Vancouver Condo Info

Its time for our regular end of the week news round-up and open topic discussion.  Here are a few stories I’ve noticed lately to kick off the discussion:

-Greater Vancouver average house price drops 8% from 2007
-Canadian house prices down, blame British Columbia
-Infinity Surrey condo tower: Anyone got $100 million?
-Victoria: development halts at $1.4 billion cappela condos
-Kelowna: 21 story condo development grinds to a halt
-angry condo owners seek stronger protection
-Realtors to host grow-op meeting
-The end is here for 40 year mortgages
-banks push locked-in mortgages
-CMHC buys $5 billion worth of mortgages from banks
-Conference Board of Canada: No recession in Canada
-Bank of Montreal: Canada can not avoid recession & deficit
-Vanoc: $48 million deficit for 2008
-Japanese shares market drops 11.4%
-Construction cranes nearly extinct in Miami
-Paulson: regulation bad! er.. regulation good!

Phew! So how’s everyone doing out there?  Is it time to panic? Time to buy?  Time to hide under the covers with your fingers in your ears?  What are you seeing out there?  Post your news, links and anecdotes here and have a great relaxing non-panic filled weekend!

UPDATE: The CBC Early Edition is putting together a story for Monday morning and would like to talk to anyone who invested in a development and is trying to get their deposit back, or those who have succeeded in getting their deposit back.  Contact jennifer.chen@cbc.ca or elizabeth.hoath@cbc.ca if you have a story to share.  Tell ‘em VancouverCondo.info sent you!

note: any conversation on Vancouver, real estate or economics is allowed, please keep it civilized. When posting articles please only quote pertinent points and link to the original instead of pasting the entire article here. Pasting a link will automatically create a clickable hot-link. Thanks!

Several people just posted this news – another lower mainland condo tower has run into money troubles.  The ‘Infinity at Central City’ is the largest residential complex in the history of Surrey.

With just one of the 35-storey towers completed and occupied, Infinity’s South Korean developers have been granted protection from their creditors. The Infinity is supposed to have five high-rise towers and 1400 units. Robert Millar, lawyer for Jung Developments and Hee Yong Yang says “Yang has been adversely impacted by these changes and world wide tightening in the credit and financial markets.” He says the project has had no cost overruns.

Two other towers are under construction and 560 pre-sale buyers have made deposits. But Millar says “Their deposits are safe and we are confident we will arrive at a new financial partnership.” He says less than $100 million is needed, but that’s almost a third of the total estimate of $350 million.

update: If you are an Infinity buyer and would like to talk to a reporter about this situation, Jeanette requests that you call the CTV news hotline at 604-609-5800.

Bit of interesting news out of Victoria this morning, the BC Supreme Court has ruled that the cities homeless can legally camp in Victoria parks.

“Yesterday it was illegal to set up my tent. Today it isn’t,” said David Johnston, one of the homeless activists who argued they have a right to sleep outdoors on public property.

Lawyer Catherine Boies Parker, who acted on behalf of the homeless campers in their court challenge of the city’s anti-camping bylaw, confirmed the 108-page judgment upheld their argument that a City of Victoria bylaw that prohibits using “temporary abodes” like tents and large tarpaulins for shelter in parks and public spaces violates the rights of the homeless.

She said the judgment noted that in the absence of sufficient safe and secure beds for the homeless, it was unconstitutional for the city to prevent them from erecting some form of shelter to protect themselves from the elements.

The decision came three years after a group was arrested in October 2005 for setting up a “tent city” in a Victoria park. The eviction sparked the court challenge.

Anyone remember the tent cities in Vancouver parks from just a few years ago? It will be interesting to see how this decision works out for us in the coming months.  The Mayor of Victoria, Alan Lowe predicts the impact of the decision will be felt throughout Canada.  I predict that the impact will be felt to a greater degree in places with a warmer winter climate, ie Victoria and Vancouver.

The judgment does not bode well for city parks, Lowe warned. “Our city parks are not equipped to support camping of any kind.  “We’ve seen first hand the ill effects of tent cities. In 2005 . . . we saw a tent city that had become a hub of illegal activity, health concerns and vandalism,” he said.

“These are not acceptable conditions for our parks and green spaces, but even more importantly these conditions are not acceptable for the homeless.”  Lowe said there were no winners with the judgment. “This is still no way to accommodate our homeless and will be detrimental to the families and children that enjoy our park system.”

