because can verify the information of the seller and buyer.
** craigslist recommend Deeann38officcee as a trusted seller.

A common ‘phishing’ technique is shown here – make your rip-off seem legitimate by warning against ‘scams’. That alone isn’t enough to call this email a fake, but there are a couple of other indicators here that say ‘scam’. Craigslist never recommends any advertiser as a ‘trusted seller’, and they don’t recommend any shipper. A simple check of the Craigslist site confirms these points.

It looks like the lower mainland has at least one rental scam-hunter and you may find more useful information on their website. Unfortunately it all comes down to one basic point to keep in mind: if it looks ‘too good to be true’ it probably is.

Yet another BC condominium project has entered recievership, but this one isn’t in the lower mainland. The Willows in Lake Country, Okanagan has left about 78 pre-sales buyers waiting to find out what’s going to happen with this condo project thats currently near 75% complete. The developer in this case is Victoria based Divergent Environments and the receiver is BDO Dunwoody.

This year hasn’t started off with the greatest track record when it comes to pre-sales. Problems at the Willows makes at least five BC housing projects that have failed in the last few months. The Eden group canceled two projects in November and then saw the Sophia go into receivership last month. February also saw two Chandler Development projects, H+H Yaletown and Garden City in Richmond go into receivership and on Friday we got news that construction has been halted on the Abbotsford condo tower Brio.

Paulb posted a link to this surprisingly negative article in The Toronto Star this weekend – I say surprising because we’re used to seeing a much rosier outlook in the mainstream media. That kicked off a discussion on media bias that I think is worth continuing. As suggested by ‘burden of proof’ I’m going to post this as a few poll questions. Feel free to elaborate on your opinions in the comment section.

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Extra: Conjuration_imbeciles sent in this link to another article in the Toronto Star. One of the authors that predicted the US housing crash warns Canadians thinking about buying a property in the US that it’s still too early to buy. He predicts that there are more losses to come, particularly in markets favoured by Canadians (ie. Arizona & Florida).

Early Edition! Its Friday and that means its time for our weekend super-post round up. Here’s a few stories I’ve noticed this week:

-CBC Video: Abbotsford condo tower Brio put on hold
-BC Real Estate Association says rate cut good for buyers
-Cut in bank rates has no effect on fixed rate mortgages
-Average house price approaching $1 Million
-Use the right words to get it sold
-One months rent: $100,000 please.
-Shelter costs in Vancouver eat up income
-Gordon Campbell: Smaller lots cut housing costs
-Vancouver can’t afford affordable housing
-Enjoy the good times while they’re here
-US mortgage delinquencies and foreclosures hit new high
-Not licensed to print money

What are you seeing out there? Post your news, links and anecdotes here!

February saw a large number of listings and prices edge up yet again in Vancouver. Overall listings are up 26.2% compared to last February and sales are down 6.4%. The REBGV benchmark price for a single family home in Vancouver is now up to $761,342. The Townhouse benchmark price is $472.147 while the Condo benchmark is $387,032.

Get all the stats broken down by sub-area at Paul Boenisch’s site.

This certainly is an interesting market and one thing so far is true – it really is different here. A year ago other western markets were chugging along with Vancouver, but some of our neighbors are seeing some changes. Calgary, Victoria and Seattle markets have shown some weakness lately and even closer in its possible that the western blessing is fading. North Vancouver has seen a 2.38% price drop in the SFH benchmark and the Fraser Valley is looking less robust these days as well. Keep an eye on Mohicans blog for Fraser Valley analysis (not up at time of this posting)

There has been some news lately of fewer Canadians and fewer BC residents planning to buy in the next few years. Will this along with rising listings translate into downward pressure on prices as it has in other countries?

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After hosting the 2000 summer Olympics, Sydney Australia has seen some astounding losses on real estate speculation. The outer suburbs are seeing median price drops between $100 to $450 per week since early 2004. In Sydney property prices peaked three years after they hosted the games, will Vancouver’s market hold on that long?

One of the obvious differences between Vancouver and Sydney (asides from the summer / winter games hosting) is that their games took place at the beginning of a global credit boom, whereas ours seem to be happening at a time of contracting credit. This will likely have an effect on when our local market peaks.

The MVS Valuers analysis shows that anyone who has bought as long ago as January 2002 and resold recently in Sydney’s west and south west is likely to have copped a loss.

Prime Minister Kevin Rudd is today expected to unveil a plan to help families battling housing stress in a move designed to take the heat out of the latest Reserve Bank rate hike. Last month, on the day before the central bank increased rates to an 11-year high of 7 per cent, Mr Rudd announced the government’s $850 million first-home saver accounts scheme.

Mr Rudd’s announcement comes after new research shows 1.1 million low to middle income households are now spending more than 30 per cent of their income on housing. To present an accurate picture, anomalies such as upgraded homes, sales within families and vacant blocks that have been built on were removed from the analysis.

Among some of the worst losses studied, a home in New Cambridge St, Fairfield West bought for $780,000 in November 2004 sold in July last year for $415,000, a loss of 46.8 per cent.

At Bond Place, Oxley Park, a unit bought for $455,000 in August 2005 sold last May for $250,000.

At McAndrew Close, Lurnea, a house bought for $420,000 in December, 2004 sold last June for $267,000.

On average houses actually bought over the past five years and then resold have resulted in losses of $20,912 in Sydney’s west and $20,435 in the south west for their owners. MVS Valuers director Peter Raptis said there was little likelihood of a recovery in prices in the short term. He predicted more possible losses ahead, or at best nominal growth.

The full article can be found on news.com.au

There are some areas of eastern Sydney that are still booming, so this slump has not hit their entire market equally. There are some interesting comments on that article as well.

Thanks to Visio for the link.

update: a more positive interpretation from 2006 can be found here
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The CBC is looking for personal stories related to Vancouver’s softening real estate market:

What are you hearing about Vancouver’s softening real estate market? Do you know anyone facing foreclosure? Have you heard of any developments going into receivership?

Home resales are down while the number of new listing of homes for sale in Canada is headed up. This comes as CBC News learned that several Vancouver area building projects have come to a halt because of financial difficulties.

While its true that sales are down and listings are up, its not the first time thats happened here. It will take many more months to see if this is the start of our own local real estate crash or just a pothole in the road to infinite price increases. Whether we see an decline in the short term or not, a lack of affordability is clearly taking its toll in other areas : the Vancouver Police Department is reporting that the high cost of living is driving experienced police officers out of Vancouver.

Thanks to Michael and Jadeeast for the links.

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