United Properties Anvil in trouble
Another lower mainland condo project in trouble, this one in New West. Story at the CBC:
United Properties, the developer behind The Anvil in New Westminster, has run out money, and that means pre-sale buyers are being asked to pay an additional $20,00 to $40,00 if they want to keep their condos.
Pre-sale buyers have received letters from the developer saying they have 14 days to decide whether they want to pull out and get their deposit back or pay the additional costs. The project needs an additional $4 million to meet its financial obligations.
“Development is a tough game and United Properties has been at it for some time, so it is quite unique to have such a developer run into this kind of difficulty,” said real estate lawyer Ron Usher.
Apparently the Anvil is currently 18 months behind schedule. Insert appropriate Wile E. Coyote comment here.
Thanks to Macchiato and Exx for the story link.
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May 26th, 2008 at 2:26 pm
Scullboy, the point about staying at the Westing (or fairmont) etc. is very clever.
Furthermore it’s possible to buy a strata unit in a hotel such as the Terminal city club (near coal harbour) or the Marriot Pinnacle (in coal harbour) and then you get a return on the hotel and can stay there for 30 days per year.
If the rich foreigners stay longer than 30 days they could buy 4 of them for $800k (or the price of a new 1+den in the same area) and get 120 days a year plus a small % return on the purchase price while it’s in the rental pool.
May 24th, 2008 at 5:18 pm
Actually, I *HATED* my old place, and the neighbors were getting worse and worse. As BDK pointed out, I’ll stay in the new place as long as I like, though hopefully that’ll be a while. THe building is professionally managed and it’s all rental units, so the landlord will never evict people because he is selling the place.
At this point you have to ask….. how long will it take to build equity in a place if you’re paying down a 40 year mortgage? We can all do the math, so really the question is rhetorical. The real questions are:
1) How fast am I paying down equity
2) How much of my income is going into housing if I own as opposed to renting
3) do the advantages of buying and owning at this time (pride of ownership, paying off equity etc) outweigh the advantages of renting (flexibility in a changing economy, much lower housing costs)
Even if you have to pay increased rent in the future, you’re going to have to pay increased costs of ownership in the form of higher interest payments . Even if the interest rate drops, at this point you’d pretty much have to take out a 40 year loan which means you’re paying way more in interest. And then there are property taxes and strata fees. In comparison, 4% / year rental increases start looking good.
Who says you ever have to own? If the price is double in 15 years… well then renting looks to be an even better value because relative to owning your cost of houseing will be super dirt cheap.
It no longer makes any sense at all to own here. Even a wealthy foreigner would be smarter to stay at the Westin is he were so hell bent on living here. And if you’re talking wealthy foreigners purchasing a pied a tierre, well why on earth would they buy in Vancouver instead of, say California or Nova Scotia for that matter?
Wealthy people don’t get or stay wealthy by making bad financial decisions.
No, I love Van, especially on days like today. YOu do have to look around carefully to find a god rental, but they’re out there and when you get one, you can enjoy the things Van has to offer without paying through the teeth for some badly built condo.
Hell…. I may *never* buy here. I may just buy a little place in NS or NFLD. By the time global warming kicks in, they’ll be rainforest anyway.
May 23rd, 2008 at 12:45 pm
bdk; “If you were able to lease your car for 1/3 of the price of owning it would you still buy the car?”
Your comparison of condo’s to cars is spot on. For some reason people believe condo’s are more real estate when in truth that they are a rapidly depreciating consumer item such as a CAR. Very little of the value of a condo is in the land, most of it is typical of a car, nice finishes and a mechanical system and body that has a limited lifespan and will eventually depreciate to zero (the non-realestate portion 95% likely). Unlike a SFH where probably the land value will appreciate as a majority portion of the value.
I very much doubt there is any presently built modern condo that will make it to the 40 year limit of new mortgages without a total rebuild…just like a car!
May 23rd, 2008 at 10:55 am
Krissh, that’s one of the great things a about renting, you can move to a new building every year and still pay 1/3 the cost of what it’d cost to mortgage it.