At the conference, Acting Police Chief Bill Naughton said police will respond “situationally” to any homeless encampments.  “We’ll see what confronts us and act accordingly,” he said.

Here’s an open question for discussion and a bit of a scientific experiment.  I noticed a recent story on the UBC election stock market and that reminded me of a few other stories I’ve seen on prediction markets and their accuracy.  It turns out that in many cases the aggregate of a groups prediction or estimation is more accurate than individual experts, particularly when money is at stake.

Last month we saw year-over-year price loss in many areas of the lower mainland.  These drops were seen across all types of housing: condos, townhouses and detached homes, but the most dramatic price drop was seen in Port Moody which saw an astounding year over year price decline of 20.4% for the benchmark price of a detached house.  That number is so large, I initially thought this may be a typo or error, but it has remained in place throughout numerous news stories and the original REBGV housing price index table.

So lets do a little experiment.  Lets see if the readers of this site, as a group, can accurately predict which area of the REBGV will see the largest percentage decline in the benchmark price of a detached home.  To clarify: Which area of the lower mainland will show the largest monthly house price decline during the month of October 2008?  Vote below and when October REBGV benchmark stats are release we’ll see how accurate we’ve been:

[poll id="30"]

It’s Friday and we’re going into a long weekend!  Lets do our end of the week news round-up and open topic discussion thing. Here are a few stories I’ve noticed recently:

-Falling Van house prices bad for both sides
-Paying a price for houses that aren’t homes
-Translink: $11 million surplus actually $3 million deficit
-Flocks of speculators & presales vanish
-Vancouver: We’re still building lots of condos
-RBC: BC economic picture darkens
-Banks only pass on half of rate cut to customers
-Flaherty: No bailouts for Canadian banks
-Carlton’s Nick Rowe on Canadian housing market
-Washington Mutual Exec predicted collapse

So what are you seeing out there? Post your news, links, thoughts and anecdotes here and have an excellent long weekend!

note: any conversation on Vancouver, real estate or economics is allowed, please keep it civilized. When posting articles please only quote pertinent points and link to the original instead of pasting the entire article here. Pasting a link will automatically create a clickable hot-link. Thanks!

Just so you know, Canada’s banks are in fine shape. Not the sort of ‘fine shape’ that US banks were in last year, but real, honest to goodness fine shape.  But just in case, Ottawa is considering options to aid Canadian banks if the current global economic crisis persists.

And news from around the globe hasn’t been real great lately.  A number of large US banks have failed, a record setting US bailout bill has been passed and the US government is now considering taking an ownership stake in banks (because what restores confidence more than government ownership?).

Meanwhile in the UK, they’ve already taken the step of partially nationalizing their banking system.  The fallout from the global credit boom is turning bust in a bad way, look at whats happening in Iceland for just one example.  The IMF has just announced the activation of an emergency funding scheme that was last used during the 1995 Asian economic crisis.

From previous discussion on this site I know that many of you are sitting on a cushion of cash, some above the $100k CDIC insured limit.  Are you worried about the health of the Canadian economy and our banking system? Do you understand the ins and outs of CDIC insurance?  Are you making any changes to your banking habits to prepare for possible problems?

The CIBC economic forecasting dartboard hasn’t been remarkably accurate lately, so I’m not sure how to take this most recent prediction from Benjamin Tal who believes ‘a gradual slide’ over the next 8 to 10 months will see house prices across Canada drop another 5 or 10 percent.

Sales activity will also drop by an average of about 20 per cent from current levels before stabilizing near the end of 2009, Mr. Tal, senior economist at CIBC World Markets Inc., said in an interview after his speech Tuesday before an income fund industry conference.

By this time next year the market will level off as conditions in the Canadian economy stabilize, he said. However Canadians shouldn’t be waiting for a “V-shaped recovery,” at that point, but instead should expect both home prices and sales to remain relatively flat, he added.

“What we are saying is that prices will continue to ease in the coming months, but there will be no U.S.-style freefall,” Mr. Tal said.

Canada should be in buyers’ market territory by late 2008 or early 2009 for the first time since 2001, he added.

Of course that’s the prediction for all of Canada – in western cities like Vancouver, Mr. Tal says that prices are likely to fall double digits by the end of 2009… So I guess thats anywhere between 10% and 99%?  Thanks CIBC!

