Incentives to lure condo buyers
Surreyjoe posted a link to this article in the Vancouver Sun about incentives designed to lure condo buyers. The article covers a number of projects in the lower mainland that are using a variety of incentives to try to get units sold:
Bosa said the summer was also a slow period for sales, and “we figured we would do a bit of an advertising blitz” to spark more interest, which has worked to drive more traffic to its sales centre.
Developer Ledingham McAllister is offering different incentives on a couple of its projects — a $10,000 decorating allowance on units in its Silhouette project and five-per-cent cash back on September sales in its Perspectives building near Lougheed Town Centre.
Ledingham McAllister president Ward McAllister said incentives are offered during slow sales to encourage buyers “to get off the fence” so the company can meet its sales targets, but he hasn’t seen more than minimal discounting.
“I don’t think there’s much discounting going on in the market at all,” McAllister said. “People are thinking that prices are going to come down, and we don’t believe they are.”
It may or may not be true that theres ‘not much discounting going on’, but there certainly are a lot less sales happening. Perhaps I’m missing something here, but aren’t incentives just an attempt at hiding price drops? If you throw in a “$10,000 decorating allowance” or a “free honda fit” isn’t that just a price drop of that amount?
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September 24th, 2008 at 8:12 am
September 24th, 2008 at 8:32 am
September 24th, 2008 at 8:47 am
Canada could face housing woes, Merrill warns:
http://www.globeinvestor.com/s.....4/GIStory/
“TORONTO — Canada could be headed for a housing mortgage meltdown similar to that being felt in the United States as statistics show many households in Canada are running far larger financial deficits than in the United States or Britain, says Merrill Lynch Canada.” More to come…
September 24th, 2008 at 8:49 am
A more balanced article would have involved interviewing someone without a vested interest in trying to sell condo’s. Maybe even mention the slow MLS sales in September, the fact that there almost 11,000 condo’s on MLS in Greater Vancouver as well as thousands more still under construction.
September 24th, 2008 at 8:51 am
I love it because he states that they don’t see prices going down. Oh yeah? Then why does he feel developers will cut-back on new developments?
It’s classic human nature to discuss the very issue that scares you. McAlister knows that there is going to be a massive over-supply as the completions pile-up over the next year or so. In fact, all of BC’s developers see the runaway freight train - which they created - is barreling down the tracks and pointed right at themselves.
It’s fun to see them nervously claiming to not be scared.
September 24th, 2008 at 8:53 am
http://tinyurl.com/4rrmje
This article ran on the front page of yesterday’s Sun. (Sept 23). I can’t find it on their website, no matter how much I look. Very odd indeed. Had the headline ” Washington and Wall Street complicit in financial crisis”. I did find it in The Washington Post. Is this a copyright issue why it can’t be found in Canada.com archives?
Anyway, good article and pulls no punches. Highly recommended. Not fluffy shite at all, unlike the topic article. “What Stanley said”.
The MSM will print stuff like this, just not soon enough to give proper warning of what’s coming at you.
September 24th, 2008 at 9:02 am
September 24th, 2008 at 9:09 am
http://www.globeinvestor.com/s.....4/GIStory/
September 24th, 2008 at 9:20 am
It couldn’t happen to a more deserving bunch of scam artists.
September 24th, 2008 at 9:23 am
September 24th, 2008 at 9:31 am
September 24th, 2008 at 9:33 am
The primary drawback is price, secondary problem is a 7.5′ ceiling!
September 24th, 2008 at 9:36 am
It’s spooky how similiar the article reads to what was happening in the states a couple years ago.
September 24th, 2008 at 9:49 am
For the most part, yes, though it’s questionable whether many of the incentives are worth the implied price. If you don’t give a rat’s about granite and stainless steel, why would you pay more for it?
“It’s spooky how similiar the article reads to what was happening in the states a couple years ago.”
Spooky for whom? Anyone who thought Vancouver would be immune was drinking some nasty Kool Aid. I agree it’s going to be a horror show.
It’s still not too late to sell at a profit.
September 24th, 2008 at 10:11 am
Some newly finished developments still have unsold units.
Either they didn’t sell out or the developer held them back in hopes of making more money or worse, the buyer walked away from the contract.
In any case, they are now trying to blow these out at 10% less than their pre-sale prices. Legacy near Brentwood comes to mind.
Other developers like Concord are offering free GST, free furniture, and on some of their units, they’ll pay the maintenance fees for 20 years. That’s equivalent to $100K or more. Does that sound MINOR to you??
September 24th, 2008 at 10:13 am
September 24th, 2008 at 10:21 am
Before the current ‘boom’ - say pre-2002, there were quite a bit of price discounts offered by the developers on new projects, from real price drop in %, GST inclusive deals to other incentives. So these are standard practices in a ‘down’ market so as to move the inventory.
