Friday free-for-all!
It’s time for our end of the week open topic discussion and news round up. Here are a few links I’ve notice lately:
-Vancouver Real estate sales grind to a standstill
-November: More houses sold in Edmonton than Vancouver
-Food bank gears up as layoffs begin
-BC house price predicted to keep rising (March ‘08)
-New Quotes have been archived in the Wiki Quote-tracker
-Canadian bankruptcies jump in October
-Concord Pacific chops down trees, then gets permit
-A question of priority: City residents or Vanoc?
-Taxpayers will pay extra security cost for torch route
-US style housing collapse could cost tax-payers plenty
-Vancouver prices dropping faster than US bubble cities
-Bay Area House $348k in 2006, today $79,900
-Victoria sales hit nine year low
-Saving money by shutting down the government
So what are you seeing out there? Post your news, links, thoughts, predictions and anecdotes here and have an excellent weekend!
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December 8th, 2008 at 11:04 am
Re Post # 189:
Good point,(re: rentals ) but that can be a function of the given strata bylaws. Some stratas limit the number of rentals aka “investment properties” .
Probably best to see what % of units in any strata you may wish to purchase are actually allowed to be rented. In some stratas it is very low.
However, in the RE meltdown, I wonder if both new and old stratas alike already are , or may become ,far more liberal and flexible on the % of rentals allowed within their own stratas, which may have the negative consequences you alluded to.
If you can’t own it AND live in it, the next option is renters.
I highly doubt many of these new condo units which remain empty in ” UNused pristine condition” and collapsing in value by the day, if not by the minute in the RE meltdown , will remain “virginal” for very long.
December 8th, 2008 at 9:51 am
“Polygon…usually 3 storey walk walk up condos…the odd apartment condos, but stay around 3-4 storeys.”
4 stories or less means wood frame construction, much cheaper and quicker to build than a tower. Obviously less units, but they can bang them up quicker with less code restrictions, less skilled labour, etc.
When I went to a Polygon open-house, the first question I was asked was if I was buying an “investment property”. Some of those Polygon low-rise complexes are just going to turn into rental slums in the years to come.
December 8th, 2008 at 7:36 am
Re Surrey’s Infinity towers
Province story:
http://www.theprovince.com/Con.....story.html
QUOTE:
“We’re certainly delighted to have Concord Pacific finish the project,” Surrey Mayor Dianne Watts said yesterday. “This announcement reinforces our confidence in the strength of Surrey’s local economy.”
The mayor called the Infinity development a “gateway project” for the entire city.
WARNING!!! WARNING!!!! WARNING !!!!use by any politiician of the word “gateway”.
There is something in this for Concord, they didn’t get successful doing charity work.
December 8th, 2008 at 7:19 am
Post # 162
Re: Polygon refocussing on smaller condo projects and avoiding concrete towers.
I was wondering about that givne the RE meltdown … some of these companies still have to keep busy. The problem with the last bubble was that firms feel literally forced to move from their normal bread and butter and compete in a newer high stakes market. This of course, exacerbates the over-supply of these units, and what is the quality of the product by this new competition?….. are they capable of delivering a quality product during their own learning curve ?
Hi – rise construction and supply in any given year used to be a relativey conservative endeavour in any jurisdiction, , but the pace over the past few years was mind – boggling.
I had noticed that when the market was on the upswing, companies like Polygon would tend to assemble approx. 5 acres of land and approx. build 40 – 50 low rise units, usually 3 storey walk walk up condos…the odd apartment condos, but stay around 3-4 storeys.
In a given area, Polygon tended to establish first, probably having a better sense of the market, getting the land cheap…build/sell and then moving on. Their projects tended to be the biggest in a given area . Other developers would then tend to come into the area and pick up and assemble smaller parcels and consequently produce smaller projects.
Future of Hi Rises?
My guess is that the market will turn back to the same conservative supply side. Too many people, both developer and buyers, got burned. I’d hazard a guess that pre-sales will be done far differently if not outright cancelled.
Cities like Richmond had developed a new OCP which has set aside a lot of land in the City Center for hi-rises, but land available for 2-3 storey condos was rapidly being used up. So we will have this conundrum of lots of land zoned hi- rise yet few hi rise projects VERSUS much less land availble for lower density condos, but higher demand given less risk exposure for the developers.