You mentioned appreciation but fail to realize that real estate is not the only asset with the potential to appreciate, if one were to save the $2,000 difference between a mortgage and a lease and have invested it in any of the other asset classes which increased in value since Real estate started appreciating again (2004)then you’d have done quite well.
When you say the price doubles you’re not including the opportunity costs of investing the $2k per month into oil stock or gold or pretty much any sector, since it’s not just real estate that went up!
If you had leveraged $500,000 on precious metals or gold it would also be worth a lot more, just like real estate. Is this getting into your head?
Owning a condo, that will go down in value, is not the most important thing in the world.
If you were able to lease your car for 1/3 of the price of owning it would you still buy the car?
May 23rd, 2008 at 7:09 am
Sonika,
you used to like your old place as well now you liked the new place,I don’t know why you moved from the old place was it sold,asking for rent increase after contract or what?
Now you like the new place but how long are you going to stay there?haaaaa ok -if you are looking for some solid answer-I don’t think you have any question in your comment but i believe you have put a one sided forceful opinion that you are renting a good place for 1300 you feel good that way,I have no objection, if you are renting a beautiful place for cheap just enjoy your place,the only spin i can put on this is you are renting it, you does not own this same place.
You can not gain the appreciation out of it,you may not be able to lower down your monthly payment towards zero but you may have to pay increased rents in future or not depend on you owner. short on time the last point may be you have to pay double the price with in 15 year to buy this same place where owner might be closing his cost and you are still paying increased rent.
May 22nd, 2008 at 11:12 pm
Thumbs:
Just for once I was being serious…. I figured I really had deciphered your opinion on real estate.
If I haven’t can you please explain it to us? I’m totally serious here. I mean you’ve been babbling on for… what…. years now? Surely you’ve got some kind of opinion that can make sense. I mean, you’re saying buy in today, right? So, why should be buy in today? I’m sure everyone else is just as interested as I am.
C’mon…. explain it to me. I’m paying $1300 today for a 700Sq Ft place in the West End. The building is clean, quiet and remarkably well constructed. It’s very well run, and very well kept. It has a gorgeous view of the mountains AND the ocean. It’s close ot the beach and close to the park. Friends of mine, some of whom own several properties in Van, were really impressed with how nice and homey it was.
So… come on, now. Explain to me why I should be leaving this lovely little home for something else. I’d probably be paying triple for something comparable in order to own it. Surely you have a well though out line of argument to convince some one like me.
I eagerly and sincerely await your reply.
May 22nd, 2008 at 11:04 pm
Hey Pope,
You have to admit, I think my posts have served some kind of purpose. I think Krrish / thumbs have gone insane. You have to admit it looks like his personalities have completely split tin two, and they’re both short circuited.
I feel just like Captain Kirk. Remember how he was always able to fry the brains of computers/space probes with logical constructs delivered in a completely over the top manner?
Unless someone’s impersonating krrish in which case I say : GOOD SHOW! You’ve mastered his dreadful posting style. Well done.
NOw if you can just get his mom to stop texting me…..
May 22nd, 2008 at 10:38 pm
Micheal – Thanx for the vids – I laughed my ass off!
May 22nd, 2008 at 9:00 pm
Rob might be changing his tune again, apparently the market has started to heat up again trending toward white hot, and has posted the stats to prove it.
Therefore the 20% to 40% might be revised.
May 22nd, 2008 at 8:59 pm
-A- : indeed i would agree there is little or no stimulus left in the bag, and what there is may be pushing on a string so to speak. the real vacancy rate may be a bit higher, not so certain on that.
May 22nd, 2008 at 8:52 pm
Goin’ Down to China Town
http://www.youtube.com/watch?v=4x_WQBi2wJg
May 22nd, 2008 at 8:50 pm
Stagnate:
“real interest rate spread at 1981 boom top=17%
real interest rate spread now=2%”
Not much room for monetary stimulus this time around,where are you going to get the 1500 bsp to stimulate?
rental vacancy rate at 1981 boom top=6%
rental vacancy rate now=2%”
The real vacancy rate is much higher, most of you homedebtors have 2 or 3 suites to rent out.
May 22nd, 2008 at 8:45 pm
blueskies: you’re one of the smarter posters here, leave the dumb comments to the fourth liners on your team.