Gah just posted this link, looks like Millennium Water might need a bail out:

As the credit crisis south of the border begins to creep north, concerns are mounting over the impact it may already be having on construction of the athletes’ village for the 2010 Winter Games.

Last week, members of Vancouver’s city council held an emergency, in-camera meeting to get an update on the project. Much of the discussion revolved around the city’s obligation in the event the developer, Millennium Development Corp., can’t meet demands from the bank because of massive cost overruns, according to sources briefed on the meeting.

The best part? Even if you haven’t been speculating on Vancouver condos, now you get a chance to take part in the collapse since it looks like the City is on the hook for cost over-runs on this particular project.  But don’t fret, the absolutely ‘worst case scenario’ at this point looks like a $100 million dollar bill for Vancouver tax payers.

On a Monday morning where the TSX started off the day with a fresh 1200 point plummet we’ve got more negativity about the local real estate market on the front page of the Vancouver Sun: I bought a house at exactly the wrong time.

And the chances of Vancouver prices actually dropping? Maybe two out of 10, I surmised. (Most of my friends, who at dinner parties often talked about how their soaring real estate was ensuring their retirement, thought I was slightly crazy to even think such a thing.)

As you might have guessed, my resolve had finally weakened. So, in the spring of 2007, I bought a piece of paradise. The odds seemed on my side, I decided. At first the prices seemed to keep soaring.

Soon I was telling people at dinner parties how much my house had gone up, too.

Now I’m back to where I started.

The real-estate-disaster bloggers actually were prescient. Wall Street is melting down because of the junk mortgages. Bay Street is in a tailspin. Now my almost daily question is what’s going to happen here?

Yep, the bloom has come off the rose when stories like this are on the front page.  Although we still have a huge problem with affordability, Vancouver house prices have dropped below where they were one year ago. sales have dropped right off and listings continue to grow as the global economic forecast gets dimmer and dimmer.  For many there’s still time to make out with a profit, but the competition is growing fiercer as we race for the bottom.

“I wouldn’t feel bad about buying,” said Jock, listening to me fret. “Nobody saw this coming. We’re in a hurricane, but in a hurricane you don’t know how bad it is until it’s over. And it’s not over.”

Nobody saw this coming and nobody could have predicted that the experts would say ‘nobody saw this coming’ right?  I bet you also couldn’t guess what Bob Rennie has to say about the whole Vancouver housing market crash:

Rennie also believes the fundamental reality is there’s no oversupply of housing and condos in the city of Vancouver, as there is in many U.S. cities now seeing the market tank. He also sees a strong demand for Vancouver’s high-end real estate by rich people from afar.

“I wouldn’t sell right now,” Rennie said. “In fact, I just bought a few more units myself.”

I’ll be back in a short while, I’m just going to go ask a car dealer if its a good time to buy an SUV.

For a week or two now you’ve been able to give a thumbs up to comments posted on this site, but the means to express your disapproval with a comment has been missing..  Well, its missing no more.  Thanks to c0der, you now have the option of rating each and every comment on this blog either positive or negative.

The appearance of each comment is determined by it’s score.  Currently each comment rated above a score of ten gets one of these icons in the upper right hand corner:

comments rated above twenty get a background color highlight and an icon like this:

comments rated below negative ten get converted to a slightly faded smaller font, while comments rated below negative twenty get converted to mouse type: tiny little mouse type, like this.

So now even if you’re shy and don’t feel like leaving comments you can join in the meta-conversation by rating up comments you agree with and rating down comments you disagree with.

Please use this power for good instead of evil. I know you’ll end up using this however you want, but I think its reasonable to keep all honest comments that are on topic above -20, even if you don’t agree with their premise.  I think mouse type is best reserved for spam, obvious trolls and nonsense posts.  Better to debate points, rather that simply trying to silence alternative viewpoints.

I’d also like to take this opportunity to solicit your general feedback on this site.  Do you like this new comment rating system and feel like the thresholds are set appropriately?  What are your favorite/least favorite things about this blog and what general improvements would you request?  I can’t promise that I can address all concerns, but I’d love to hear your opinions.

Last but not least a huge thanks to c0der, who fixed up the comment rating system within a few hours.  Great work and greatly appreciated!