A Hi Rise is an ALL or NONE type of venture when you go vertical..but low rise condos “horizontal” allow for much greater flexibility, ie build in phases, “on demand” etc.
This “build UP not OUT” mantra by City Planners may be due for a radical upheaval in their future focusses.
I would suggest that much land currently zoned hi- rise by idealistic City Planners and greedy politicians will sit undeveloped for years, but many developers will be lobbying for current lands to be RE-zoned to low rise for the reason I have outlined above. Could turn City Planning inside out and upside down, and maybe for the better.
December 8th, 2008 at 6:51 am
#53, Cold Calling is a big part of every good salesmans repetoire. You would be surprised as to how many people can’t make a decision on thier own. As a kid selling real estate decades ago I personally ‘called’ at 200 doors a day and made an adittional 200 phone calls from my office before and after. Selling anything is a numbers game pure and simple. Introduce yourself to enough potential clients and buisness will come your way. I taught many people this strategy in my day and guarantee that it works. Don’t take it personally when someone asked you to buy or sell something, it’s thier business. I got rich in sales and retired at 42. Next time someone knocks on your door you should interpret the effort as coming from someone with initiative as opposed to the lazy failures who send you calendars and crap at holidays. You would be shocked to learn how many deals I worked out using another companies stationary and calendars. Initiative pays and as it pertains to real estate ‘asking for the order’ directly is far more effective than waiting around for the sheeple to pick up the phone and call you. As I said ‘it’s a numbers game’.
December 8th, 2008 at 12:28 am
“W” is going to be a symbol of the stupidity and avarice of this decade in Vancouver, just as another “W” will be a similar symbol south of the border.
December 8th, 2008 at 12:04 am
I am really waiting for the Woodward Development to be completed. I think lots of people paid way over for this development given its location and a lot of units don’t have any parking.
December 7th, 2008 at 11:49 pm
$3750 / 4br – Fully Furnished Beautiful Executive West Vancouver Home (West Vancouver)
December 7th, 2008 at 10:17 pm
“1217 square feet
No pets and no smoking
Rent: $3500″
Good grief you can rent an entire house in British Properties in North Van for that. A nice house.
But of course I’d much rather have a concrete apartment on No. 3 road. Wishing rent.
December 7th, 2008 at 10:14 pm
Aberdeen ( Richmond condos ? )
Having extended family that once lived a few doors down from Aberdeen …these condos will be under a constant noise corridor.
We used to sit immediately East of Aberdeen and literally read the serial number off the 747’s. The noise was unreal…had to pause betweeen conversations.
For some reason unknown ( though I have heard anecdotally too many times that BRIBES work in Richmond to NOT believe
them ) the City made a single exception to allow a condo development at Aberdeen in that area right under the flight path.
There is not another multi – family development for at least a half mile, only real “advantage”(?) is Aberdeen is adjacent to the RAV line. Err sorry I mean “Crime – train”.
December 7th, 2008 at 10:09 pm
It’s not a buyer’s market until the buyer is making a smarter decision than the seller, and we don’t get there until prices stop falling, Davey boy.
December 7th, 2008 at 10:01 pm
“Home sales are not keeping pace with the positive economic conditions in BC,” said REBGV president, Dave Watt. “That’s a direct result of a loss of consumer confidence in the overall market. Accordingly, today’s housing market is characterized by moderating home prices and wide selection. It’s definitely a buyer’s market.”
December 7th, 2008 at 8:38 pm
This is hysterical, why rent at shangri la when you can rent on no.3 in richmond…
Location: Aberdeen Residence (Cambie Rd & No 3, Richmond – right next to Aberdeen Centre)
this building is great if you love airplanes. when the wind is blowing the wrong way, you get to hear airplanes taking off right over your head all day long! though i understand they may have put in “extra-special” glass to reduce the thunder of the old cargo hauling clunkers that take off in the evening… my guess is that this building is popular with hong kong people who long for kai tak, the old hong kong airport, but that’s only my guess…
December 7th, 2008 at 8:30 pm
Lothian Vasquez, I do see your point, however, what happens if the massive injections don’t work.