September 24th, 2008 at 10:44 am
So why haven’t we seen housing and credit markets in Canada crack? The market view is that it’s not going to, that the household overextension evident in the aggregate data is somehow more sustainable in Canada, to judge from the massive outperformance of Canadian bank shares through the global crisis (see Chart 1). We fear, however, that it may simply be a matter of time. The clear‘tipping point’ in the US was the emergence of falling house prices in the summer
of 2006, kicking off the vicious circles that have brought the financial system and the wider economy to the brink. We’re just now starting to see house prices fall in
Canada, and sharp rises in unsold home inventories increasingly imply that this will not be a transitory phenomenon.
September 24th, 2008 at 10:54 am
Well yes. Present value of $300/month in perpetuity at 6% is just 60K. Of course Joe Latte can’t figure that out.
September 24th, 2008 at 11:50 am
And will they also pay any special assessments to fix the shoddy construction?
September 24th, 2008 at 1:37 pm
Cops to arrest realtor who publish fake numbers and comments.
September 24th, 2008 at 1:46 pm
September 24th, 2008 at 2:29 pm
Alex, do you have evidence to back up your statement that they these units have ‘shoddy’ construction? If not, you have made a baseless accusation, which is unfair and potentially libellous.
While we may not all agree with the depth of this correction, I think we should all agree that spreading disinformation is unnecessary.
September 24th, 2008 at 2:35 pm
What disinformation? It’s a perfectly valid question. If there are building envelope deficiencies found, will the construction company pay for repairs for the next 20 years?
Somehow I think not. If there were 20 year deficiency insurance funded by the builder and kept in escrow, I might consider that a real “incentive” to buy.
September 24th, 2008 at 2:37 pm
Perpetuity goes on forever, a better description would be 20 year annuity, but it’s not even that! it is current strata fee x 12 x 20 off the price (I talked to them about this and then laughed in front of them about how they would do anything to try and pump up the selling price). I looked at these places back when they were pre-purchase stage, they wanted ~880K which was a premium back then but didn’t upgrade the kitchens as is standard for townhouses. they are currently listed at 40% over original pre-purchase (they never sold) with free GST (so 35% over pre-purchase) and the strata discount.
Concord also has a history of setting strata rates really really low initially so it looks like a bargain but the first strata council has to raise rates right away as they find it impossible to manage building at Concord’s rates.
I’ve owned in 2 Concord buildings and will NEVER buy from them again; the quality has been dropping steadily and they act like a bunch of bullies!
BTW, one of the building’s I owned in had to threaten to sue before they fixed deficiencies and even then it was a lump sum settlement as they didn’t want to acknowledge all the items they paid for - it is one of the reasons I got out, that building is super sketchy and will be a mega leaker in a couple years
September 24th, 2008 at 2:39 pm
With the history of leaky condo issues and special assessments for buyers in Vancouver I would think that the point Alexcanuck brings up is a valid one.
September 24th, 2008 at 2:46 pm
Nice try Dave but you can’t take this thread off topic.
September 24th, 2008 at 3:28 pm
I’m with betamax: this movie has played down south, and now it’s our turn.
September 24th, 2008 at 3:53 pm
Agreed now play by your own rule dave the troll
September 24th, 2008 at 4:24 pm
Concord does have a bloody minded attitude
to existing owners, after seeing the fit and finish at Spectrum ABCD, my first reaction was “instant ghetto”.
my opinion…so sue me already
September 24th, 2008 at 6:00 pm
One apartment: 2 baths, 2 br, 900 sq ft, 900K !
WTF !@*#(#)@)@??? LOL are they crazy? I would not even consider paying 450 for it. It is a fRiggin APARTMENT!
September 24th, 2008 at 6:20 pm
http://revnyou.wordpress.com
Not biased at all
September 24th, 2008 at 6:22 pm
So what if your rent only covers 1/4 of the expenses Dave?
September 24th, 2008 at 6:52 pm
September 24th, 2008 at 6:54 pm
September 24th, 2008 at 7:04 pm
September 24th, 2008 at 7:11 pm
September 24th, 2008 at 8:20 pm
September 24th, 2008 at 9:33 pm
BTW, the cool thing there is that the government knows that people are uneducated and developers are greedy, so they simply mandate to build high standard, basically ‘forcing’ the owner to save in the long run by significant reduction of energy and maintenance cost: http://www.ecogeek.org/content/view/1224/
What’s happening here is the opposite, raise profit margin by building cheaper (.e. using chip-wood in a place where we have prime wood available is plain wrong). Energy savings in the long run…aaaahw - to hell with that. You’ll flip the damn thing anyways, right!
Oh and you seem like a nice guy, Dave. Maybe get a job that doesn’t tend ruin people’s lives as much, it feels much better
September 24th, 2008 at 9:59 pm
http://www.kanadisches-holzhau.....is_180.htm