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Incentives to lure condo buyers

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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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Gorky

oh and it's not that we Canadians are unable to build good houses, funny enough we export houses to Germany that fully fulfill the high standards there (sorry in German, but you get it):
http://www.kanadisches-holzhaus.de/Holzhaus_bis_1…

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Gorky

OK, enough Dave. If you don't acknowledge the ‘shoddy’ construction going on in Vancouver then you can't be an honest expert or you must be one of these people that never traveled beyond beautiful Hope, BC. Have you ever been to Europe, let's say Germany and looked at construction in progress? Have you ever seen how houses are built there? If so, noticed a difference? 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… Read more »

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Dosh

Anonymous, at least put a name to your post so we can berate you if you're wrong on your prediction of maintenance fee increases.

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Anonymous

By January maintenance fees will sky rocket in Spectrum, and basically 1 year after all Towers open expect massive increases in maintenance fees or alternatively neglect and no increase just build deterioration…you bought a new car so try to sell it for what YOU paid…same things condo's! If I'm wrong you'll have your chance to berate me! 🙂

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Anonymous

Dave "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". Dave I have evidence of shoddy construction but hey they are paying me to keep it together till the 1 year warranty on common property expires. So YES I'll tell you but when my contract expires! 🙂 If YOU want to Pay me offer something say $60,000.00 a month and I'll tell YOU now! Quick quiz how much time did you spend looking at mechanical rooms building envelope, elevators, calls to Warranty do you have it itemized? Did you spend FAR more time on the common areas and building operations then you spent in the suite? 100 times would be about right! 🙂 Sucker!

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alexcanuck

Bullisht. Gotta stay consistent.

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alexcanuck

I don't get why some insist there is only one Dave and only one illiterate warehouse worker. I have no trouble believing Bullist Dave and revnyou dave are different people, and the thought that only one SATV exists……,well, my fantasies are more realistic that that! Even the one involving the elf-maiden and the hottub.

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Anonymous

"even if you buy at the top or near top of the market, if your rent covers most of your expenses and you can keep your rental occupied with decent tenants, over time, you will get your money back and if all goes well, a lot more than you put in. And while it wasn’t our best investment, it taught me how to better assess the peaks and valleys of the market."

So what if your rent only covers 1/4 of the expenses Dave?

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Anonymous

Here's Dave

http://revnyou.wordpress.com

Not biased at all

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oH well

I looked up what this "Spectrum" was, and found some high rises.

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!

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oziijjiizo

minimum warranty from builders is 2-5-10 years and this is mandated by law in BC

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

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Anonymous

"I think we should all agree that spreading disinformation is unnecessary."

Agreed now play by your own rule dave the troll

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Rocker Guy

You know what really moves units these days? Having lots of cafes nearby for people like Dave. Because obviously you can't access poncy Yaletown-style cafes unless you own a condo.

I'm with betamax: this movie has played down south, and now it's our turn.

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Anonymous

dave the mortgage broker is now a legal expert too?

Nice try Dave but you can't take this thread off topic.

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Mold City

Dave, you are a mighty hunter of straw-men aren't you? Maybe I'm giving Alexcanuck too much benefit of doubt, but I didn't see him mention any specific construction, and yet you're accusing him of libel. Granted he was responding to someone that mentioned Concord, but its not like their buildings have been trouble free.

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.

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YLTNBoomerang

Well yes. Present value of $300/month in perpetuity at 6% is just 60K. Of course Joe Latte can’t figure that out. 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… Read more »

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jesse

"I think we should all agree that spreading disinformation is unnecessary."

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.

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Dave

And will they also pay any special assessments to fix the shoddy construction?

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.

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bdk

Obviously that's Krissh above, he's just a crazy fool trying to disrupt the topic at hand which is that the markets going to be correcting for decades to come, contrary to his gibberish, factless opinion that it would never happen.

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Bdk

"It looks like my home town of North Vancouver is one of the better markets to be selling a home right now. For such a large market, West Vancouver is struggling. What will September bring?"

Cops to arrest realtor who publish fake numbers and comments.

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Alexcanuck

and on some of their units, they’ll pay the maintenance fees for 20 years.

And will they also pay any special assessments to fix the shoddy construction?

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patriotz

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??

Well yes. Present value of $300/month in perpetuity at 6% is just 60K. Of course Joe Latte can't figure that out.

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MickeyFinn

The following paragraph is from Merrill Lynch Canada's report issued today titled, "The Tipping Point?" 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… Read more »

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realbiz

This is nothing new.

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.

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Time

Incentives is alternative solution to keep the investor realtionship strong and to download off look unit this way disscount is coming from developers pocket without hurting previous buyer.

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