So far it hasn’t worked, resources etc are falling hard.
December 7th, 2008 at 8:14 pm
Deflation is actually a very good thing, to be hoped and prayed for, or, more constructively, brought about as a matter of policy. Money regains value, frugality and productivity is rewarded, efficiency reigns and stability (everntually) returns.
But it ain’t on. Not beyond a little recession/correction-induced asset and price deflation due to end shortly before the recession does and MASSIVE amounts of new digital money makes its way through the pipeline, circa late 09, early 10.
Then, perhaps not hyper, but certainly mass, inflation is the name of the game…
December 7th, 2008 at 7:57 pm
Actually deflation forces productivity. You cut your employee’s wages, or you invest in automation, or you import more from third world countries, and reduce the amount of manufacturing you do locally.
Either way, you know the bus loads of people going to those low paying jobs in Richmond, are going to decline and so will the wages, but not the giant debt load on that leaky shoe box sized condos.
Yeah these poor modern day slaves are Rennie’s victims who listened intently to the Bill Good Show, and used to post bullish posts on Rob Chipman’s blog.
December 7th, 2008 at 7:06 pm
That’s not the reason. If the real yield on capital is greater than the real interest rate, that’s an incentive to invest money even if prices are falling.
The reason there is a lack of investment during deflation is lack of consumer demand for the output of capital.
Also, one more time, do not confuse asset price deflation, better known as a bear market, with consumer price deflation. They are two different things,
December 7th, 2008 at 5:57 pm
Re: Deflation.
I’m not an economist, but IIRC the problem with deflation is that no capital investments are made. There’s no point for a factory or business to invest, say in new equipment (indeed, spend ANY money), when siting and waiting makes money.
December 7th, 2008 at 5:40 pm
John, are you renting condos now?
This is hysterical, why rent at shangri la when you can rent on no.3 in richmond…
Location: Aberdeen Residence (Cambie Rd & No 3, Richmond – right next to Aberdeen Centre)
1 year concrete hi-rise
2 bedroom + den (can be third bedroom)
Bright South facing unit
Stainless steel appliances, 9 ft ceilings, central air-conditioning
1 locker
1217 square feet
No pets and no smoking
Rent: $3500
AVAILABLE NOW!
Call John at 604-671-1818
December 7th, 2008 at 4:39 pm
I get a kick out of the media calling deflation “dangerous” and a “virus”.
What’s wrong with an economy that rewards the prudence of a saver and
gives your paycheque more spending power? I suspect that the highly leveraged
are the only ones that miss inflation.
Have a safe, prudent, responsible, cash-only Christmas!
December 7th, 2008 at 4:19 pm
Pope, I enjoy reading the comments on this blog as well as your posts. I’m concerned that as the market gets worse, your comments are going to be seeded with more and more astroturf. We’ve seen dosh/browntown/etc. do it for the past 2 years and now I suspect we’re going to see it a lot more. This friday free for all is full of “WELL I HEARD FROM A LITTLE BIRD THAT CONDOS IN ALPHAVILLE DROPPED 80% IN PRICE…”. Your comment rating system is a good start but I’d like to see baldfaced lies removed. Malicious rumour mongering doesn’t benefit anyone regardless of whether they are bearish or bullish as it falsifies information about the market.
December 7th, 2008 at 4:03 pm
CKNW occasionally has a quick blurb on how it wants to hear from “you the listener” to hold the accountable.
I sent them a scathing opinion on their “spend your money like drunken sailors” propoganda crap they are spewing out. They are sounding more and more like an audio version of the Enquirer.
Here is their comments email link. I encourage anyone here offended by their Rennie adds to let them know.
comments@cknw.com
December 7th, 2008 at 3:17 pm
Anybody else hearing informally or otherwise, that real prices for middle of the range West Van properties are now down nearly 25%?
I have heard this now soooo many times I now believe it is beyond anecdotal, and means that even if the “average” drop in the Greater Vancouver area is 14 – 17% so far, the West Van factor is dragging the overall numbers down considerably. I am also hearing that West Van residents have so far been the most willing to delist altogether… for now!
Anybody care to confirm or deny?
December 7th, 2008 at 3:14 pm
If the B o C reduces interest rates any more than they already have, Canada will follow the US into mass inflation beginning in early 2010. When high inflation hits, private lenders begin jacking interest rates to protect themselves from a depreciating currency. This will kill whatever is left of Vancouver housing for a decade or more to come.
December 7th, 2008 at 12:38 pm
“With REBGV members and prospective sponsors/exhi-bitors currently facing economic challenges, we believe forgoing the 2009 edition of our event is a prudent and responsible measure at this time,”
Good find betamax. I guess they don’t believe in a spring sales bounce then.
December 7th, 2008 at 12:08 pm
Ahh hope…hope is defined as the belief in a positive outcome related to events and circumstances in one’s life. This is a good sign.
Rennie et al are the desperados right now, hoping. Clinging to the last bastion of hope: lies. I welcome it, in fact I encourage it. It’s frustrating on one hand, but the more sheeple who buy into it, the easier this becomes for those of us who won’t.
The BoC has used most of their arrows already. This talk of lower interest rates won’t restimulate the housing bubble. Only people that don’t understand how we got here believe their is hope for the housing market yet.
My advice is to follow Rennie’s BS. Change the topic or even better – pump the market. My favorite line, for people who believe this is a “mini-slump” and that we’re headed for new price records soon enough, is to put their money where their mouth is; go buy some property(ies). If they are so sure, than surely there is no risk associated with such an investment, right?
“Hope is the denial of reality.”
– Margaret Weis
December 7th, 2008 at 11:57 am
Also according to the Sun:
The RE Board of Greater Vancouver has canceled its ‘09 conference and trade show.
LOL.
Board president Dave Watt refused comment.
LMAO.
December 7th, 2008 at 11:52 am
According to the Van Sun:
“Residential building permits plunge 26 percent” in October.
I’m sure November was worse, and that’s aside from all the permits already taken out that they’ll never break ground on.
According to the article, for many developers there’s nothing in the pipeline after current projects are completed in ‘09.
There’ll be a lot of construction types out of work, bidding for reno jobs at low wages and still not getting it. The party’s over.
December 7th, 2008 at 10:59 am
Second-hand information (for what it’s worth)…
I was told that Polygon has decided against building any more concrete towers. They’re completing and selling what they have on the books now, but will move away from the pre-sale strategy. They will focus on smaller, wood buildings. Back to the plan of build 20 units, sell 20 units.
December 7th, 2008 at 10:34 am
Re Recieverships sales
Bowra Group
http://vancouvercondo.info/for.....c.php?t=43
Read how some recievers do business.
Surrey mayor Diane Watt and vision for a downtown Surrey may turn into a friggin nightmare given what has happened. An oversupply of condos in bad areas is not traditionally a selling point. (Bad “fundamentals ” ……unless of course Bob Rennie blesses it, then everything changes , right ? Bulletproof granite countertops impervious to free-basing ? )
Their urban renewal vision of the area may have got stopped mid stream where the areas problems still exist…so will this clean up the area? or simply compound the existing problem .
I’ll pass.
December 7th, 2008 at 10:23 am
Hello Bears/Bull
anectdotal info
Yesterday we visited Aberdeen center, the cradle of rich asians. It just happens that Polygon have opened a new sales center in the mall, next to the dancing fountain, across the Ferrari dealership.
I was drawn to it like a bear to honey. Started reading the ads and saw they have like 8 (!) projects all over the place where they are trying to get rid of properties.
I was approached by one of the few gorgeous sales ladies. Her first question, oddly enough , was “Have you heard of Polygon before”, and I said I definitely did. We didn’t buy a house yesterday.
The sales area was empty, they girls were just gossiping to each other, but I was impressed by the ‘booth/store’. It was big and expensive.
Regards
arit
December 7th, 2008 at 10:17 am
Clam, I think we have the same opinion about polygon.
The infinity project that is complete (13618 100th) is not built well at all. Expect to hear about the quality issues at some point soon! and i’m not talking about drywall issues.
It’s great that Concord is getting on board for what will ultimately be B.C. biggest slum (what do you get when you mix pure speculators with first time buyers in the cheapest development since the bubble started and put them on a strata together? Read lord of the flies).
Youngin family (who took over for jung),Concord and the Bowra group are all in the same building so concord can always hand it off to the bowra group if they don’t want it!
December 7th, 2008 at 7:32 am
Re: Fortress group
” Fortress, the Hedge Fund, is crumbling “.
http://www.nytimes.com/2008/12.....aAJIuZ/RDA
QUOTE:
When Wesley R. Edens and his partners founded their investment firm a decade ago, they chose a name that evoked unshakeable bastions: Fortress.
But now their stronghold is under siege — and some of its investors are running for cover.
Cracks are spreading throughout the Fortress Investment Group, once a leading player in the worlds of hedge funds and leveraged buyouts. On Wednesday, Fortress’s shares fell 25 percent to $1.87, a new low, after the company temporarily suspended withdrawals from its largest hedge fund. Investors had asked to withdraw $3.51 billion from the money-losing fund, Drawbridge Global Macro.
But Wednesday’s slide was just the latest turn in a long, downward spiral for Fortress. The once-celebrated company has lost 89 percent of its market value over the last year as hedge funds and private equity, once lucrative businesses that helped define an era of unrivaled Wall Street wealth, have crumbled in the credit crisis. ”
PS Vancouver taxpayers…LOOK OUT !
December 7th, 2008 at 7:11 am
Re: projects started.
From what many have observed or what has been reported, there appear to be two scenarios.
(i)If the project has had preliminary work done up to , but not including, the start of foundation, ( such as the excavation as the Ritz -Carelton , Jameson etc.) they have stopped the project.
(ii) If a project has started the foundation…its seems to be a ” go ” right through to completion. I have noted a few projects that have started a few weeks ago even when the global economic crisis was already in full swing. However, one really wonders why they are even continuing, given the writing on the wall points to adding more product to an already glutted condo market with literally no buyers . There must be a greater benefit than liability, but that may be simply to avoid breach of contract (wit buyers, contractors, suppliers, )compounded by “hope springs eternal” that the market will turnaround.
The bigger companies ie like Polygon may simply be trying to maintain a stiff upper lip and keep their reputations intact, keep their crews intact, even if they take a hit financially.
I recall the early 1980’s during the MURB days…foundations got poured and then sat for years till they were completed. Seems to be a bit different now.
December 7th, 2008 at 6:13 am
Plus, if they canceled any projects they’d have to give the deposits back and be stuck with sunk costs. Finish the projects and they get to sue the pre-sale buyers if they don’t complete. Pretty easy choice really.
I would not be surprised to see smaller players abandon projects due to financing problems though, a la 1982.
December 7th, 2008 at 5:09 am
“Polygon is still continuing with all existing projects”
Of course they are. Why would they want to hold a piece of vacant land? They won’t be able to sell it for a profit for a generation or more. In the meantime, the interest payments keep on coming so all they can do is build and sell as fast as possible.
December 7th, 2008 at 1:22 am
Sorry still wrong, Polygon is still continuing with all existing projects and all those that have been forecasted to start, they are just not working on any projects forecast past those, ie not acquiring new land until they get a better sense of the market.
Most developers are doing the same at this point.
Also in case anyone missed it Concord has signed on to complete Infinity, no word on Sky Towers at this point.
December 7th, 2008 at 12:14 am
From the Macleans article:
Christopher Judge is accustomed to turning heads in Vancouver. During the decade-long run of the cult hit TV show Stargate SG-1, which was filmed in and around the city, Judge starred as the muscle-bound alien Teal’c. But when the six-foot-three actor appeared in B.C. Supreme Court in mid-November, amid raised eyebrows from the galley, it was for a role he’d desperately hoped to avoid. Judge, who owns three luxury homes in B.C., faces foreclosure.
Well, so much for the theory the Beautiful People would keep prices at the high end from going down.
December 6th, 2008 at 10:15 pm
Vancouver Real Estate Never Go Down Says,
You are dumb. The market is free falling. HELLOOOOOOO.
December 6th, 2008 at 10:13 pm
GM is garbage. Why would anyone buy one? They must the be same stupid people buying real estate right now.